Yahoo Finance Coronavirus: Fiat and Alfa Romeo to waive car finance payments if customers lose job
Fiat (FCA.MI) and Alfa Romeo are the first car markers to waive up to seven months finance payments if customers lose their job in the next year, due to the pandemic.
The Italian company has pledged to cover the outgoings for motorists buying their new models, at no extra cost.
It is estimated that UK drivers are borrowing £48bn ($59bn) in car finance with many struggling to stay on top of payments due to income loss during the coronavirus outbreak.
The job loss protection scheme will cover all new car finances from 1 June to 30 September 2020.
It can be activated during the first 12 months of the finance or leasing agreement and up to seven payments will be waived, according to a report by This is Money.
The protection will be valid for customers holding deals with FCA Automotive Services and Leasys UK which include Fiat, Abarth, Jeep and Alfa Romeo.
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The initiative comes as a third of motorists say they are interested in buying a new car but are concerned about their job security, according to an Alfa Romeo survey.
The payment protection plan will cover involuntary job loss as well as customers who are unable to work due to sickness.
Arnaud Leclerc, managing director of FCA in the UK and Ireland, told This is Money: "We know these are uncertain times, so what better way to support our customers than give them the reassurance that should their financial circumstances change in the months ahead, we will be there to cover their monthly car repayments."
Car dealerships will begin reopening on 1 June after the government announced an easing of COVID-19 lockdown restrictions.
Last month the Financial Conduct Authority (FCA) granted any driver with a car finance arrangement to access a three-month payment freeze under emergency coronavirus plans.
Borrowers with Personal Contract Purchase or Personal Contract Hire car finance plans can request the payment freeze at any point.
The FCA has also warned that lenders should not end agreements or repossess vehicles during the payment freeze period and customers are permitted to continue driving their cars.
