Representatives from both the taxi and finance industries are working to approach the Treasury for emergency funding to help taxi drivers unable to meet leasing or finance payments.
The Licensed Taxi Drivers’ Association (LTDA), London’s largest taxi driver group, has been in discussions with the Financial and Leasing Association (FLA) learning how further assistance could be handed to taxi drivers currently struggling to pay leasing or finance payments on their cabs.
Financially, the coronavirus pandemic has hit the taxi industry hard across the UK. Work levels have slumped as a result of lockdown measures closing leisure venues, work offices and non essential shops.
The LTDA have also told members that no black cabs should be repossessed before 31 January. This advice comes as some cabbies have begun receiving letters warning of repossessions and notices of defaults.
Since 2018 the black taxi industry has invested nearly £200million into over 3,500 zero-emission vehicles to clean up the capital’s poor air quality.
Steve McNamara, LTDA General Secretary, told members: “Following on from our representations to the Financial Conduct Authority (FCA) we have met with representatives from the Finance and Leasing Association (FLA) and are currently working with them on making a joint approach to the Treasury for emergency funding to support members who are unable to meet leasing or finance payments.
“We are also aware that some members are in receipt of default notices and that they are receiving letters advising that vehicles will be repossessed. The current guidelines from government, which are being followed by all the finance and leasing companies, are that no vehicles will physically be repossessed before 31 January.”
New FCA guidance arrived on 25 November covering users of personal loans, credit cards, motor finance and other finance credit services.
The FCA reiterated that consumers should keep up with payments on their loans or credit products if they can afford to do so, and should only request payment deferrals (also known as freezes or holidays) where absolutely necessary.
The FCA also provided more detail about who is able to apply for payment deferrals under this week’s finalised guidance.
The guidance sets out that:
Those who have not yet had a payment deferral will be eligible to apply for payment deferrals of up to 6 months in total.
Those who currently have a payment deferral will be eligible to apply for a further deferral, as long as the total length of deferrals doesn’t exceed a maximum of 6 months in total.
Those who have previously had a payment deferral of less than 6 months will also be eligible to apply for a further payment deferral, as long as the deferrals don’t exceed 6 months in total.
A firm may assess that a payment deferral is obviously not in a customer’s interest. In such cases, the firm should instead provide tailored support appropriate to the customer’s circumstances.
Consumers who have already had 6 months of payment deferrals or who are in arrears or receiving tailored support, will not be eligible for a further payment deferral. Instead, firms will provide tailored support appropriate to their circumstances. This may include the option to defer further payments.
High-cost short-term credit consumers, such as those with payday loans, will be eligible for a payment deferral of 1 month.
Sheldon Mills, interim Executive Director of Strategy and Competition at the FCA, said: “It is in a consumer’s best interest to only take a payment deferral when absolutely necessary. Those that are able to keep paying should do so.
“However, for those continuing to face payment difficulties as a result of coronavirus, these measures will ensure they continue to be able to access much needed support during this crisis. We also want to highlight that tailored support will still be offered and remains the most appropriate option for many borrowers.”