The car finance scandal has changed how people talk about car finance in the UK. For some drivers, it raised questions about agreements they already signed. For others, it has shifted how they think about taking out finance in the future.

If you are planning to use car finance over the next few years, it is reasonable to wonder what might change. You may also be asking whether future deals will be clearer, fairer, or simply structured differently.

This guide looks at how car finance after the scandal may evolve. It focuses on likely changes to incentives, transparency, and sales behaviour, while recognising that reform tends to be gradual rather than instant.

Key takeaways

• The scandal highlighted conflicts built into older commission models
• Interest rate discretion is likely to be more tightly controlled
• Transparency at the point of sale is expected to improve
• Dealer remuneration may change to reduce incentive conflicts
• Affordability checks may become more consistent and cautious
• Even after reform, consumers will still need to ask clear questions

Why the old commission model caused problems

Many of the car finance issues now being discussed link back to how commission worked in the past.

In some models, dealers or brokers could influence the interest rate offered to a customer. Higher interest rates often meant higher commission. That structure created an obvious conflict of interest, especially when customers were not told how pricing decisions were made.

The problem was not that commission existed. It was that the impact of commission was rarely explained in plain language. Many drivers believed the rate they were offered was standard or fixed, without realising there was flexibility behind the scenes.

As these practices became more widely understood, car finance claims and PCP claims increased. That is why commission sits at the centre of many discussions about reform and future regulation.

Expected limits on interest rate discretion

One of the most likely outcomes of regulatory scrutiny is tighter control over how interest rates are set.

Future agreements may involve clearer limits on dealer discretion, with less room to adjust rates based on internal incentives. In some cases, pricing may be standardised or fixed more closely to lender criteria.

This would reduce the risk of customers being charged more without understanding why. It would also address a key concern linked to car finance mis-selling, where pricing decisions were not transparent.

Any changes in this area are likely to form part of a broader FCA car finance update [1], rather than a single rule applied overnight.

Greater transparency at the point of sale

Another expected shift is improved transparency during the sales process.

Future car finance deals are likely to place more emphasis on explaining:

• how the interest rate is set
• whether commission is paid
• the total amount payable over the agreement
• what happens at the end of the term
• the impact of early settlement or changes

The goal is not to overwhelm buyers with information. It is to make sure key points are clear before any agreement is signed.

This is particularly relevant given how often pressure and speed played a role in past sales. If you want more context on that, this guide explains how it fits into mis-selling concerns: Does Pressure in the Showroom Count as PCP Mis-Selling?

Possible changes to how dealers are paid

Reform discussions also include how dealers are remunerated.

Some models being explored involve reducing or removing the link between interest rates and dealer earnings. Others involve flat fees or fixed payments that do not change based on how the finance is structured.

These approaches aim to reduce incentives to push certain products or pricing. If applied carefully, they could address some of the structural car finance issues seen in older agreements.

That said, the details matter. How these models are implemented will determine whether they genuinely improve outcomes for consumers.

How affordability checks may tighten

Affordability assessments are another area likely to change.

In the future, lenders may apply more consistent and cautious checks when deciding whether a customer can afford a deal. That could involve clearer income verification and more realistic assumptions about ongoing costs.

Stricter affordability rules may help prevent unsuitable lending. Over time, they may also reduce the number of car finance claims linked to agreements that were not appropriate for a customer’s circumstances.

For consumers, this could mean fewer borderline approvals, but clearer explanations of why a deal is suitable or not.

What fixed-rate or no-commission models could look like

Some lenders are already experimenting with fixed-rate or no-commission finance models.

Under these approaches, the interest rate is set upfront and does not change based on dealer incentives. Dealers may receive a fixed fee instead of commission tied to pricing.

For buyers, this can feel simpler. The cost is clearer. The incentives are easier to understand. There is less guesswork about why a particular rate was offered.

These models will not replace all existing structures, but they offer a glimpse of how PCP changes and wider car finance reform could move toward simpler pricing.

How these changes may protect future buyers

Taken together, these shifts aim to address the root causes of many mis-sold car finance complaints.

Clearer pricing, fewer conflicts, better disclosure, and stronger affordability checks should all make it easier for buyers to understand what they are agreeing to.

Over time, this could reduce the number of PCP claims and car finance claims linked to unclear or unfair practices. That is the long-term objective behind regulatory scrutiny.

Why consumers should still ask questions

Even with reform, car finance will not become risk-free or effortless.

Agreements will still vary. Terms will still matter. Sales conversations will still influence decisions.

If you are taking out car finance in the future, it will remain important to ask:

• how the interest rate was set
• whether commission is involved
• what the total cost will be
• what options exist at the end of the agreement
• how flexible the agreement is if your situation changes

Understanding what makes a contract fair is still relevant, even after reform. This guide explains those principles in more detail: What Makes a Car Finance Contract Unfair?

What this means for people with older agreements

It is also important to note that changes going forward do not resolve concerns about the past.

Drivers with agreements from earlier years may still be reviewing their options. Reform does not close the door on questions about older deals.

If you are unsure whether time has passed you by, this guide explains how timing fits into the picture: Is It Too Late to Claim? What to Know If Your PCP Deal Ended Years Ago

FAQs: How car finance may change after the scandal

Will car finance be safer after the scandal?

Car finance is likely to become clearer and more tightly regulated, but no system is completely risk free. Changes linked to the car finance scandal are expected to improve transparency and reduce conflicts, especially around commission and interest rates. Even so, it will still be important for buyers to understand what they are signing and to ask questions.

Does this mean mis-sold car finance will stop happening?

Reform should reduce some of the conditions that led to mis-sold car finance, but it will not eliminate risk entirely. Car finance mis-selling often happens when information is unclear or rushed. Better rules help, but informed decision-making still matters.

How will PCP agreements change in the future?

Future PCP claims discussions suggest that PCP agreements may involve clearer pricing, less interest rate discretion, and better explanations at the point of sale. That does not mean all PCP deals will look the same. It does mean buyers should expect more consistency and clearer disclosures.

Will commission still exist in car finance?

Commission may still exist, but how it works is likely to change. The focus is on reducing hidden incentives and making commission easier to understand. Fixed-fee or no-commission models are already being explored, especially in response to car finance mis-selling concerns.

Does an FCA car finance update affect older agreements?

An FCA car finance update usually focuses on future conduct and regulatory standards. It does not automatically resolve concerns about older agreements. That is why drivers with past deals may still explore car finance claims or PCP claims, depending on what happened at the time of sale.

If rules improve, do I still need to be cautious?

Yes. Even with reform, car finance remains a complex financial commitment. Interest rates, total cost, and end-of-agreement terms will still vary. Asking questions and taking time to understand the deal will always be important.

What if my agreement was taken out years ago?

Changes going forward do not close the door on older agreements. Many drivers are still reviewing deals from earlier years as part of the wider car finance scandal discussion. 

How do I know if a future agreement is fair?

A fair agreement should be clear, transparent, and properly explained. Understanding interest rates, commission, total cost, and your options at the end of the term is key. 

Looking ahead

The future of car finance in the UK is likely to involve clearer rules and closer scrutiny than before. That reflects lessons learned from the car finance scandal, not a sudden shift in consumer behaviour.

Reform can improve incentives and transparency. It cannot replace the need for informed decision-making.

For consumers, the best protection will still be understanding how a deal works before signing. Asking questions, taking time, and knowing what to look for will matter just as much after reform as they did before.

Those habits remain central to avoiding car finance mis-selling and navigating car finance with confidence in the years ahead.

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References:

1. FCA car finance update - https://www.fca.org.uk/publications/consultation-papers/cp25-27-motor-finance-consumer-redress-scheme