How am I going to keep my wheels while the coronavirus looms?
The fight against the coronavirus has cut off income for millions. While there’s been broad discussion about mortgages and student loans, there’s less discussion about rent.
So far, I’ve heard no governmental discussion about how to proceed if you can’t make car payments.
Car loans present particular, prickly problems, distinct from home mortgages and student loans: the car creditor has a lien and the right to repossess the car if you don’t pay.
The closing of the courts and the lack of paychecks to garnish, which limit other creditors, doesn’t protect the car buyer.
And, there’s no governmental protection (yet) from repossession.
Hurray for Edmonds
Edmonds has assembled information on the announced policy of a long list of car lenders.
As of this writing, their page is dated March 17, with a promise to update it as time goes on.
Universal best practices
Anytime that you’re told to “contact your creditor” during this crisis, don’t rely solely on the phone.
The phone is easy, but I have no confidence in the ability of the lender to track those phone calls or retrieve them when necessary.
Follow up every phone call with a short, written letter, identifying yourself and your loan number, along with the meat of your message.
Keep a copy.
We don’t know how governmental and institutional policies will develop, but you want to be able to prove that you reached out as requested.
What’s to come
What’s different in the coronavirus crisis from other financial downturns is that the pain is huge and widespread.
Creditors and the government will have to develop mitigation strategies that preserve people’s mobility and make it worthwhile to keep paying on existing loans.
We’ll just have to stand by to see what they are.
My expectation is that lenders do not want to repossess a fleet of cars, and they don’t want to further tank their cash flow.
And, where I am, the repo guys are quarantined too.
More as news develops.