Shoosmiths report reveals growing trust gap in motor finance

A new report from Shoosmiths has found that while most motor finance customers remain satisfied with their agreements, confidence in the sector has weakened amid growing scrutiny of transparency, commissions and historic lending practices.

The report, produced in partnership with FTI Consulting and based on a survey of 2,000 UK vehicle owners, suggests the motor finance industry is facing a significant challenge as customer perceptions become increasingly disconnected from their personal experiences.

According to the research, nine in 10 motorists said their finance agreement met their needs and financial circumstances. However, 40% of respondents reported that their trust in motor finance providers has declined over the past three years.

The findings come at a time of heightened attention on the sector following ongoing regulatory and legal developments relating to motor finance commissions.

The report found that 41% of consumers now believe their finance agreement was unfair in hindsight, despite many expressing satisfaction with their original experience. A significant proportion of respondents said they had either already sought compensation or were considering doing so.

Transparency emerged as a key theme throughout the research. Consumers cited concerns around the disclosure of commissions, fees and key terms as major factors influencing their views of fairness.

Media coverage is also having a notable impact on public perception. More than a third of respondents said recent reporting on motor finance issues had reduced their trust in providers.

Despite those concerns, the report suggests consumers are not turning away from motor finance. Instead, they are becoming more engaged in the purchasing process. Nearly three-quarters (73%) said they would review finance terms more closely in future, while 60% said they would be more likely to shop around before entering into an agreement.

Shoosmiths said the findings point to a shift in consumer expectations, with transparency increasingly becoming a differentiator for lenders and finance providers. The report argues that clearer pricing, fuller disclosure of commissions and simpler product structures will be critical to rebuilding trust and maintaining long-term customer relationships.

The findings suggest that while motor finance remains a widely used and valued route to vehicle ownership, providers face growing pressure to demonstrate fairness and openness as consumer scrutiny of the sector intensifies.