FCA payouts spark fears of rising car finance costs
Research from digital car finance lender Carmoola reveals growing concern among drivers that the cost of car finance could increase in the future, following the Financial Conduct Authority’s motor finance redress scheme.
The scheme, which will see firms compensate customers who were not properly informed about commission arrangements, is expected to cover around 12.1 million agreements, with total payouts of approximately £7.5bn.
But while the focus has largely been on compensation, many drivers are already looking ahead. Carmoola’s research shows a significant proportion believe the cost of car finance could rise as lenders absorb the impact of redress, with many concerned this could become a feature of pricing going forward.
With 73% of drivers saying access to fair and affordable finance is crucial to owning a car, the findings highlight growing anxiety about what the future of car finance could look like.
Aidan Rushby, CEO and founder of Carmoola, said: “Drivers are already thinking about what this means for them next, not just what they might get back.
There is a real concern among drivers that the cost of redress could be passed on, and that higher prices could become a feature of car finance going forward. That is understandably worrying for people who rely on finance to afford a car.
But that should not be the outcome
The purpose of the scheme is to address past issues and improve transparency, not to make finance more expensive or harder to access in the future. A competitive market should continue to deliver fair and affordable options for drivers.
What matters now is maintaining that balance.
People want things put right, but they also need confidence that they will still be able to afford a car. If costs rise unnecessarily, that confidence will be undermined.
This is an opportunity for the industry to reset. Car finance should be simple to understand, transparent in how it works, and fair in how it treats people. If that is delivered properly, trust can be rebuilt without pricing people out of the market.”
*The research was commissioned by Carmoola and conducted by 3Gem, among a sample of 2,000 nationally representative drivers aged 18+, who were all drivers. The data was collected between 6 and 10 November 2025.