What the FCA’s Consumer Duty Means for Car Dealers in 2025
- staceywaller
- Jun 17
- 3 min read
The Financial Conduct Authority (FCA) introduced Consumer Duty to raise standards across the financial services industry, and the automotive sector is firmly in the spotlight in 2025. For car dealers offering finance and insurance products, Consumer Duty is no longer just guidance, it’s a mandate shaping how businesses interact with customers and deliver outcomes.
In this article, we break down what Consumer Duty means for motor retailers, why it matters in 2025, and how your dealership can stay compliant while building trust and value with customers.
What Is the FCA’s Consumer Duty?
Consumer Duty sets a higher standard of care for retail customers. It requires firms to:
Act in good faith toward customers.
Avoid foreseeable harm to customers.
Enable and support customers to pursue their financial objectives.
Underpinning these are the four outcomes that businesses must deliver:
Products and Services – must be fit for purpose and meet customer needs.
Price and Value – charges must reflect fair value, not just profitability.
Consumer Understanding – communications must be clear, not misleading.
Consumer Support – customers must be able to get help and resolve issues easily.
Why It Matters to Car Dealers in 2025
With the FCA ramping up supervisory activity in 2025, particularly around Appointed Representative (AR) networks and the motor finance sector, dealers can expect increased scrutiny.
Consumer Duty applies to all firms involved in the design, distribution, and servicing of retail financial products—this includes:
Vehicle finance (e.g. HP, PCP)
Insurance products (e.g. GAP, extended warranties)
Add-on services (e.g. service plans with a financial element)
If you’re part of an AR network, both your dealership and your principal firm must demonstrate ongoing compliance with real evidence.
Practical Implications for Your Dealership
1. Review Your Products and Services
Ensure all finance and insurance products meet genuine customer needs. Products should be targeted appropriately and not sold as a one-size-fits-all solution.
2. Assess Value – Not Just Price
The FCA expects you to assess whether the total cost of a product is proportionate to its benefit. For example, is your GAP insurance priced fairly based on the risk and coverage provided?
3. Improve Customer Communications
Pre-contract information must be clear, jargon-free, and easy to understand. This applies to both verbal explanations and written documents.
4. Strengthen Your Sales Process
Salespeople should be trained to identify vulnerable customers, provide tailored support, and avoid high-pressure tactics.
5. Evidence Your Compliance
It’s not enough to say you comply; you must prove it. This includes:
Conducting product reviews
Recording customer interactions
Monitoring sales behaviours
Documenting staff training
What’s Next for Dealers in 2025?
The FCA has made it clear: Consumer Duty is not a one-time exercise. It’s an ongoing obligation that shapes culture, processes, and customer outcomes.
Dealers that embrace this change will not only avoid regulatory risk but also win customer loyalty and enhance profitability.
Now is the time to review your approach, strengthen your governance, and partner with experts who understand your world.
How ComplianceTrak Can Help
At ComplianceTrak, we support dealer groups with a full-service solution tailored to Consumer Duty obligations:
Proactive monitoring & compliance audits
Purpose-built compliance software that streamlines processes and captures evidence
Training & competency support for sales and management teams
Fair value assessments and product governance tools
AR principal services that go beyond box-ticking
We don’t just help you meet regulatory expectations; we help you turn compliance into a competitive advantage.
If you’d like tailored support in meeting your Consumer Duty obligations, whether it’s audits, training, fair value assessments, or joining a high-performance AR network, ComplianceTrak is here to help.
Get in touch with us today to find out how we can support your dealership.
Comments