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Coronavirus: What to do if you can’t afford your car repayments

Can't afford your car loan repayments because of the COVID-19 pandemic? Here's what to do.

Updated

Fact checked

The impact of coronavirus on the financial health of vast numbers of Australians has been staggering. With so many people being forced to go on sick leave, losing vital sources of income or their jobs altogether, a huge number of Aussies are struggling to meet their car loan repayments. On a positive note, many lenders are addressing the issue to help customers with their repayments. If you have a car loan and can't afford the repayments as a result of COVID-19, find out what options are available to you below.

Father and son with face protective mask to prevent Coronavirus in the car

What do I do if I can't pay my car loan on time as a result of COVID-19?

First and foremost, if you are unable to make your car loan repayments on time as a result of COVID-19, it's imperative that you contact your finance provider. You may have a car loan from a bank or other financial institution, or you may have a finance arrangement through your car dealership.

Bank loans

Most lenders already have financial hardship measures in place for unforeseen circumstances. These circumstances usually include illness, unemployment or a family breakdown. As coronavirus could be the catalyst for any one of these events, there's a chance that your lender will be able to assist regarding the outbreak.

Once you've contacted your credit provider, it may organise for you:

  • A freeze on your interest
  • Waiving your fees
  • More time to pay
  • A flexible payment arrangement
  • A smaller payment to settle the debt

Dealership loans

A number of car manufacturers are also offering assistance to car owners who have finance arrangements through a dealership in this time of crisis. So far, the manufacturers offering hardship assistance include Volkswagen, Lexus, Mitsubishi, BMW, Ford, Nissan and Toyota.

If your manufacturer is not offering coronavirus relief measures, it's important that you still get in touch to inform it of your situation. And please remember that new measures are being put in place regularly. This means that even if your manufacturer has not yet responded to the pandemic, it may soon.

Are the banks offering relief for car loan customers during COVID-19?

While many banks are focusing on relief for small business borrowers, personal and car loan borrowers are still being taken into account by many lenders in the face of COVID-19.

Which lenders are offering repayment deferrals in response to COVID-19?

These are the banks and lenders offering car loan repayment deferrals as a direct result of COVID-19:

  • Bank of Queensland
  • HSBC
  • IMB Bank
  • Macquarie Bank
  • MyState
  • Suncorp
  • Westpac

What else are banks doing to help car loan customers during COVID-19?

Below we've outlined which banks are offering assistance during COVID-19 and what car loan customers can expect from each institution:

LenderAssistance
ANZIf you can't repay your ANZ car loan on time, it's important to contact ANZ as soon as possible. The bank is offering the following measures to assist car and personal loan customers during this time:
  • The ability to use other funds you may have available to continue making loan repayments (e.g. in another transaction or savings account)
  • If you have made extra payments, ANZ can draw your repayments from those funds
  • Reduction in repayments to the minimum repayment amount (if you're currently making higher repayments)
  • If you have a variable rate loan, you can redraw funds from your current car/personal loan based on the extra repayments you have paid in the past (but the amount redrawn will be added to your loan balance and interest will be charged on that higher balance)
More info
Arab Bank Australia Arab Bank Australia is offering financial hardship assistance, plus the opportunity for all customers affected by COVID-19 to potentially defer their loan repayments.
Australian Military BankAustralian Military Bank has addressed concerns over COVID-19 and its general enquiries hotline is open for business as usual. Personal loan customers with Australian Military Bank can contact the lender directly if they are facing financial hardship, to discuss their situation.More info
Bank AustraliaBank Australia is offering assistance to any and all of its customers that are affected by COVID-19. Car loan assistance includes:
  • Interest-free periods
  • No interest rate increases
  • Fee waivers
  • Debt consolidation
More info
Bank of QueenslandIf you're a car loan customer of the Bank of Queensland and are struggling to meet repayments or need financial assistance as a result of COVID-19, you could be entitled to:
  • Deferring your repayments
  • Opting to make interest-only repayments
  • Fees and charge waivers for late or non-payment
  • Other special arrangements in relation to arrears
  • Early access to term deposit funds with fee waivers
More info
Bendigo and Adelaide BankThe Bendigo and Adelaide group is offering customers both assistance with current loans and the ability to qualify for additional finance to help with financial strain. Its COVID-19 measures include:
  • Waiver of fees for the restructuring of loans
  • Waiver of fees for the consolidation of loans
  • Discounted interest rates on personal loans taken out by existing Bendigo Bank customers
  • Early access to term deposit funds with fee waivers
More info
CommBankAlthough CommBank is mainly extending financial help to business customers, if you can't repay your CommBank car loan, you should still contact the bank directly. Branches are being kept open for longer to assist personal loan customers and your case will be considered.More info
CUACUA is addressing the coronavirus pandemic by implementing some measures to:
  • Assist with managing car loan repayments
  • Waiving fees
More info
HSBCHSBC is offering support to all customers affected by coronavirus. If you're facing financial difficulty as a result of COVID-19 and you have an HSBC car loan, you might expect:
  • Deferred scheduled loan repayments
  • Waived fees or charges
  • Interest-free periods
More info
IMB BankIf you have an IMB Bank car loan, IMB is employing relief measures. These measures include:
  • Restructuring of loans
  • Suspension of payments
  • Waiving of fees and charges
More info
INGING has not yet specified what measures it's taking in regard to those affected by COVID-19. However, a specialist support hotline for those facing financial difficulties has been set up for those experiencing financial difficulties (1300 349 166).More info
Latitude FinancialLatitude is offering the hardship assistance to car and personal loan customers who have been affected by COVID-19.
Macquarie BankMacquarie Bank is taking coronavirus measures seriously and employing its measures transparently. You can expect:
  • An immediate 6-month deferral period on all car loan repayments with a 3-month check-in
MyState MyState is offering the following assistance to personal and car loan customers affected by COVID-19:
  • Up to 6 months' repayment deferral
NABNAB is offering the following assistance to personal and car loan customers:
  • Customers who are ahead on their personal loan repayments might be able to reduce their current repayments or use their redraw to get access to additional money.
  • Eligible customers can reduce their personal loan repayments to $100 p/m for a period of up to 6 months. Applicants for this assistance ought to submit their form to NAB before 31 July 2020. However, applications made after this time may still be considered.
More info
RatesetterRatesetter is offering financial hardship assistance to car loan customers. This includes:
  • Adjusting your repayment dates
  • A period of reduced repayments
SuncorpSuncorp has responded to the coronavirus pandemic by offering support to all of its customers. Measures for car loan customers unable to meet their repayments as a result of COVID-19 include:
  • Deferment of loan repayments (including interest only) on a case-by-case basis
  • The option to change to interest-only repayments
  • Waiving of fees and charges for withdrawing from a term deposit or farm management fund
  • No interest rate increases
St.George BankIf you have a car loan with St.George Bank, you can call St.George Assist to discuss your claim.More info
WestpacWestpac is offering support measures for personal and business banking customers. As a car loan customer, you may be able to:
  • Defer your repayments in the short term
  • Reduce your repayments in the short term
More info

What if my car loan provider doesn't have a COVID-19 relief plan?

If your bank isn't featured above and you can't find evidence of a coronavirus relief plan on its website, try not to worry. Lenders will still often have forms of financial hardship assistance in place for unforeseen circumstances. Contact your lender directly and see if it can help. If your lender refuses to help, contact a free financial adviser.

Which car manufacturers are offering support during this time?

How car makers are assisting those in financial hardship
Car manufacturers have begun announcing that there is support available for customers who are struggling to meet finance payments as a result of the coronavirus pandemic sweeping the world. So far, we have information for Volkswagen, Toyota and BMW owners, but we are updating this page all the time. If you work for a carmaker in the financial division, please get in touch!

If you're struggling financially due to COVID-19, check out our guide on what financial help may be available to you during the coronavirus pandemic.

Car companies offering support during this time

Updated: 23/3/20 with Ford Australia and Nissan Australia comments

Volkswagen

Volkswagen Financial Services Australia (VWFS) has published information about how it plans to help those affected by the coronavirus (COVID-19) pandemic. This applies to those who are VW car loan customers.

How VWFS will help customers

Finance customers who find themselves unable to meet car loan repayments as a direct result of the COVID-19 outbreak are being reassured that VWFS will do the "best" they can to help. It is not explained in detail the extent to which they can assist, though a financial hardship request form found online does reveal some of the details they'll likely need.

You'll have to give Volkswagen the reason for your current hardship. Reasons listed include:

  • Unemployment
  • Overcommitment
  • Illness, injury, death
  • Reduced income
  • Business failure
  • Family breakdown
  • Other (to be specified)

It will also need to know the expected duration of the financial difficulty, with three months or less classified as short term and everything else considered long term.

The form goes on to ask for a breakdown of your monthly income and expenditure. There's a section where you can explain how much you'd like to pay towards your loan, if anything at all, and whether you can foresee your circumstances changing.

Volkswagen will also need to see information such as:

  • VWFS contract number/s
  • Payslip
  • Tax return
  • Letter of employment
  • BAS statement
  • Centrelink statement
  • Bank statement
  • Other supporting documents

I need help with my VWFS repayments

VWFS is urging any customers in trouble to communicate with the Hardship Assistance Team:

Email

assist@vwfs.com.au

Phone

1300 734 567
Mon-Fri, 9am-5pm (AEST)

I have a Guaranteed Future Value contract due to mature in the next 30 days

Volkswagen Financial Services states the following about any Guaranteed Future Value contracts that are due to complete in the next month:

VW Guaranteed Future Value contracts

If you have an existing Guaranteed Future Value (GFV) contract that is due to mature in the next month, and have been impacted by COVID-19, please contact remarketing@vwfs.com.au if you are unable to trade-in or return your vehicle at your dealership. If you would like to retain your vehicle, please contact retention@vwfs.com.au.

Which car companies does the VW statement extend to?

Volkswagen Financial Services has published the above information on its own website. Audi and Skoda are subsidiaries of this company, but at the time of writing, we couldn't access their respective domains to verify their commitments to customers in need.

Toyota

Toyota Finance customers experiencing one of the below challenges may be eligible for hardship support:

  • Rescheduling of loan terms and/or payment amount
  • Amended or deferred loans

You are eligible for hardship support if you:

1. Have been medically impacted by COVID-19

If you have been medically impacted by COVID-19, you can supply a medical certificate and apply online for assistance.

2. If you are experiencing financial difficulty as a result of COVID-19

If you are a customer who is facing financial difficulty as a result of COVID-19 and are struggling to meet your car loan repayments, you will need to supply Toyota with the following evidence to make amends to your repayment schedule:

  • For consumer loans, provide evidence of loss of employment or reduction of income. Acceptable options include:
    • Separation certificate (termination of employment)
    • Evidence of employment contract not being renewed
    • JobSeeker Payment/Newstart application or evidence of payments
    • Recent payslip versus previous payslip (dated within the last 3 months) or 2 consecutive months of bank statements
  • For commercial loans, provide evidence of direct or indirect impacts to business.

The contact details, as listed in the FAQs section, are:

  • The Hardship Team, Toyota Finance, PO Box 1354, Macquarie Park NSW 2113
  • 137 200
  • hardship@toyota.com.au

Ford Australia

Ford's Australia and New Zealand CEO, Kay Hart published the following statement on Twitter:

The comment, "Our partner myFord FINANCE is proactively reaching out to retail customers about ways they can support them", indicates Ford may be able to arrange some sort of hardship assistance for finance customers where it is needed.

Nissan Australia

Nissan Australia is offering financial assistance to its car finance customers that have been directly affected by COVID-19. If you have been financially affected, visit Nissan Australia's website and fill out a contact form. Nissan's staff will contact you regarding your claim in 3-5 business days.

Lexus

Lexus Financial Services Customers experiencing one of the below challenges may be eligible for hardship support. This includes:

  • Rescheduling of loan terms and/or payment amount
  • Amended or deferred loans

You are eligible for hardship support if you:

1. Have been medically impacted by COVID-19

If you have been medically impacted by COVID-19, you can supply a medical certificate and apply online for assistance.

2. If you are experiencing financial difficulty as a result of COVID-19

If you are a customer who is facing financial difficulty as a result of COVID-19 and are struggling to meet your car loan repayments, you will need to supply Lexus with the following evidence to make amends to your repayment schedule:

  • For consumer loans, provide evidence of loss of employment or reduction of income. Acceptable options include:
    • Separation certificate (termination of employment)
    • Evidence of employment contract not being renewed
    • JobSeeker Payment/Newstart application or evidence of payments
    • Recent payslip versus previous payslip (dated within the last 3 months) or 2 consecutive months of bank statements
  • For commercial loans, provide evidence of direct or indirect impacts to business.

Mitsubishi Motors Australia

Customers that have been directly impacted by COVID-19 can apply for hardship finance from Mitsubishi.

Mitsubishi Motors CEO John Signoriello's statement

For 40 years, Mitsubishi Motors Australia and the communities in which we operate, have worked together to support one another through the highs and lows. Now, as ever, we are adapting to the COVID-19 challenge and we have put in place actions to support the Mitsubishi team, our staff, dealer network, customers, and the broader community.

If you're concerned about making a payment or need to reduce your payments, please visit http://mit.si/mmfs to complete a hardship application form and submit it to Mitsubishi Motors Financial Services. A representative will contact you within 3-5 days to discuss your individual circumstances.

BMW

BMW has a COVID-19 financial hardship assistance page on its website. The manufacturer says that it understands that unexpected events in life such as changes in income, illness and emergency events (like natural disasters) can cause anyone to fall into financial difficulty.

Its "Hardship Consultants" may be able to:

  • Extend loan terms
  • Set temporary fixed or reduced payments below the current monthly amount
  • Arrange a short-term moratorium, which is essentially an agreed-upon time period where you do not have to make a repayment
  • Defer repayments
  • Capitalise arrears

The contact details for the BMW Financial Services Hardship team are:

Email

hardship@bmwfinance.com.au

Phone

(+61) 3 9264 4118
Ask for a "Hardship Consultant"

Make sure you have together all the relevant documents, including:

  • Income and employment info
  • Your assets
  • Your liabilities
  • Information on how your circumstances have changed
  • Information on how you expect things may change in the future

What other options do I have if I'm facing financial hardship as a result of COVID-19?

If you've lost your job or are facing other financial stress as a result of the pandemic, financial support doesn't end with your bank. You can opt to apply for JobSeeker Payment, contact a local charity such as the Salvation Army or your local community centre. If you're insured, you can also contact your insurance provider to see what you're covered for. Any one or all of these institutions may be able to help with your circumstances.

There are also measures that state governments are taking to help people facing financial problems as a result of COVID-19 being implemented. Measures include actions like freezing household bills and charges and student support services.


Do you work in a car maker's finance department?

If you work in an automotive financial services department and want to let us know what your company is doing, please get in touch!

Refinance your car loan for a lower rate

If it's becoming difficult to meet your repayments, taking out a new car loan to pay off your existing car loan can save you money. You may find that some lenders have reduced their rates in response to COVID-19 and you can qualify for a lower rate loan. Getting a car loan with a lower rate will mean that you pay less in interest each month, which will free up a bit of cash for other things.

If you can't find a car loan with a lower rate, it might be worth opting for a loan with a longer repayment term. Stretching your repayments over a longer period of time will bring the monthly cost down and relieve some of the financial pressure you're feeling. However, remember that opting for a longer repayment term will see you paying more money over the life of the loan.

Data indicated here is updated regularly
$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Application Fee Monthly Service Fee Monthly Repayment
Loans.com.au - New and Dealer Used Car Loan
From 4.67% (fixed)
5.22%
$5,000
3 to 5 years
$400
$0
You'll receive a fixed rate from 4.67% p.a. based on your risk profile
Finance a new car and benefit from features such as fast approval, no ongoing fees and an optional balloon payment. Note: Settle the loan before 30 November 2020 and enter the draw to win a $1,000 fuel voucher. Terms & conditions apply.
IMB New Car Loan
5.45% (fixed)
5.8%
$2,000
1 to 7 years
$275.12 ($250 Application fee + $25.12 PPS registration fee)
$0
You'll receive a fixed rate of 5.45% p.a.
A low minimum borrowing amount of $2,000 that you can use to purchase a new car or one up to two years old.
CUA Secured Fixed Car Loan
6.79% (fixed)
7.16%
$5,000
1 to 7 years
$265 ($175 Establishment Fee + $90 Security Administration Fee)
$0
You'll receive a fixed rate of 6.79% p.a.
A secured loan with a high maximum borrowing amount up to $100,000. Redraw facility and no monthly fees.
IMB Secured Personal Loan
6.45% (fixed)
6.8%
$2,000
1 to 5 years
$275.12 ($250 Application fee + $25.12 PPS registration fee)
$0
You'll receive a fixed rate of 6.45% p.a.
Benefit from this competitive rate by securing the loan with a vehicle up to 6 years old. Use this flexible loan for any purpose.
Greater Bank New Car Loan
From 5.49% (fixed)
5.87%
$5,000
1 to 7 years
$275
$0
You'll receive a fixed rate of 5.49% p.a.
Apply for this loan to finance a brand new car or demonstrator vehicle and find out if you've been approved in 24 hours.
Stratton Finance New Car Loan
From 4.05% (fixed)
5.63%
$10,000
3 to 7 years
$700
$8.25
You'll receive a fixed or variable rate depending on the lender you are approved with
Apply for up to $250,000 and use cash or trade in a vehicle to use as a deposit. Optional balloon payment available.
Credit Concierge Car Loan
From 4.45% (fixed)
5%
$10,000
1 to 7 years
$350
$0
You'll receive a fixed rate of 4.45% p.a. with a comparison rate of 5% p.a.
Get access to over 20 providers to fund a new or used car.

RateSetter Car Loan
From 4.89% (fixed)
5.44%
$10,000
3 to 7 years
$399 (from $249 to $799)
$0
You'll receive a fixed rate from 4.89% p.a.
Borrow up to $100,000 with a RateSetter Car Loan and benefit from no early repayment or exit fees.
Beyond Bank Low Rate Car Loan
4.89% (fixed)
5.16%
$25,000
1 to 7 years
$175
$0
You'll receive a fixed rate of 4.89% p.a.
Take advantage of a competitive rate, pre-approval and no early repayment fees when you finance a car under two years old.
Greater Bank Secured Personal Loan
From 6.49% (fixed)
6.88%
$5,000
1 to 7 years
$275
$0
You’ll receive a comparison rate of 6.88% p.a. on funding from $5,000 - $100,000.
Loans are available on terms of up to 7 years and asset security is required. Get approved in as little as 24 hours.
Jump Payments Car Loans
From 4.47% (fixed)
5.28%
$5,000
1 to 7 years
$295 (Varies by lender, starting from $295)
$10
You'll receive a fixed rate from 4.47% p.a. and comparison rate from 5.28% p.a.
Borrow between $5,000 and $250,000. Get access to customised finance options.
NRMA New Car Loan
From 5.69% (fixed)
6.39%
$5,000
1 to 7 years
$499
$0
You'll receive a fixed rate from 5.69% p. a.
Purchase a new or used car up to 2 years old and benefit from a fixed rate and no monthly fees. Pre-approval available within 5 business hours.
NRMA Used Car Loan
From 6.99% (fixed)
7.7%
$5,000
1 to 7 years
$499
$0
You'll receive a fixed rate from 6.99% p.a.
Finance a used car with NRMA and benefit from a fixed rate term and no monthly fees. Pre-approval available within 5 business hours.
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Compare up to 4 providers

Image: Volkswagen

Top coronavirus guides

Other quick ways to save money

Are you worried about your finances during this time? Don't forget to review your bills – spending a little time on admin, could save you over the weeks and months to come.

Here are some guides on how to save some money on your daily expenses. There are plenty of things you could do, such as checking your energy rates, switching to a low-interest credit card, or simply dropping parts of your insurance that you don't need.

Picture: GettyImages

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