Captive finance arms, lenders announce assistance programs amid COVID-19 virus outbreak
The captive finance arms of Ford, Nissan, and Toyota have announced assistance programmes in the United States and Canada to provide relief for customers financially impacted by the coronavirus disease 2019 (COVID-19) virus outbreak. The schemes have been introduced by Ford Credit, Nissan Motor Acceptance Corporation, and Toyota Financial Services and, depending on the programme, customers may delay payments on new-vehicle purchases or leases or change payment due dates. Ford, Nissan, and non-captive automotive lender Ally Financial are offering customers who buy new vehicles the option to delay their first payment for 90 days. Wells Fargo Auto is also reported to be offering an assistance programme. Toyota has been particularly active in introducing such programmes, offering one earlier this month for customers impacted by tornadoes in early March in Tennessee and another one following a US government shutdown in January 2019. According to an Automotive News report, Nissan is also offering financial relief to dealers, lowering the costs of carrying inventories as sales are expected to slow amid the COVID-19 virus outbreak. Ally Financial lends to dealers as well as consumers and reportedly said that it is "actively communicating with our dealer partners to support their individual needs". General Motors is offering zero interest on 84-month loans, as well as 120-day deferment of payments on new cars for customers in the top credit tiers. The company will also offer complimentary OnStar crisis assistance services and 3 GB of data. The company's existing Shop-Click-Drive digital tool also has an optional home-delivery programme for participating dealerships.
Significance: The motivation behind these assistance programmes is to reduce financial anxiety for customers considering a new-car purchase, as well as to ease the concerns of existing customers. As US consumers are increasingly uneasy about growing closures of schools, cancellations of events of more than 50 people in some locations, work-from-home solutions instituted by employers, and job losses (temporary or permanent) as businesses are asked to close for certain periods, these efforts may encourage potential buyers who may be hesitating to go ahead with a purchase. During the 2008-09 recession, a similar scheme was used effectively by Hyundai. Hyundai and Genesis announced a programme on 13 March 2020, focused on easing the minds of new-vehicle buyers. These moves may serve to increase opportunities for stronger brand loyalty, and to some degree are likely to result in relatively low risk of payment default in the near term. The programmes do not absolve the customer of the debt but serve to ease anxiety over making payments, over potential penalties for late payments or over increased charges that would typically come with a missed payment. The hope is also that providing this relief may prevent a customer's account from sliding into default.
Read more articles like this one. Get a free trial to AutoIntelligence Daily
- Drivers reveal exactly how fast they want EVs to charge – and these cars are setting the pace
- Fuel for Thought - CES 2021 Roundup
- Top 10 auto tech trends to watch for in 2021
- Stellantis: Scale Creates Opportunity
- Evolving Material Trends in Body-in-White Webinar
- Join IHS Markit as we host our inaugural US Brand Performance Review webinar
- Supply chain disruption for semiconductors to the automotive sector
- An Automotive Minute: Electric Vehicles in the Biden Adminstration
Webinar | Evolving Material Trends in the Body-in-White Forecast Join us February 4 as we highlight key outputs of… https://t.co/DWdV2Q1gPs
Automotive industry: expected future development amid Sars-CoV-2 and long-term trends. Cu2 Consulting discusses ten… https://t.co/mcpxGbEJTF