Consumer Scotland launches probe into used car market

Consumer Scotland has launched a formal investigation into Scotland’s used car market in a move billed as the first step toward tougher rules on dealers, online sellers and car finance deals.

The statutory consumer body said on Tuesday that it will examine the “most harmful issues” faced by people buying second-hand cars in Scotland — including misleading sales, hidden faults, weak aftercare, and increasingly “complex finance options”.

The probe comes at a politically sensitive moment for the industry. The Financial Conduct Authority (FCA) is currently consulting on a major redress scheme for certain historic motor finance agreements, following concerns about unfair commissions and lending practices. The FCA can deal with how finance was sold, but it can’t clean up the wider used car retail sector. That job would likely fall to the Competition and Markets Authority (CMA).

Today’s move by Consumer Scotland is being seen as an attempt to lay the groundwork for exactly that kind of wider intervention.

Why this matters
For many households, a used car isn’t a luxury. It’s how they get to work, do the school run, or care for relatives. Between April and June this year alone, there were almost 160,000 used car transactions in Scotland.

But with high demand and high prices comes high risk. Second-hand vehicles are routinely among the top drivers of consumer harm in the UK, and Scotland is no exception. Advice Direct Scotland – the national consumer advice body – logged more than 19,500 complaints related to used car purchases between April 2019 and December 2024.

The most common problems reported include: cars developing faults shortly after purchase; vehicles being misdescribed or sold with incomplete/unclear histories; patchy or poor after-sales support; and difficulty getting repairs, refunds or redress when things go wrong.

On top of that, the sector itself is changing fast. More sales now happen online or “at a distance”, sometimes from dealers based elsewhere in the UK. Buyers are also being pushed toward more complicated finance packages. And as Scotland shifts toward low-emission and electric vehicles, consumers are having to make costly decisions about new technologies they may not fully understand.

“While most transactions go smoothly, thousands each year end in frustration with consumers reporting a range of issues that are hard to resolve,” he said.

“We want to ensure consumers are better protected, better informed and more confident when making such a significant purchase in future.”

The body says it will look not just at traditional forecourts, but at every way Scots buy used cars: independent dealers, franchised dealers, online-only platforms, distance sales from other parts of the UK, and cars bought on finance.

Finance in the spotlight
One area likely to attract particular scrutiny is motor finance.

There’s growing political pressure on lenders and brokers over historic commission models where dealers could earn more by arranging loans at higher interest rates. The FCA’s redress proposals aim to tackle that, but critics argue that focusing narrowly on finance misses deeper structural problems in the used car market – things like vehicle quality, warranty practices, and after-sales standards.

That’s why consumer campaigners have been calling for a more “holistic” overhaul. They argue that only a wider market review can force consistent standards across the full chain: the dealer, the finance provider, the warranty company, and any dispute resolution scheme that’s meant to pick up the pieces when the car breaks down.

Consumer Scotland’s announcement today is being read as an opening move in that direction.

Industry reaction: guarded but positive
The investigation has, notably, not been dismissed by the sector.

“As the voice of the automotive industry, the Scottish Motor Trade Association supports Consumer Scotland’s investigation as an important step toward clearer expectations, better understanding of rights, and stronger trust across the market,” Gall said.

“Consumer confidence drives our industry, and our members continually aim for excellence in how they serve customers.”

Advice Direct Scotland also welcomed the probe. Its chief executive, Andrew Bartlett, said used cars remain “one of the most common issues raised” with the service, with “thousands of consumers seeking help each year”.

He added: “We welcome the opportunity to work with Consumer Scotland on this investigation to improve outcomes, strengthen protections, and build confidence in this important market.”

What the watchdog will actually do
Consumer Scotland says the investigation will run on four main tracks:

1. Research – Independent research into how people in Scotland buy used cars, what goes wrong, and how confident they feel about their rights.
2. Analysis – Analyse complaint patterns, using data from Advice Direct Scotland and other partners, to identify where consumers are losing out most.
3. Case studies (‘deep dives’) – Detailed examination of real consumer disputes — for example, when someone buys a car on finance that later fails, and then finds themselves bounced between the dealer, the finance company, the warranty provider and an ombudsman.
4. Stakeholder engagement – Direct engagement with the industry, regulators and enforcement bodies to test the findings and shape recommendations.

Those recommendations could include calls for stronger enforcement, clearer standards for dealers, better upfront information for buyers, and faster, simpler routes to redress.

Call for evidence now open
As part of the investigation, Consumer Scotland has issued a call for information, open until 12 December 2025.

It is keen to hear the views of stakeholders from across the sector and beyond, such as:

• Consumer advice, advocacy and enforcement bodies
• Trade associations, industry representatives and those involved with dispute resolution
• Any other person or body that can assist with our evidence and recommendations in this market

In particular, the watchdog wants hard evidence on:

• Differences in standards between dealers (for example, franchised vs. independent vs. online-only)
• The root causes of consumer detriment, including misdescribed or poor-quality vehicles and murky vehicle histories
• Whether current protections and enforcement powers are actually working in practice
• How redress works when multiple parties are involved (dealer, finance, warranty, ombudsman), and where that process breaks down

Today’s announcement doesn’t create new rights overnight. Consumer Scotland doesn’t handle individual complaints, and it can’t order refunds.

But this is the first visible step toward something the Scottish market hasn’t really had before: a coordinated look at how used cars are sold, financed, warranted, and fixed – from forecourt to finance contract.