We appreciate that, for some, COVID-19 has squeezed household budgets and the current uncertainty might mean that you want to limit your spending right now.
If you can restart your normal monthly payment but can’t afford to make up all of your Deferred Payments in one go, Spread the Cost could help you to keep your payments at a level that is affordable within your overall budget.
Whilst you were not charged any interest for the period of your Payment Deferral please understand that if you choose Spread the Cost, interest, at a rate equivalent to the APR for your finance agreement, will be charged on your Deferred Payment(s) from the end of the Payment Deferral Period until your Deferred Payment(s) are made up. This does mean that Spread the Cost will cost you more than Pay Now.
With Spread the Cost, each month, as well as collecting your normal monthly payment under your finance agreement, we will also collect the extra monthly amount chosen by you as part of your Spread the Cost option. The extra monthly amounts, which we refer to as your “Spread the Cost Payments’, will to go towards making up your Deferred Payment(s) over time.
For your use of the Spread the Cost option, interest will be charged on your Deferred Payment(s) from the end of your Deferral Period until the Deferred Payment(s) have been made up. That interest will be in addition to your Spread the Cost Payments and will need to be paid by you in a separate payment.
Once your Spread the Cost Payments have been completed you can pay off the interest due at any time during the remaining term of your finance agreement. Any interest and Spread the Cost Payments that have not been paid off before the date of your last normal monthly payment will be added to the normal final payment under your finance agreement.
Working out how much extra to pay
To work out what level of extra payment might suit you, please use our Deferral Payment Interest Calculator.
The total of your Spread the Cost Payment and your normal monthly payment, will need to be in line with what you can afford.
Due to the interest charge for using Spread the Cost, the longer you take to make up your Deferred Payment(s), the more you will have to pay in interest charges. By fixing a higher monthly Spread the Cost Payment, your Deferred Payments will be made up more quickly and so you will pay less interest.
Keep in mind that the interest charge for Spread the Cost will be added to your final payment if it has not been paid before then and you will need to make sure you have enough money in your account to cover both it and your final payment.
Who might Spread the Cost be good for?
- Customers who want to spread the cost of making up their Deferred Payment(s) and want control over their monthly spending.
- Customers who can afford more than just their normal monthly payments but whose budget would be significantly strained by the single payment required for Pay Now.
Who might Spread the Cost not suit?
- Customers who are able to pay their Deferred Payment(s) and do not want to pay the interest charged for using the Spread the Cost or Pay at the End facilities.
- Customers looking to part-exchange their vehicle soon/before their Deferred Payment(s) and interest are paid off.
Spread the Cost - Advantages
- You can spread the cost of making up your Deferred Payment(s) so do not need to pay them all off at once.
- Being able to fix the extra monthly amount you pay to make up your Deferred Payment(s) gives you more flexibility to keep your payments at a level that is affordable within your overall budget.
Spread the Cost - Disadvantages
- As there are interest charges for Spread the Cost you will pay more than you would with the Pay Now option.
- Your finance agreement will not be considered fully up to date until we have received all of your Deferred Payment(s) and the interest due in full.
- If you part-exchange your vehicle before you have paid off all of your Deferred Payment(s) and any interest due, the part exchange value you receive may be reduced.