The U.S. is galloping toward a recession spurred by the coronavirus outbreak. But this time, dealers say automaker and captive lender partners have responded to the financial crisis much quicker than they did to the last one.
Dealer impact from the pandemic, according to auto finance experts, appears to be a combination of the upending catastrophe of 9/11 and the financial devastation of the Great Recession. In response, captive lenders and auto-heavy banks have quickly mobilized to stave off the growing risk that retailers and their customers may have trouble paying their bills in the coming months.
Lenders last week extended payment relief and payment deferment offers to entice customers who might have postponed a purchase because of financial insecurity.
Some lenders will temporarily waive curtailments, the principal a dealer owes to pay down older inventory financed through the lender. Banks such as Capital One and Ally Financial have taken a different approach, encouraging dealers to reach out individually to discuss options, though some also offer similar payment deferrals for auto customers.