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Payment Deferrals

Last Updated: 01 April 2021

**The deadline for applying for payment deferrals ended at midnight on 31 March 2021**

Customers with an existing payment deferral covering payments beyond 31 March 2021, will be entitled after 31 March to apply to extend their deferral providing these deferrals cover consecutive payments and subject to the maximum of 6 months in total.
A payment deferral must not cover any payments after 31 July 2021.

If you think you may be eligible for a subsequent payment deferral, please contact Finance Collections on 0370 5050 185 or email financecollections@alphabet.co.uk

Payment deferrals explained

In line with the Financial Conduct Authority motor finance guidance published on 24 April 2020, updated on 15 July 2020 and more recently in November 2020, we are able to provide short-term payment deferrals to support individuals and small partnerships regulated by the Consumer Credit Act experiencing (or reasonably expecting to experience) temporary financial difficulties as a result of COVID-19.

During a payment deferral you will make no payments on your agreement, but the sum of the deferred payments will be spread over the remaining term of your contract once payments resume and repaid in addition to your normal monthly rental. The maximum length of deferred payments is six months in total. Each individual application cannot exceed three months. 

Any application should be made at least 5 working days before your next monthly payment becomes due. 

Non-continuous payment deferrals: If you have resumed monthly repayments after an initial payment deferral and experience temporary financial difficulties again due to COVID-19, you can apply for a further deferral of up to three months (subject to the maximum of six months’ deferred payments overall when taking into account previous deferred payments).  If you have missed a monthly payment after a payment deferral has ended, you will not be entitled to a further deferral.

The deadline for applying for payment deferrals has been extended until midnight on 31 March 2021.

There is one exception for customers with a payment deferral covering payments beyond 31 March 2021, who will be entitled after 31 March to apply to extend their deferral providing these deferrals cover consecutive payments and subject to the maximum of 6 months in total. Also, a payment deferral must not cover any payments after 31 July 2021, and so in some cases a customer may not be entitled to extend to a full 6 month deferral (for example a customer with a deferral starting in March 2021 will not be entitled to apply to extend the deferral beyond July 2021 and so in this case their maximum overall deferral period will be 5 months). A customer newly impacted by COVID-19 will have to apply in good time before their February 2021 payment is due if they would like to be considered for up to 6 months of payment deferrals.

Repayment of an agreed payment deferral

Once your payment deferral comes to an end, the outstanding sum will be spread evenly over your remaining monthly rentals, starting from the month after your payment deferral expires. 

When your deferral period is coming to an end you will receive a letter explaining how much is due and when the amount will be debited from your bank each month. Your direct debit date, along with the rest of your contract, will remain the same.

Important Note: A payment deferral will increase your monthly rentals for the remaining months of your contract following the end of the deferral period. Whilst we will not report a worsening status to your credit file in respect of any payment deferral taken, it may still affect our and other lenders’ future lending decisions. We and other lenders may take into account other information resulting from a deferral when making future lending decisions to ensure a suitable affordability assessment is made, e.g. information provided by applicants or bank account information.

It is therefore not in your best interests to apply for a payment deferral unless you need this support due to temporary financial difficulties resulting from the impacts of COVID-19.

Payment deferrals are intended to provide customers with temporary financial support in the exceptional circumstances arising out of the coronavirus pandemic. If you are experiencing longer-term payment difficulties, please call us to discuss the options available to you.

Free and impartial debt advice and money guidance is available to help you consider whether a payment deferral is right for you. Please see section 'Debt help and money guidance'  below for more information.

Payment deferral illustration

The following illustration highlights how a three month payment deferral could affect your monthly payments. 

Payment deferral period (in months):

3
Your current monthly payment:

£334

Total deferred rental amount:

£1,002

Contract term remaining, following deferral period (in months): 12

Following your deferral period, your monthly payment will be:

£418

In summary, your new monthly payment will be made up of your current monthly payment, plus the total deferred rental amount, spread equally across the remainder of your contract.

i.e. £334 + (£1,002/12) = £418

Debt help and money guidance

Free and impartial debt advice and money guidance is available at not-for-profit debt advice bodies. Please see:

If you are experiencing payment difficulties we strongly recommend that you access the help that you feel best suits your circumstances.

You can get guidance or not-for-profit debt advice through both digital and telephone services and, subject to local and national pandemic restrictions, face to face. See www.moneyadviceservice.org.uk for details.

If you are confident you are able to deal with your debts without the need for full debt advice:

  • You may wish to work out a budget. Resources are available on the FCA information page mentioned above, and
  • We would recommend you contact all your creditors to discuss your repayments.

For most people it makes sense to pay essential expenses and priority debts before any discretionary expenses or non-priority debts. To see if this is right for you, you can use online guides such as the Money Advice Service ‘How to prioritise your debts’ page.

FAQs

Can I request a payment deferral if I have a payment due soon?

If your monthly payment is due within the next five days, then due to direct debit and standing order arrangements, collection of this payment may still take place. In this case, the period of deferral that you have selected, will start from the following month’s payment.

I am in arrears, can I still request a payment deferral?

Your payment deferral will start from your next payment date and we will contact you to discuss the options available to you in relation to your arrears. Any arrears that you may have at the time of starting the deferral, will still need to be repaid after your deferral period ends.

I've had a deferral for less than 6 months, can I request another?

You can apply via the link below for an additional deferral, subject to the maximum six months in total. You will need to apply in the last month of your deferral period and at least five working days before your monthly payments resume. This is important, as if you apply after your monthly payment becomes due at end of a deferral, you will go into arrears and may lose your right to a further deferral.

Non-continuous payment deferrals: if you have been able to resume your monthly payments after a previous deferral and now have become in need of a further deferral, you can apply for an additional deferral of up three months (up to six months in total) at least five working days before your next monthly payment falls due. If you have missed a monthly payment after a payment deferral has ended, you will not be entitled to a further deferral.

A reminder that the deadline for making an application is 31 March 2021, unless you are applying to extend a deferral that covers payments beyond 31 March 2021. Please note, you must apply for a subsequent deferral period before the end of your existing deferral period. If you do not, you may lose the right to a second deferral. Please see above for more information. 

Additional payment deferrals are intended to provide customers with further financial support in the exceptional circumstances arising out of the COVID-19 pandemic. If you are experiencing longer-term payment difficulties, please call us to discuss the options available to you.

Can I request a payment deferral for more than 6 months?

You will not be entitled to apply for an additional payment deferral as the maximum available is 6 months in total. Please contact us to discuss your circumstances and other solutions available to support you.

We recognise you may be facing uncertainty at this time and that it may be difficult for you to make long-term decisions in these circumstances. Please do not let this prevent you from contacting us.

If I take a payment deferral will it affect my credit score?

While we will not report a worsening status to your credit file in respect of any payment deferral taken, it may still affect our and other lenders’ future lending decisions as we and other lenders may take into account other information resulting from a deferral when making future lending decisions to ensure a suitable affordability assessment is made, e.g. information provided by applicants or bank account information. 

We will also report any future arrears in the usual ways, so it is important that you consider the increased payments following a deferral.

I have received an arrears notice, what should I do?

Due to the way a payment deferral is arranged, we are legally obliged to send you statutory notices on a regular basis, which will show your deferred payments as arrears. These arrears notices are for information purposes only and to keep you up to date with the current status of your agreement.

You will not need to take any further action in response to this arrears notice, as long as we have provided a deferral to you and you adhere to the deferral arrangements.

What happens at the end of my payment deferral period?

The sum of the deferred payments will be collected by Alphabet in equal monthly payments over the remaining term of your contract, when payments resume.

We will contact you in good time before the end of your payment deferral period to discuss your options.

When my payment deferral ends, how will I pay this back?

The agreed payment deferral will be recalculated and automatically added to your remaining monthly rentals, starting from the month after your payment deferral expires.

If you are able to resume your monthly payments, you are not required to contact us or take further action as this will be processed automatically, as per your agreement. 

If you cannot afford to resume full payments at the end of your deferral period, please contact us to discuss your options as we may be able to offer you a second deferral period or an alternative repayment plan.

If you do not contact us and there is no agreed deferral in place, we will assume that you can afford to make your repayments in full and will debit your account accordingly. Please note, that your direct debit date, along with the rest of your contract terms will remain the same.

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