Covid-19: How will the second lockdown affect vehicle leasing?

Covid-19: How will the second lockdown affect vehicle leasing?

Covid-19: How will the second lockdown affect vehicle leasing?
02 November 2020

Vehicle leasing during Covid-19 lockdown

This is "the worst public health crisis for a generation" said Prime Minister, Boris Johnson, while announcing a second national lockdown which is due to start on 5th November. The situation is constantly changing, leaving people confused and hence seeking clear and confirmed information from experts. 

We can't predict the future but as car and van leasing experts, we've put together this handy guide on what you can expect to happen with vehicle leasing during the second lockdown.

Q: Can I order a new vehicle during the lockdown?

Yes, at Commercial Vehicle Contracts we’ve been open during the entire pandemic with all our staff working remotely. You can still search and compare deals online or contact us via e-mail, website "contact us" form, online chat or telephone without having to leave the house. Once you've picked your new car, van, pickup, or any other personal or business vehicle and a leasing deal you're interested in, you can apply for finance online and sign all paperwork electronically. We will also arrange a contactless delivery of your new vehicle straight to your door.

Q: Will car dealerships be open during the second lockdown?

As per Prime Minister's announcement, all non-essential retail has to close from Thursday, 5th November, and this includes dealerships. Online sales will continue and the vehicle sector is more than prepared for the second lockdown.

Q: I've ordered a new car/van. Will it be delayed?

Most vehicle production factories closed for the pandemic outbreak earlier this year but re-opened as soon as the lockdown ended and re-started the production across the world.

With the effective social distancing and health monitoring measures put in place at all manufacturing facilities, it is expected that vehicle production will continue during the second lockdown, which is due to end on 2nd December.

What does this mean for new cars and vans? Well, the closures earlier this year mean that the waiting time on factory orders is a bit longer. If you’ve recently ordered or planning to order a new vehicle that's factory-built, there’s a chance your delivery may take a little longer than it would normally have. Bear this in mind if your current lease is close to an end -  we highly recommend that you order your next vehicle as soon as possible for that extra peace of mind.  

Vehicle production workers working safely

 Q: Are there any vehicles in stock now?

There is still plenty of cars, vans, pickups and other commercial vehicles that have already been built and "in stock"  so you could be driving a brand new one in a matter of weeks.  You may have to be more flexible on specifications or colour but it is an option if you can't wait for a vehicle to be built. Check out our top deals - we've got the lowest rates on the electric Renault Kangoo van, great leasing deals on the Peugeot Partner van, and competitive rates on cars for commercial and personal use.

Q: Are lease vehicles still being delivered?

The deliveries of new cars and vans are still taking place, depending on the funder and the dealerships, however, there are driver shortages since the delivery drivers tend to be senior in age and hence self-isolating. The Department for Transport has also ordered that the logistics, including vehicle delivery and collection services, can carry on but need to be done in line with Coronavirus safety guidelines. All delivery drivers have been instructed to sanitise every vehicle at handover, cleaning a steering wheel, gear stick, door handles, and everything else they touch.

Safely cleaning commercial vehicles

Q: My lease agreement is ending soon. What should I do?

You can still hand back your vehicle as normal. The inspection of the car or van will strictly follow the health and safety guidelines so there is nothing to worry about that. If you're self-isolating, you can ask your lease provider for an extension of your agreement. The options available vary between funders but usually, you can extend your contract formally (by three months or more) or informally (shorter rolling period).

Q: Am I still responsible for company car tax if I've been furloughed or it can’t be collected?

If you are on furlough or working from home because of the Coronavirus and have a company car, you are still liable for company car tax as it is still treated as available for private use.

HMRC has published new guidance on the Benefit-in-Kind and company cars during the pandemic. If the movement is restricted and therefore you can't hand the car back or it can't be collected, HMRC will classify the company car as unavailable if: 

  • the agreement ended - from the day they car keys are returned to the employer or other person if instructed by the employer
  • the agreement has not ended  - after 30 consecutive days from the date that the keys are returned to the employer or another person if instructed by the employer

After lockdown, it still may take a while until the car is collected but as long as the employee has no access to the car, HMRC will treat is as unavailable.

Q: Can I amend my mileage if I'm using my lease car or van less because of lockdown?

The answer is yes. You need to contact your leasing company and ask them to reduce your contracted mileage. Reducing your mileage will bring your monthly payments down but make sure you don't underestimate as you will be charged per any extra mile you go over your limit. 

Q: What if I’m not in a position to make my lease payments?

The Finance and Leasing Association says that consumer support over the pandemic period will be "absolutely vital – especially for those whose income is severely affected by the coronavirus disruption". If you find yourself financially struggling because of the Coronavirus, please contact your leasing provider as soon as possible so you can discuss your options, which may include:

  • temporary payment holiday for your monthly payments
  • annual mileage review to bring your payments down
  • the possibility of downgrading your lease vehicle to reduce monthly payments

You could also ask for a termination fee on the early settlement of your agreement, which is most likely to be at least half of your outstanding payments. This option will only be available if you are more than halfway through your lease.

The Finance and Conduct Authority (FCA) has a variety of measures to support consumers facing payment difficulties due to Covid-19.  

If you are a business owner or employer, ask your bank for eligibility for one of the government’s COVID lending schemes. You can find out what financial support you can get for your business here.

Get in touch for more information



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