With tens of millions of Americans sidelined, either in whole or in part, by quarantine orders due to the corona virus outbreak in the spring of 2020, a looming question for many is whether they can or should be making regular payments on the family car or truck.
So far, at least, the media hasn’t been reporting too much about car payments, focusing instead of plans to help people with their mortgages and student loans. This is in part because those loans often have a federal component, meaning Congress can legislate modifications to them. But most auto lending is a strictly private affair, making it less amenable to federal intervention.
Auto loans obviously also come with a twist: the lender retains a lien on the vehicle, and the right to whisk it away if payment becomes delinquent. Eviction bans and holds on paycheck garnishments aren’t going to help here.
But some lenders have announced a willingness to extend at least some concessions to borrowers strapped by Covid-19 and its fallout.
The Edmonds car value rating service has done a great job of collecting up-to-date information from large lenders on car payment issues. You can access their list by clicking here.
Note that many of the lenders, at least at this time, are asking borrowers to be pro-active, and to take the initiative and call them to arrange alternate plans — which may or may not be extended due to whatever factors they want to consider.
Drivers with car leases that are nearing expiration have additional concerns. Possibilities here include short – term lease extensions, or even picking up the vehicle at the customer’s home if they decide to turn it in. Again, Edmonds has a good summary of what the options are.
Drivers should keep several things in mind when negotiating with auto lenders: First, major car companies always want to sell you another car, so they may have incentive to be flexible. Second, their sales have all tanked, so they are going to be reluctant to pinch their income stream for too long. Moreover, the federal stimulus bill passed in March 2020 contained little in the way of protecting consumer’s credit ratings, so drivers are going to want to be careful to document any concessions they are offered over the phone, and keep an eye on dents to their credit rating due to missed payments.