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Car payment holidays
Car payment holidays - what they are, and how to get one

What is a car payment holiday? And how to get one

  • Published 24 March 2020
  • 3 minute read
  • By Murray Scullion

A car payment holiday works broadly in the same way as a mortgage payment holiday.

Your finance provider will temporarily allow you to stop payments. At the end of the holiday, the finance company will recalculate your monthly payments to make up the shortfall.

Car finance payment holidays (PCP and HP)

This section is specifically for those in Personal Contract Purchase (PCP) and Hire Purchase (HP) style finance agreements.

If you’re in either of these types of agreements, there’s a strong chance it’s linked to a scheme backed by the manufacturer of your car. Most car makers are willing to help out in some way if you're in financial trouble.

If you do want to apply for a payment holiday, it’s best to contact the manufacturer directly to discuss your options.

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Car leasing payment holidays

Can you get a payment holiday on a car leasing agreement?Can you get a payment holiday on a car leasing agreement?

While you can lease a car directly from a car manufacturer, a lot of people reading this will be leasing cars through third-party finance providers.

The UK body for companies engaged in vehicle leasing and rental, the British Vehicle Rental and Leasing Association (BVRLA), has asked the Chancellor for support during the Covid-19 pandemic sweeping across the world in spring 2020.

In the meantime, as leasing works differently to PCP or HP, there’s little chance of a payment holiday.

However, leasing companies up and down the country are urging customers to contact them if they are struggling to keep up payments. Leasing companies, in general, are willing to listen to people based on their individual circumstances.

Guide: how to lease a car if you've got a poor credit score


If you are in need of a payment holiday because of a loss of earnings, manufacturers and finance providers are all largely saying the same thing: get in touch.

Most will be willing to make some sort of arrangement. Deferring your payments is a much better option than simply skipping them, which can have much larger ramifications, including negatively affecting your credit score and - in the worst-case scenario - having your car repossessed.

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