Monday, April 13, 2020
Compassion, Car Payments, and Coronavirus
Banks and leasing companies are threatened, not only because few people are borrowing money to buy homes or buying or leasing cars, but those that already rented, bought or leased have stopped making their monthly payments.
All lenders are more inclined to reduce and relax monthly payment requirements if the borrower contacts them first and asks. To a lender, being called by borrowers represents good faith, and is an indicator that this borrower is more likely to pay out the loan than the borrower that doesn’t call.
The sooner you call your lender, the better. Don’t call the car dealership that you bought or leased from because the dealership is not the lender. Even though you bought or leased your car there and signed the lease agreement or retail installment contract, the dealer “sold” the contract you signed to the real lender…a bank or leasing company. Oftentimes the lender is owned by the vehicle manufacturer…Ford Motor Credit, Toyota and Honda Financial Services, Chrysler Capital, etc.
If you’re leasing a car and the end of your lease is approaching, you may, understandably, not want to start the process of buying or leasing another vehicle at this time. Call the leasing company and ask for an extension on your lease. You’re almost sure to get a three-month extension at the same monthly payment and you can ask for more…six months isn’t out of the question.
If you’ve been laid off and making your lease or purchase will be difficult, ask for a hiatus on making your monthly payments. Tell them how much time you need before you can resume making payments or ask for a reduction in the amount. This won’t harm your credit rating. You should tell the lender when you expect to be back to work and any other factors that will affect your ability to begin making your payments again or resume making the full payments.
Remember that the key to success in this tactic is to CALL THE LENDER BEFORE THEY CALL YOU. If they call you first, they’re not calling to help, they’ll be calling because you didn’t make your payments on time. By calling them first, you have the upper hand, and are very likely to get some relief on your loan or lease payments.