When your customers are facing an unexpected car repair bill, the chance to spread the cost can be a lifesaver. Repair centres across the UK are now offering car repair finance solutions to let customers pay in instalments rather than a single lump sum.
With an unpredictable financial climate, these plans have become more and more popular as drivers juggle essential expenses. However, not all finance providers are created equal. Increasingly, garages, repair centres, and dealerships are choosing partners regulated by the Financial Conduct Authority (FCA). There’s a good reason for this – FCA regulation brings responsible lending and stronger customer protection.
What is FCA Regulation?
The FCA is the UK’s financial regulator, overseeing everything from banks to loan providers and car repair finance companies, too. When a finance company is FCA-regulated, it has to follow strict rules that put customers first. Responsible lending is a key part of this, and it means checking that a credit agreement is actually affordable for the customer before approval. For a car repair finance plan, an FCA-regulated provider will run proper affordability checks and clearly explain the terms. This protects people from taking on more debt than they can manage.
FCA regulation also means transparency and fair treatment.
Regulated lenders have to present all fees, charges, and conditions upfront with no hidden surprises. They’re obligated to treat customers fairly throughout the process, too. For example, if a car repair finance solution is advertised as 0% interest, it can’t sneak in extra costs elsewhere. If a customer has a complaint or runs into difficulty, a regulated provider has formal procedures to help them out.
Concerns can be escalated.
In fact, borrowers can even escalate any issues to the financial ombudsman if needed – a safety net that isn’t always provided by unregulated finance companies. All these protections give you and, by extension, your customers, confidence that the finance is safe and reputable. When your customers feel safer, and your garage or dealership earns trust, then everyone’s a winner.
What Are the Pitfalls of Unregulated Options?
Not all payment plans for repairs come under FCA oversight. Some popular buy now, pay later services in the motor trade operate outside regulated territories. These unregulated options might approve customers with minimal vetting, skipping credit history checks or affordability assessments. This might sound positive, but it can lead to loan stacking.
What is loan stacking?
Essentially, it’s when a driver ends up with multiple overlapping payment plans from different sources, and the combined debt becomes overwhelming. Without proper checks and responsible lending, someone could finance a clutch replacement at one garage and a brake fix at another, not realising the total commitment they’ve taken on. The authorities have noted the dangers of unregulated finance providers across sectors, with the FCA recommending further regulation.
There are risks around the ways that unregulated plans are sold.
Without regulation, there’s nothing to prevent aggressive sales tactics or hefty staff commissions for signing customers up. Someone might be tempted to push an unneeded finance plan just to earn a bonus, which might not be in the best interests of your customers or your business. In simple terms, the ‘quick and easy’ appeal of an unregulated finance deal can backfire.
Bank-Backed Financing Gives Extra Security
Another factor that boosts trust is when a finance provider is backed by a reputable bank. Bank-backed financing means the provider has the financial support of an established institution behind it, which adds another layer of stability. Not only does this provide peace of mind for those who own repair centres or dealerships, but it also implies the funding for customers’ payment plans is reliable and that the provider isn’t flaky.
Usually, though not always, being bank-backed goes hand-in-hand with being FCA-regulated. Take Payment Assist, for example. We’re proud to be FCA-regulated, and we’re also backed by Conister Bank, which itself works closely with the FCA to provide responsible lending solutions.
It’s No Surprise That Businesses Use FCA-Regulated Providers
With the advantages of compliance, transparency, and customer goodwill, businesses are experiencing the benefits of working with FCA-regulated finance partners. In the automotive and car repair sector, trust and reputation are everything. Offering a safe, clear payment solution is a massive bonus to your business and keeps customers coming back for the right reasons. By sticking with a regulated provider, garages also shield themselves from potential fallout that can come with unregulated schemes.
Need Bank-Backed, FCA-Regulated Car Repair Finance?
At Payment Assist, we’re dedicated to providing car repair finance you can trust. We’re already partially FCA-regulated and will be fully regulated by January 2026. With backing from Conister Bank, we help garages and dealerships offer instalment plans that put customers first. Our solutions are already in use in repair centres across the UK, assisting drivers in splitting their bulls safely and transparently.
Give your customers the power to say “yes” to necessary work, and sign up for Payment Assist today. Alternatively, get in touch with our team to find out more on 01664 503151.
FAQs
What does it mean when a finance provider is FCA-regulated?
It means that the provider has official authorisation from the Financial Conduct Authority to offer credit and must follow strict rules designed to protect customers.
How can I tell if a car repair finance provider is FCA-regulated?
FCA-authorised firms like Payment Assist will typically state it on their website or paperwork, often with an FCA registration number, which can be verified through the FCA website.
Does FCA regulation mean a finance plan is interest-free?
Not necessarily. FCA regulation covers the conduct and rules a lender must follow. This does not mean that a product has to have a 0% interest rate. You can find out more about our 0% car repair finance options here.
