Motor Trade Thematic Review 2025

The Commission has today issued its report on its first thematic review conducted under the Lending, Credit and Finance regime.  The thematic review focused specifically on motor finance, assessing how well firms are complying with the new regulatory regime since it came into full effect in July 2023. 

‘Motor finance’, in the context of the thematic, refers to the various loans and credit agreements that help individuals to spread the cost of buying vehicles such as cars, motorbikes or scooters for their personal use.  In the Bailiwick, motor finance agreements commonly take the form of personal loans, hire purchase (HP), HP with a balloon payment and personal contract purchase (PCP) agreements.  

Included in the scope were two main types of firm – credit providers (or lenders) and credit brokers (usually motor traders or garages), who arrange loans on their customers’ behalf during the process of selling a vehicle.

As part of the thematic, a public survey was launched to gather the public’s personal experiences of obtaining motor finance in the Bailiwick. 

Alongside the survey, questionnaires were sent to lenders and brokers, desk-based reviews were undertaken, and 15 onsite visits were conducted, which provided a comprehensive picture of industry practice.

The findings of the thematic were broadly positive, with most firms demonstrating their commitment to meeting the requirements of the LCF legislation and embedding fair treatment of customers within their practices.  The key findings were as follows:

• Generally, firms are treating customers fairly
• Firms no longer use discretionary commissions arrangements, although improvements must be made to commissions disclosure processes
• Firms take into account the individual circumstances of those customers in arrears and consider a range of appropriate forbearance options
• Firms are generally providing their customers with the loan APR, in accordance with the Rules
• Motor finance advertising is generally clear, but compliance with the LCF Rules is inconsistent
• The information provided by firms to customers could be improved, to ensure that it is complete and (where relevant) accessible
• The quality of customer records held by motor traders could be enhanced

Looking ahead, where issues have been identified, we will work with firms through our ongoing supervision, to ensure that any necessary improvements are made.

A copy of the thematic review is available here or via the Commission’s Legislation and Guidance page under the ‘Thematic Reviews’ heading.  More information can also be found on the consumer pages on our website.

We would like to take the opportunity again to thank everyone who participated in the public survey.

Finally, we would also like to thank all participating firms for their cooperation throughout this process. Their engagement was instrumental in facilitating this assessment of industry practices.