During the coronavirus pandemic, many borrowers are evaluating their options. We cover what auto lenders and insurance companies are doing to help ease some stress during this time.
Car Loan Deferment and COVID-19
Auto loan deferment isn’t usually offered unless you really need assistance making your monthly car payments. Typically, you need to prove that you’ve had a life change or event that constitutes your need for an auto loan deferment or payment assistance.
However, due to the coronavirus, and with so many workers temporarily out of work due to widespread shelter-in-place orders, many car lenders are voluntarily reaching out to their borrowers. They’re offering deferment programs and other ways to help their customers in these difficult times. If your lender hasn’t contacted you yet, reach out to them as quickly as possible.
Everyone loses when it comes to a default and subsequent repossession, and your lender doesn’t want you to default on your auto loan.
In dire situations, you may be able to defer your car loan payments. A deferment’s conditions depend on the lender. Sometimes, the payments that you defer can be pushed to the end of loan, but other times they're only pushed back a few months. Either way, when you defer a loan, you eventually must make those payments.
Our sister site CarsDirect compiled a list of automakers that have stated they’re willing to help out those affected by the COVID-19 outbreak:
- Ford and Lincoln
- GM (Chevy, Buick, GMC, Cadillac)
- Honda and Acura
- Hyundai and Genesis
- Toyota and Lexus
- Volkswagen and Audi
If your lender isn’t on this list and you’re worried about missing your next car payment, you should still reach out to them. The worst they can say is no, but due to the economic stress, most lenders are being flexible. Remember, your lender likely doesn’t want you to default, either.
Pausing Your Auto Insurance
When you’re financing a car (whether you’re driving it or not) you’re required to carry full coverage auto insurance. If you cancel or lapse coverage in your car insurance, you risk getting a force-placed policy added to your vehicle payment. Additionally, states have their own auto insurance rules, and almost every state requires some type of coverage.
But since you don’t own a car until it’s paid off, lenders require full coverage insurance that covers the vehicle in the event of an accident or theft since the lender is the first secured party until you’ve paid it off.
While you can’t pause or cancel your car insurance with a loan balance, insurance companies are offering rebates to their customers during the coronavirus outbreak that provides some relief. We’ve also compiled a list of some of the insurance companies that have stated they’re willing to help our those impacted by the pandemic:
- Farm Bureau of Tennessee
- Liberty Mutual
- State Farm
- Texas Farm Bureau
- 21st Century
To learn exactly what these companies are providing, contact your auto insurance agent to see what options are available. You may also be able to adjust your policy (while still maintaining full coverage) to temporarily make it more affordable.
Buying a Car During Coronavirus
If you’re worried about keeping up with your auto loan or car insurance payments, contact your lender and insurance agent. Many are voluntarily reaching out to their customers and offering a hand.
With so much uncertainty surrounding this pandemic, many automakers are offering deals to ramp up sales. If you’ve got decent credit and you’re looking to finance your next car, now could be a great time to take advantage of this or do some online research.
Additionally, here at Auto Credit Express, we’re still working hard to connect borrowers with all types of unique credit situations to dealers in their local area. We’ve also contacted dealerships nationwide, and created a list of dealers that are open during this coronavirus and how the stay-at-home orders have affected them. We want to match you to a dealership that’s open, and able to work with your credit score to help you get into your next auto loan.
To get started, simply fill out our free car loan request form, and we’ll get to work.