Coronavirus and Car Loans
With the current financial pressures of the coronavirus pandemic, a lot of working people are delaying the purchase of a car. Many of them have lost their jobs, or been furloughed or laid off or have decreased income, and so they no longer have the means to budget for monthly car payments.
However, other people don’t have the luxury of deciding to delay their purchase. They bought a car before coronavirus hit, and they have the payments already.
Some of these people have called us asking how they can talk to their loan holder. Here is a script we put together to help.
Letter to an auto loan holder:
“Coronavirus has impacted our finances and reduced our income to the point that we need to re-assess our monthly budgeting.
We are contacting you to let you know that we will need to renegotiate our existing car loan.
We are willing to pledge a certain amount of the stimulus and other assistance that we receive to pay these bills, but since many of these forms of support are pending, we may not have the cash to continue car loan payments as scheduled.
If you are financing in-house we ask that you provide forbearance or some other modification to us until coronavirus lock downs loosen up.
If you’re not financing in-house, we request that you contact the lender to intercede on our behalf.
We ask that you contact us with any questions, so that we can resolve this to avoid repossession or other unintended consequences.
We appreciate your help during this time.”
Now, this letter is not overly complicated. It acknowledges the realities involved in the situation. Like any other kind of loan, the lender can afford to pause that loan until coronavirus is lifted. It’s not really going to cost them anything in the long run, except time and opportunity cost. On the other hand, the borrower is financially squeezed and suddenly can’t afford the payments.
We know that the demand to honor any existing contract is inherent in capitalism’s creed, but we also know that usury without compassion has been vilified in many different eras of time and across different human societies. The pandemic shows how cruel capitalism can be, if it is not modified by common sense.
We hope that these lenders do their part in helping to make the coronavirus pandemic less disruptive to the economy as a whole. When they don’t, you have to advocate for yourself. But you’re not alone!
At GTKYF Foundation Inc., we argue for the rights of small businesses and advocate for families. We want to help working people to succeed through this challenging time. Consider an out of the box approach to your financial recovery.