Car Finance in the Spotlight: What Buyers Should Know in 2025

In 2025, car finance continues to be one of the most common methods for purchasing a vehicle in the UK. From flexible monthly repayments to end-of-term options, it offers clear advantages—especially for those who want access to newer, more reliable vehicles without large upfront costs.

But as more consumers become aware of their rights, and past finance practices come under closer examination, car finance is firmly in the spotlight. Issues surrounding transparency, affordability, and fairness are being revisited by regulators and drivers alike. Whether you’re entering a new agreement this year or reviewing an old one, understanding the ins and outs of car finance has never been more important.

Why Car Finance Is Under Scrutiny

At its core, car finance should be straightforward. You borrow money or lease a vehicle, make regular payments, and follow the agreed terms. However, many drivers have found that their agreements contained unexpected charges, complex clauses, or conditions they were never fully made aware of.

In particular, concerns have grown around how certain finance products were sold between 2007 and 2021—especially PCP agreements, which make up a large portion of vehicle finance. The rise in PCP claims reflects this, as thousands of consumers are now questioning whether their contracts were explained properly and whether critical information, such as commission incentives, was disclosed.

The Main Types of Car Finance Explained

If you’re planning to finance a vehicle in 2025, you’ll likely encounter several options. Each comes with its own structure and level of responsibility:

• Personal Contract Purchase (PCP): You pay monthly instalments with the option to buy, return, or part-exchange the car at the end. Final payments can be significant.
• Hire Purchase (HP): After a deposit and regular monthly payments, the car becomes yours once the agreement ends.
• Personal loans: Taken from a separate lender, these allow you to buy the car outright and own it immediately.
• Leasing (PCH): You rent the vehicle for a fixed period, usually without an option to buy.

Each option suits different needs, but they all require a solid understanding of the terms—especially regarding what happens if you want to end the agreement early or exceed mileage limits.

PCP Claims: What You Should Know in 2025

Of all the finance types, PCP agreements have faced the most scrutiny in recent years. These plans offer lower monthly payments and flexibility at the end, but often come with conditions that aren’t clearly explained at the point of sale.

Between 2007 and 2021, many customers signed up for PCP deals without being told about the full cost of ownership, balloon payments, or commission structures influencing the lender’s recommendations. As a result, a significant number of PCP claims have been filed by drivers seeking compensation for what they now believe were mis-sold agreements.

If you took out a PCP deal during that period and now feel the key details weren’t made clear, it may be worth revisiting your contract. Even if you’ve already completed the agreement, you could still be entitled to raise a claim.

Spotting the Red Flags in 2025

Even today, finance agreements can contain clauses that are easy to overlook. Before signing anything, keep an eye out for the following:

• Lack of clarity about final payments: Are you expected to pay a lump sum to own the vehicle?
• Mileage restrictions: What are the penalties for going over your limit?
• Excessive wear and tear fees: What qualifies as acceptable condition upon return?
• Undisclosed commission: Has the person arranging the finance declared whether they receive commission for recommending a specific product?

If these aspects aren’t explained clearly, don’t be afraid to ask questions or walk away. Transparency should be a minimum standard, not a luxury.

The Rise of Car Finance Claims

Another area under close attention involves Black Horse finance claims. These claims have emerged as a result of consumers challenging the clarity and fairness of their finance arrangements—particularly where brokers or dealerships may have received undisclosed commission or pushed certain products over others.

People making Black Horse finance claims often argue they were not given enough information to make an informed decision, or that the contract terms didn’t reflect what was promised during the sales process. While not all agreements are problematic, these cases have highlighted the importance of thoroughly reviewing the terms before agreeing to anything.

If your finance deal involved one of the providers currently facing scrutiny and you feel you were not properly informed, it may be worth exploring your rights.

Tips for Financing a Car Safely in 2025

To protect yourself from entering into an unsuitable agreement, follow these best practices:

• Ask direct questions – Don’t assume everything is included or fair. Get clarity on every charge and condition.
• Read the full contract – Pay special attention to the small print and clauses about termination, mileage, and ownership.
• Compare products – Make sure you’re shown all available options, not just the one that benefits the seller.
• Request commission disclosure – You have the right to know if the person advising you is being paid to recommend a specific finance deal.
• Keep your paperwork – Hold onto every document, email, and record of what was explained at the time of sale.

What If You’ve Already Signed?

If you’ve already entered into a finance agreement and now suspect it may have been mis-sold, don’t panic. You’re not alone. Many people are only just realising that their contracts from years past—especially those between 2007 and 2021—might not have been fair.

If your car finance agreement was unclear or failed to include important information, you might have grounds to pursue a PCP claim or look into whether you qualify for lender-specific finance claim. These avenues exist to support consumers who believe they were treated unfairly, even if the finance deal has already been completed.

Final Thoughts

In 2025, the car finance industry finds itself at a crossroads. With increasing scrutiny, more informed buyers, and a growing number of claims being made, transparency and fairness are no longer negotiable.

Whether you’re buying a family car, replacing a work vehicle, or simply exploring your options, make sure you understand what you’re agreeing to—and don’t hesitate to speak up if something doesn’t add up.

From PCP claims involving agreements made between 2007 and 2021 to Black Horse finance claims challenging historical practices, the message is clear: car finance should empower consumers, not confuse or mislead them.

Stay informed, read the fine print, and take your time. Because when it comes to car finance, the right decision starts with the right information.