Fears are growing of a crisis in the UK’s £75bn car loan market, where 6.5m vehicles have been financed through leasing deals with monthly payments that are already proving unaffordable for some laid-off as a result of the coronavirus.

The Finance and Leasing Association (FLA), which represents the credit arms of the car manufacturers as well as the banks, said: “It’s early days in terms of quantifying the impact on arrears, but the number of forbearance requests has grown significantly in recent weeks.”

Britain’s car market rests on billions in debt taken out by consumers, many of whom may now struggle to pay.

Around nine out of 10 of the 2.3m new cars sold in a typical year in Britain are paid for using some sort of financing provided by an FLA member. The most common purchase method has been personal contract plans (PCP), where a buyer puts down a deposit and then rents the vehicle for two to three years at a monthly cost, typically around £250.

Sub-prime cars: are car loans driving us towards the next financial crash? Read more

Volkswagen and Ford said they have already introduced emergency measures to help customers. VW, whose brands include Audi, Seat and Skoda, said it is taking “exceptional steps” to help lease-buyers keep hold of their vehicle.

It said customers will be offered a “breathing space” of up to 60 days in which it won’t chase the driver for payment or rack up fees. It said it will also consider extending the period of time for the buyer to pay off the debt.

The FLA said other forbearance measures may include payment breaks, payment reductions or waiving interest. “Lenders are working flat out to provide help but with reduced staff numbers it will take longer to get through. Please bear with them.”

Car dealers are keen to avoid a wave of cars being handed back by buyers unable to continue regular payments. The FLA said that the forebearance measures “may mean that handbacks do not increase as might have been anticipated”.

Problems in the UK car loans market may pale into insignificance compared with the colossal scale of auto lending in the US, which totals $1.3tn (£1tn). Some of it has been securitised into bonds that bear echoes of “subprime” lending common before the financial crisis of 2007-08.

Around $30bn of new subprime vehicle loans were issued in 2019, and there have been reports of some lenders verifying the income of just 8% of borrowers – whose loans are then bundled into bonds sold on Wall Street as an income stream for investors. However, the US Federal Reserve has already stepped in with a programme to support “asset-backed securities”, including bonds holding auto loans.

In the UK, the FLA said it is seeking government help for car loan companies so that they can in turn provide help to customers. “We’re in touch with government to ask that non-bank lenders have direct access to financial support schemes so that they can readily support the increased demand for forbearance from businesses and households,” it said.

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New car sales in Britain plummeted by 44% in March, a steeper fall than during the financial crisis, as the coronavirus led to showroom closures and sent sales tumbling.

Inchcape, which runs one of the biggest networks of franchised car dealership in the UK, said on Tuesday that it was scrapping its dividend and slicing 20% off the pay of the board and senior management.

Meanwhile, the few remaining buyers in the car market are being offered extraordinary deals in a bid to keep sales afloat. Ford said new car buyers will benefit not just from 0% finance deals but also cashbacks and deferrals which mean they will not have to make any payments for the first six months.