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Our new Payment Deferral explained
As a result of the Financial Conduct Authority motor finance guidance published on Friday 24 April 2020 we are now offering the following processes for supporting customers experiencing temporary financial difficulty as a result of Coronavirus.
If you are experiencing temporary financial difficulties as a result of Coronavirus or expect to be in the near future, we can now offer you a new Payment Deferral to support for up to three months.
During this payment deferral period you will make no payments on your agreement with us and the length (known as ‘term’) of your agreement will be extended by up to three months to accommodate this. This means that the number of payments you make in total will stay the same. However, as you will take 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 split across your remaining monthly repayments, causing them to increase.
If you consider that deferring your payments for three months is too long for your needs, you can choose to defer by one or two months instead. In these cases the length or term of your finance will be extended by the same number of months as you agree to defer with us and your interest costs will be lower.
You may be able to apply for more than one deferral but you will only be able to defer by 3 months in total.
Due to the way the deferral is made, we will need to send you statutory notices of arrears. These are for information purposes to keep you up to date with the current status of your agreement. You will not need to take any further action as long as you adhere to the deferral arrangements.
Important note: If you have a Personal Contract Hire agreement with us and would like to request a payment deferral, we are not able to do this via our online form. Please contact us at 0370 5050 123.
Will this affect my Optional Final Payment?
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 but the interest you are charged for the deferral includes interest on this amount too because this will be outstanding for longer.
Will I have any other additional costs?
Will my credit file be negatively affected?
We will not record any adverse information on your credit file as a result of the deferral. Although we will report any future arrears in the usual way so it is important that you are sure you can afford the increased payments following the deferment. If you do experience further financial difficulties at this time you should call us on 0370 5050 123.
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 if I am already in arrears as a result of circumstances relating to Coronavirus?
What if I have recently made a payment plan to help with coronavirus difficulties?
The following examples illustrate how the additional interest will affect monthly payments:
Alternatives to a Payment Deferral:
- 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 for any vehicle damage and any excess mileage, plus 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 on 0370 5050 123.
- 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.
- You can settle the agreement by paying the settlement figure and then keep or sell the vehicle. A settlement figure can be obtained by logging onto MyMINI Finance.
- 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 MyMINI Finance account.