Lenders and Auto Loan Relief Programs

The COVID-19 pandemic has dramatically affected the lives of most people around the world, and one of the more significant consequences of the epidemic that you may be dealing with today is related to finances. The pandemic situation developed rapidly and caused unexpected upheaval with minimal warning. Because of this, you may be one of many new car owners who are stressed by a layoff, a stack of medical bills, or other issues. Various auto lenders are providing loan relief to their clients on an individual basis including Mercedes-Benz Financial Services, Volkswagen Credit, and Porsche Financial Services.

How Are Auto Lenders Assisting Their Customers?

Mercedes-Benz Financial Services has announced that payment deferrals are available to its customers upon request and on a case-by-case basis. The specific details of the deferral plan have not been publicized, so you will need to contact your lender by phone or by logging into your account online to request a deferral. Through a deferral, you can stop making your car loan payments during the predetermined time frame to obtain much-needed financial relief.

While some auto lenders offer specific and predetermined loan relief terms, Volkswagen Credit individually reviews the customer's situation and account history before establishing relief tailored to meet the customer's needs. A loan deferment is one of the relief options that you may request from Volkswagen Credit if you are having trouble making your auto loan payments at this time.

If you leased your car or SUV through Porsche Financial Services, you may request a term extension for up to six months. By extending the term on your lease, you can set up more affordable monthly payments. In addition to this option, you could request a lease payment deferral plan individually. Porsche Financial Services is granting deferments for up to 60 days upon request and to qualified individuals. Financial relief for auto loan payments must be requested directly by contacting the lender.

End of Lease Options

At the end of a vehicle lease, you typically must surrender your car or SUV or make arrangements to purchase it. Because of the pandemic, these two options may not be practical or even feasible. If you do plan to surrender your vehicle, you can do so by contacting your dealership for prompt assistance. If you need to stay in your current vehicle and are not financially able to purchase the vehicle with a new car loan or with cash, you may be able to set up a lease extension for a short period.

Loan Deferment FAQs

What is an Auto Loan Deferment?

If your request for an auto loan deferment from your lender is approved, you can benefit from short-term financial relief. Your lender will provide you with a start and end date for your deferment. You must make your regular car payments up to the start date, and you must resume making payments after the deferment end date. During the deferment period, you will not need to make payments. However, interest charges will continue to accrue. The missed payments are not forgiven. Instead, your loan term extends by the deferment period’s length, and the missed payments are tacked on during this loan extension period.

Will an Auto Loan Deferment Damage My Credit?

Because a deferment is agreed to by the lender, the missed payments and term extension will not affect your credit rating. However, any late payments that are made outside the lender’s approved deferment period may be reported by your lender to the credit bureaus as an adverse event.

How Do I Request an Auto Loan Deferment?

Regardless of whether you are seeking a loan or lease relief, you must reach out to your lender directly. The best time to do so is before you miss a payment. This contact may be made by calling the lender’s customer service department or via online account services.