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Our Payment Deferrals explained

In line with the Financial Conduct Authority motor finance guidance published on Friday 24 April 2020 and updated on 15 July 2020, we are able to provide short-term Payment Deferrals to support customers experiencing (or reasonably expecting to experience) temporary financial difficulties as a result of Coronavirus.

For information on Payment Deferrals, your options and their implications please view our introductory video message from Mike Dennett, the MINI Financial Services Chief Executive Officer.

Payment Deferrals are intended to provide customers with temporary financial support in the exceptional circumstances arising out of the Coronavirus pandemic. If you are experiencing longer-term payment difficulties, please call us to discuss the options available to you.

If you are having temporary difficulties in making your finance or leasing payments due to a loss of or reduction in your income (or income of other members of your household) or you expect to experience such difficulties as a result of Coronavirus, you can apply for an initial Payment Deferral for up to three months’ payments.

IMPORTANT NOTE: A Payment Deferral will increase your overall debt as it will take you longer to repay the amount borrowed. While we will not report a worsening status to your credit file in respect of any payment deferral taken, it may still affect our and other lenders’ future lending decisions. We and other lenders may take into account other information resulting from a deferral when making future lending decisions to ensure a suitable affordability assessment is made, e.g. information provided by applicants or bank account information.

It is therefore not in your best interests to apply for a Payment Deferral unless you need this support due to temporary financial difficulties resulting from the impacts of COVID-19.

Free and impartial debt advice and money guidance is available to help you consider whether a Payment Deferral is right for you. Please click here for more information.

This temporary support is available for applications made by 31 October 2020. If you have payment difficulties after this date, please call us to discuss other options available to you.

What happens at the end of your initial Payment Deferral?

If you have already had a Payment Deferral from us, it is important you consider carefully at the end of the deferral whether:

  • You are able to resume your monthly payments immediately, or
  • You are unable to do so due to circumstances arising out of Coronavirus.

  • If you remain in temporary payment difficulties at the end of an initial deferral period you can apply for an additional deferral of up to a further three months (meaning you could defer your payments for up to six months in total).

    You will need to apply for any additional Payment Deferral in the last month of your initial deferral period and before your monthly payments resume. Other options are also available.

    Initial payment deferral explained.

    These explanatory notes apply unless you already have a Payment Deferral with us made on or after 27 April 2020.

    These explanatory notes are for Select PCP (Personal Contract Purchase), Hire Purchase and Personal Loan agreements. If you have a Personal Contract Hire agreement, please call us for information about your deferral options on 0370 5050 123.

    If you are experiencing or reasonably expecting to experience temporary financial difficulties as a result of Coronavirus, you can apply for a Payment Deferral.

    For more information on Payment Deferrals, your options and their implications please click here to view a video message from our Chief Executive Officer, Mike Dennett.

    How Payment Deferrals work.

    During a Payment Deferral you will make no payments on your agreement for up to three months and you can request one, two or three months. The length (or ‘term’) of your contract will be extended by the same number of months.

    You can apply via the link below for an initial Payment Deferral of one, two or three months. We will contact you via email to inform you if your application is accepted.

    Please only request the number of months’ deferral that you require. If you are able to continue paying your regular monthly payments in full, it is likely to be in your financial interest to do so. This will avoid having to pay additional costs incurred by deferring your payments.

    After providing a deferral to you, we will not collect any payments on your finance agreement during the deferral period.

    If you can afford to make partial payments (for up to three months) and wish to do so, you can apply for a Payment Deferral (up to three months) and then call us to make voluntary payments at the level you can afford. It is likely to be in your interests to do so to limit the additional interest to pay, after payment of any arrears incurred prior to the start of the deferral.

    Extension of your agreement.

    The length (known as ‘term’) of your agreement will be extended by the same number of months as your deferral period (up to three months).

    Extending your agreement by the same number of months deferred means that the number of payments you make in total will stay the same.

    You will, of course, be able to continue using the vehicle during the extended period.

    Additional interest to pay.

    As it will take you longer to pay back the amount borrowed, there will be additional interest to pay. This will be calculated using the same rate stated on your agreement and will be spread across your remaining monthly repayments, causing them to increase.

    Will this affect my Optional Final Payment on a PCP agreement?

    If you are on a Select Personal Contract Purchase (PCP) agreement, a Payment Deferral will delay the date of your Optional Final Payment by the number of monthly payments that you defer.

    The amount of your Optional Final Payment will not change for deferrals of up to three months. However, the interest you are charged for the deferral period includes interest on this Optional Final Payment, because this amount will be outstanding for longer.

    The mileage allowance (total contract mileage) in your agreement will not change for deferrals of up to three months. If you choose to return the vehicle at the end of the agreement you will be charged for any excess mileage over this allowance. The mileage allowance and excess mileage charge per mile is shown on your agreement. You can view your contract details anytime via our MyMINIFinance self-service facility.

    As a result of extending the length of your agreement by requesting a Payment Deferral, your car is likely to be worth less at the end of the agreement. This may affect how you decide to exercise your choice of options available at the end of your agreement. You still have the option to return the vehicle without paying the Optional Final Payment but please be aware that vehicle damage and excess mileage charges may be payable, as per your original contract.

    The following examples illustrate how the additional interest will affect monthly payments:

    These examples are based on an Original Contract Term of 48 months, 9.9% APR with a Payment Deferral Duration of 3 months, and a New contract Term of 51 months:
    Payment Deferral Table

    How can I see the specific additional interest on my agreement?

    After agreeing to your request for a Payment Deferral, we will email you a ‘letter of concession’ detailing the additional interest on your agreement and your new monthly payments. If you have a query or decide not to proceed with your deferral you should call us as soon as possible on 0370 5050 123 and select Option 5 then Option 2.

    How can I reduce the additional interest I have to pay?

    After being granted a deferral, you can make voluntary payments if you can afford to do so. This will reduce the interest charged for the deferral, after payment of any arrears incurred prior to the start of the deferral. You can make payments by calling us on 0370 5050 123 and select Option 5 then Option 1.

    Will I have any other additional costs?

    You will also need to pay for your car to remain taxed and insured with fully comprehensive car insurance during the extra month(s) that your agreement will run. You may also need to pay for an additional MOT or vehicle service if these fall due.

    Notices we may subsequently send to you

    Due to the way a Payment Deferral is arranged, we are legally obliged to send you statutory notices on a regular basis which will show your deferred payments as arrears.

    These arrears notices are for information purposes only and to keep you up to date with the current status of your agreement. You will not need to take any further action in response to this arrears notice as long as we have provided a deferral to you and you adhere with the deferral arrangements.

    Will my credit file be negatively affected?

    While we will not report a worsening status to your credit file in respect of any payment deferral taken, it may still affect our and other lenders’ future lending decisions as we and other lenders may take into account other information resulting from a deferral when making future lending decisions to ensure a suitable affordability assessment is made, e.g. information provided by applicants or bank account information.

    We will also report any future arrears in the usual ways, so it is important that you consider the increased payments following a deferral. 

    What if I have a payment due in the next few days?

    If your monthly payment is due within the next five days, then due to direct debit and standing order arrangements, collection of this payment may still take place. In this case, the period of deferral that you have selected will start from the following month’s payment.

    What if I am already in arrears as a result of circumstances relating to Coronavirus?

    Your deferral will start from your next payment date and we will contact you to discuss the options available to you in relation to your arrears. Any arrears that you may have at the time of starting the deferral will still need to be repaid.

    What happens at the end of my Payment Deferral period?

    We will contact you in good time before the end of your Payment Deferral period about your options.

    If you are able to restart your monthly payments (including the additional interest charged for the deferral), then it is likely to be in your interests to do so.

    If you remain in temporary payment difficulties as a result of Coronavirus and are not able to restart your monthly payments, you will be able to apply for a further deferral, providing you apply no later than 31 October 2020. The details and implications of an additional Payment Deferral are different to an initial deferral. This will be explained to you. Other options may also be available to you, which may cost you less. If you are unsure about how to proceed, it is important you contact us at the time to discuss your options.

    Alternatives to a Payment Deferral:

    1. You may have the right to voluntary terminate your agreement. If you have an agreement regulated by the Consumer Credit Act (this is shown on the top of your agreement) and you no longer wish to keep the vehicle, you may wish to consider this option. In this case, you will have to pay any arrears, pay for any vehicle damage and any excess mileage. If you have paid less than half of the Total Amount Payable under your agreement, you will also have to pay the difference between what you have paid and that figure. If you wish to discuss this option please call us.

    2. You can continue to make your usual monthly payments as normal. Please be aware that if you miss a payment without requesting a Payment Deferral, we will be obliged to report these arrears to credit reference agencies. If you have applied for a Payment Deferral before missing a payment and we have not been able to make the deferral arrangements in time because of operational difficulties as a result of Coronavirus, we will work to prevent this negatively impacting your credit file.

    3. You can settle the agreement by paying the settlement figure and then keep or sell the vehicle. A settlement figure can be obtained via our MyMINIFinance self-service facility.

    4. You can also postpone your payment by making a one-off movement of your payment date by a maximum of 20 days. This can be done online by logging into your MyMINIFinance account.

    Debt help and money guidance.

    Free and impartial debt advice and money guidance is available to help you consider whether a Payment Deferral is right for you at the Money Advice Service’s Navigator Tool and the FCA information page Dealing with financial difficulties during the coronavirus pandemic. Before applying for a deferral we strongly recommend that you access the help that you feel best suits your circumstances.

    If you are confident you are able to deal with your debts without the need for full debt advice, we recommend you:

  • Work out a budget. Resources are available in the FCA information page mentioned above, and
  • Contact all your creditors to discuss your repayments.
  • For most people it makes sense to pay essential expenses and priority debts before any discretionary expenses or non-priority debts. To see if this is right for you, you can use online guides such as the Money Advice Service How to prioritise your debtspage.

     

    Customers in longer term difficulties or with health issues.

    Payment Deferrals are intended to provide support to customers experiencing (or reasonably expecting to experience) temporary payment difficulties in circumstances resulting from the Coronavirus pandemic.

    If you are experiencing payment difficulties which are not short-term resulting from the pandemic, or if you require additional support due to any health issues please call us to discuss the options available to you. We will take into account your individual circumstances in deciding how best to help you.

     

    If you have understood all of the above information, taken debt advice (if required) and you wish to submit an application for an Initial Payment Deferral, please click below to do so.

    Options at the end of your payment deferral.

    These explanatory notes apply if you have a Payment Deferral with us made on or after 27 April 2020.

    These explanatory notes are for Select PCP (Personal Contract Purchase), Hire Purchase and Personal Loan agreements. If you have a Personal Contract Hire agreement, we will write to you with your options at the end of your deferral.

    Please consider the following in good time before the end of your initial deferral period:

     

    If you are able to resume your full monthly payments at the end of the initial deferral period.

    RESUMING YOUR MONTHLY PAYMENTS

    If you are able to resume your full monthly payments (including the deferral interest) immediately and in full at the end of your current Payment Deferral, it is likely to be in your financial interests to do so. This will avoid having to pay additional costs incurred by deferring your payments further.

    We provided you with information on your new monthly payments at the start of your current Payment Deferral. We will write to you again before the end of your deferral period as a reminder of your revised monthly payment amount and date when your payments will resume, as well as information on your other options.

    If we do not hear from you before the first payment is due after your deferral period ends, whether by applying for an additional deferral on this website (see below) or by calling us to discuss the other options that may be available to you we will proceed on the basis that you are able to resume full payments and will collect your revised monthly payment.

     

    If you remain in temporary payment difficulties due to Coronavirus at the end of an initial deferral period and are not able to resume your full monthly payments immediately.

    ADDITIONAL PAYMENT DEFERRALS EXPLAINED

    If you remain in temporary payment difficulties due to Coronavirus at the end of an initial deferral period and are not able to resume your full monthly payments immediately, you can apply via the link below for an additional deferral of up to a further three months (meaning you could defer your payments for up to six months in total).

    Additional Payment Deferrals are intended to provide customers with further financial support in the exceptional circumstances arising out of the Coronavirus pandemic. If you are experiencing longer-term payment difficulties, please call us to discuss the options available to you.

    For information on Payment Deferrals, your options and their implications please click here to view a video message from our Chief Executive Officer, Mike Dennett.

    You will need to apply for any additional Payment Deferral in the last month of your initial deferral period and at least 5 working days before your monthly payments resume. This temporary support is available for applications up to 31 October 2020. If you have payment difficulties after this date, please call us to discuss what other options are available to you.

    We will contact you via email to inform you if your application is accepted. Upon granting a deferral, we will not collect any payments on your agreement during the deferral period.

    Please only request the number of months’ deferral that you require.

    If you can afford to make partial payments (for up to a further three months), and wish to do so, you can apply for a Payment Deferral (up to a further three months) and then call us to make voluntary payments at the level you can afford. It is likely to be in your interests to do so to limit the extra costs of an additional Payment Deferral, after payment of any arrears incurred prior to the start of the initial deferral.

    Extension of your agreement

    The length (known as ‘term’) of your agreement will be extended further by the same number of months as your additional deferral period (up to a further three months). This will be in addition to the number of months the contract was extended for any previous Payment Deferral.

    Extending your agreement by the same number of months deferred means that the number of payments you make in total will stay the same.

    You will, of course, be able to continue using the vehicle during the extended period.

    Additional interest to pay

    As it will take you longer to pay back the amount borrowed, there will be additional interest to pay. This will be calculated using the same rate stated on your agreement and will be spread across your remaining monthly repayments, causing them to increase. This will be the same calculation as on your initial deferral.

    If you have a Select PCP agreement, an additional Payment Deferral will further delay the date of your Optional Final Payment by the number of monthly payments that you have deferred. The interest you are charged for the deferral includes interest on this amount, because this will be outstanding for longer.

    Additional increase in monthly payments and reduction in Optional Final Payment on a PCP agreement due to reduction in value of the vehicle

    As the vehicle will be up to six months older at the end of the agreement, on any Payment Deferral that exceeds 3 months there will also be an increase in your monthly payments for the anticipated depreciation in the value of the vehicle in the extended period over 3 months and the Optional Final Payment will be reduced. The Optional Final Payment is sometimes known as the Guaranteed Minimum Future Value (GMFV) and is payable if you choose to purchase the vehicle at the end of the agreement.

    This depreciation will be calculated using the rate of depreciation set at the beginning of your agreement. It is not affected by any change to market conditions.

    We have decided not to make this change for depreciation on initial Payment Deferrals of up to three months. This means that, also taking into account the additional interest, the impact on the monthly payments is higher for deferrals exceeding three months than for deferrals of three months or less.

    Please see the illustrations below to see how this can impact monthly payments.

    How will an additional Payment Deferral affect my Excess Mileage Charges on a PCP agreement?

    If you have a Select PCP agreement, on any deferral extended to exceed 3 months, we will increase your total mileage allowance so that you will not be charged extra for continued use of the vehicle during the extended period (up to 6 months in total), providing you do not exceed the new mileage allowance. The mileage allowance will be increased in proportion to the increased term of your agreement.

    For example, if you have an agreement of 48 months with a contractual mileage of 40,000 miles, and we provide Payment Deferrals for a total of 6 months, your agreement will be extended to 54 months and your mileage allowance will be increased to 45,000 miles. This means you will not be charged excess mileage charges unless you exceed 45,000 miles.

    Please remember that on an initial deferral of up to 3 months, the mileage allowance will not change.

    The following examples illustrate how the additional interest and depreciation adjustment will affect monthly payments where 6 months payments are deferred:

    These examples below are based on a Payment Deferral Period of 6 months on an agreement with an Original Contract Term of 48 months, Original Contract Mileage of 40,000 miles, and 9.9% APR, which will result in a New Contract Term of 54 months and New Contract Mileage of 45,000 miles:
    Finance table

    Important note: The impact on an individual agreement will depend on a number of factors, including the original amount of credit and contract term, APR, Payment Deferral period and the stage of the agreement at which the deferral is granted. For example, if a deferral is granted nearer to the end of an agreement, the increase in monthly payments is likely to be higher as there will be fewer monthly payments on which to spread the additional costs.

    HOW CAN I SEE THE SPECIFIC ADDITIONAL COSTS ON MY AGREEMENT?

    After agreeing to your request for an additional Payment Deferral, we will email you a ‘letter of concession’ detailing the additional costs of your agreement, your revised monthly payment and the extended term of your agreement. If you have a query or decide not to proceed with your deferral, you should call us as soon as possible on 0370 5050 123 and select Option 5 and then Option 2.

    HOW CAN I REDUCE THE ADDITIONAL COSTS I HAVE TO PAY?

    After being granted a deferral, you can make voluntary payments if you can afford to do so. This will reduce the costs charged for the deferral, after payment of any arrears incurred prior to the start of the initial deferral. You can make payments by calling us on 0370 5050 123 and select Option 5 and then Option 1.

    WILL I HAVE ANY OTHER ADDITIONAL COSTS?

    You will also need to pay for your car to remain taxed and insured with fully comprehensive car insurance during the extra month(s) that your agreement will run. You may also need to pay for an additional MOT or vehicle service if these fall due.

    NOTICES WE MAY SUBSEQUENTLY SEND TO YOU

    Due to the way a Payment Deferral is arranged, we are legally obliged to send you statutory notices on a regular basis which will show your deferred payments as arrears.

    These arrears notices are for information purposes only and to keep you up to date with the current status of your agreement. You will not need to take any further action in response to this arrears notice as long as we have provided a deferral to you and you adhere with the deferral arrangements.

    WILL MY CREDIT FILE BE NEGATIVELY AFFECTED?

    While we will not report a worsening status to your credit file in respect of any payment deferral taken, it may still affect our and other lenders’ future lending decisions. We and other lenders may take into account other information resulting from a deferral when making future lending decisions to ensure a suitable affordability assessment is made, e.g. information provided by applicants or bank account information.

    We will also report any future arrears in the usual ways, so it is important that you consider the increased payments following a deferral.

    WHAT IF I HAVE A PAYMENT DUE IN THE NEXT FEW DAYS?

    If your monthly payment is due within the next five days, then due to direct debit and standing order arrangements, collection of this payment may still take place. In this case, the period of deferment that you have selected will start from the following month’s payment.

    WHAT HAPPENS AT THE END OF MY PAYMENT DEFERRAL PERIOD?

    We will contact you in good time before the end of your deferral to explain your options.

    If you are able to restart your monthly payments (including the additional costs for the deferral), it will be in your interests to do so.

    If, at that time, you remain in payment difficulties and are not able to restart your monthly payments, you should contact us to discuss the options available to you.

    Other options that may be available to you.

    1. You may have the right to voluntary terminate your agreement. If you have an agreement regulated by the Consumer Credit Act (this is shown on the top of your agreement) and you no longer wish to keep the vehicle, you may wish to consider this option. In this case, you will have to pay any arrears, pay for any vehicle damage and any excess mileage. If you have paid less than half of the Total Amount Payable under your agreement, you will also have to pay the difference between what you have paid and that figure. If you wish to discuss this option please call us.

    2. You can settle the agreement by paying the settlement figure and then keep or sell the vehicle. A settlement figure can be obtained via our MyMINIFinance self-service facility.

    3. You can also postpone your payment date by making a one-off movement of your payment date by a maximum of 20 days. This can be done online by logging into your MyMINIFinance account.

     

    Sources of free and impartial debt advice and money guidance.

    DEBT HELP AND MONEY GUIDANCE

    Free and impartial debt advice and money guidance is available to help you consider whether an additional Payment Deferral is right for you at the Money Advice Service’s Navigator Tool and the FCA information page Dealing with financial difficulties during the coronavirus pandemic.

    Before applying for a deferral we strongly recommend that you access the help that you feel best suits your circumstances.

    If you are confident you are able to deal with your debts without the need for full debt advice, we recommend you:

  • Work out a budget. Resources are available in the FCA information page mentioned above, and
  • Contact all your creditors to discuss your repayments.

  • For most people it makes sense to pay essential expenses and priority debts before any discretionary expenses or non-priority debts. To see if this is right for you, you can use online guides such as the Money Advice Service How to prioritise your debts page.

     

    Customers In longer term difficulties or with health issues.

    Payment Deferrals are intended to provide support to customers experiencing (or reasonably expecting to experience) temporary payment difficulties in circumstances resulting from the Coronavirus pandemic.

    If you are experiencing payment difficulties which are not short-term resulting from the pandemic, or if you require additional support due to any health issues please call us to discuss the options available to you. We will take into account your individual circumstances in deciding how best to help you.

     

    If you have understood all of the above information, taken debt advice (if required), and you wish to submit an application for an Additional Payment Deferral, please click below to do so.

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