Half of UK consumers who have financed a vehicle purchase within the past 12 months are now concerned about the affordability of their monthly payments, according to a new nationwide survey commissioned by ALPHERA Financial Services. When asked: “How concerned are you about whether you can afford the payments under your current vehicle finance agreement,” 10% said ‘very concerned’, while 40% said ‘somewhat concerned

The survey also indicates that unease about affordability is more widespread among younger car buyers, with 55% saying they were ‘somewhat concerned’, compared to just 16% of those aged 65 years and over. 

A significant 43% of respondents said that, when considering affordability, the dealer did not encourage them to ‘make allowances for challenging economic circumstances that might occur in the future (e.g. rising household expenditure due to inflation)’ prior to taking out the new finance agreement.


Consumers have a mix of expectations of dealers when it comes to briefing them on potential finance agreements. 66% believe the dealer has a responsibility to discuss repayment obligations, 58% to explain terms and conditions and any additional charges, and 31% say the dealer should state whether the salesperson is qualified or accredited to sell a car finance package. 

Kirk Franks, Head of National Sales at ALPHERA Financial Services, says: “These findings suggest that the cost-of-living crisis is still being keenly felt by many car buyers, with inflation, rising interest rates and higher fuel costs impacting affordability. The survey also highlights the importance of dealers ensuring, fair value and transparency – which our own Partners have been doing in line with new Consumer Duty.” 

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When they determine the affordability of a new vehicle finance agreement, the cost of monthly payments is cited most often by consumers as one of their most important considerations (86%), followed by the size of the deposit (63%), and any potential additional finance charges such as excess mileage or vehicle damage (42%). 

Updated dealer obligations under the new Consumer Duty 

ALPHERA Financial Services has been supporting its dealer Partners following the implementation of the new Consumer Duty by the Financial Conduct Authority’s (FCA) at the end of July. The Duty requires finance providers and intermediaries to deliver higher standards of consumer protection, covering matters such as affordability and transparency. 

Alongside the specific elements of guidance, ALPHERA has outlined a series of key recommendations for dealers to address the FCA’s requirements regarding ‘Culture and Governance’, including: 

  • Nominate an internal Consumer Duty Champion to monitor implementation and compliance. 
  • Introduce tiered staff training so that everyone understands their specific roles in delivering Consumer Duty. 
  • Ensure remuneration and incentive structures promote the right behaviours among staff and deliver good customer outcomes. 
  • Work out what changes are needed to monitor relevant activities, including what additional evidence might be needed to evidence compliance. 
  • Revisit policies and procedures to ensure that they are delivering good outcomes for customers. 
  • Consider any other ways in which culture and governance needs to change to support the delivery of good customer outcomes.