06 Apr 2020
Posted in Automotive
Auto companies give consumers extra breathing space during COVID-19 pandemic
Automakers are finding ways to soften the impact of the coronavirus pandemic on customers by offering a range of incentives and relief programs;
Mike Vousden, Automotive Analyst at GlobalData, a leading data and analytics company, offers his view:
“Hyundai announced on 3 April that it would extend any warranty that was due to expire during the crisis by up to three months. That equates to more than 1.2 million vehicles worldwide with warranties that were due to expire between March and June 2020. This will give customers some welcome reassurance that, if their car breaks down during the crisis, Hyundai will still cover the repair.
“Automakers are also softening the blow on customers’ purse strings considering many may be facing temporary layoffs or redundancies. In the US alone, OEMs including Honda, Ford, General Motors, Toyota and Porsche are all offering payment deferrals on a case-by-case basis for customers that have leased vehicles from them. Elsewhere, Fiat-Chrysler, Kia and Volkswagen are offering interest-free financing on certain models as an incentive to new customers.
“With many employees locked down in their own homes, entire fleets of company cars sit unused. To reduce the tax burden on those unable to use their company cars, the UK’s HM Revenue and Customs has agreed not to count benefit-in-kind taxation if employees are able to ‘virtually’ hand the keys back to their employer – for example, by posting them. This has the added benefit of encouraging people to reduce their travel, limiting the spread of the virus.
“COVID-19 poses an extraordinary threat, both to physical and financial health. Manufacturers are aiming to lessen the burden on customers by pausing finance payments, or offering more favorable terms for purchasing a new vehicle. With vehicle sales in 2020 expected to take a significant hit as a result of the pandemic, stimulus such as this will help keep the industry afloat.”