Disclosure uncertainty clouds September’s sales success

At a time when bumper sales in the all-important plate-change month of September should have manufacturers and lenders buzzing with optimism, the commission disclosure crisis has once again reared its ugly head.

Legal challenges to the Financial Conduct Authority (FCA) motor finance compensation scheme will now be heard by the Upper Tribunal over the last two weeks in February, with a verdict expected in the following months.

One of the challengers, Volkswagen Financial Services UK (VWFS), has now set aside £725 million to cover the potential customer claims and redress payments related to car finance mis-selling,  while BMW’s UK finance business has increased its provision for payouts to almost £612 million, up from around £207 million a year ago.

The FCA’s industry-wide scheme may be delayed, but the regulator is advising lenders not to put their redress plans on pause.

The news came as UK new car registrations grew by 12% year-on-year in September, the market’s 10th consecutive month of growth. Further encouraging signs for the strength of the UK economy were visible in the light commercial vehicle market, a bellwether of business confidence, which recorded its sixth consecutive month of growth in September.

Private new car sales grew faster than fleet registrations, although fleet still accounted for 54% of the market. In terms of powertrains, battery-electric cars achieved a 28.3% market share, while sales of plug-in hybrids were up by 55.5% to a record 17% market share.

Fierce competition between OEMs, led by Chinese brands, has led to compelling retail offers this year, with the BVRLA recording a 19.6% growth in personal contract hire volumes during the second quarter of 2026, significantly outstripping the 4.5% increase in business car finance.

However, the traditional finance products of conditional sale and hire purchase remain the most popular routes for customers financing an EV, according to Close Brothers Motor Finance (CBMF).

Data from iVendi shows that motor finance pre-approval is driving higher uptake among retail customers. Pre-approval means a funding deal will automatically be offered by some lenders on the terms quoted by the dealer, rather than the customer having to make a formal application to confirm the proposal.

September’s new car market also shone a spotlight on the rapid and fundamental changes coursing through the industry’s veins, with the Jaecoo 7 on the top step of the podium as the best-selling model, and BYD the third best-selling manufacturer. BYD only started selling cars in the UK in 2023, while Jaecoo launched at the start of last year.

But European manufacturers dominate searches for EVs, according to Autotrader, which reported that BMW and Renault topped its EV rankings.

The SMMT fears, however, that UK manufacturers could be excluded from key ‘Made in Europe’ provisions being considered as part of the European Union’s Industrial Accelerator Act. This would deny UK-built vehicles from incentives available to EU-produced vehicles, such as support for greener corporate fleets and CO2 super credits, as well as procurement by EU Member States.

Moreover, any hope among lenders that EV residual values might improve were dealt a blow by the latest EV Barometer from Europcar Mobility Group UK, which found that cost remains the biggest barrier preventing UK motorists from switching to EVs.