Buy Now Pay Later finance comes under the spotlight today as it becomes a regulated finance product under the Financial Conduct Authority (FCA).
The form of finance is used widely across all sectors. In automotive it is used by carmakers, dealers and garages under branded and white label products to help customers ‘spread the load’ and pay for servicing and repairs with regular payments, without interest, over time.
Across all sector for some it may have led to spending more than they intended to. Citizens Advice has campaigned for regulation of the products.
In 2025, across all sectors, it helped 7,468 people with a BNPL issue. This is an increase of 35% compared with 2024, and is more than four times the amount of people helped in the whole of 2022.
Marcus Gregoryu, CEO of Payment Assist welcomed the changes being made. “The move, which sees deferred payment credit officially brought into full FCA regulation, will provide consumers with better support, while necessitating deeper and more comprehensive affordability checks from lenders.
“Initially proposed back in 2025, the rules require lenders to provide customers with clear information before taking out a BNPL product. This includes detailing their agreement upfront by specifying repayment amounts, repayment dates and what happens if they were to fall behind.
“Elsewhere, more robust affordability checks will ensure that consumers can actually repay what they intend to borrow, while lenders are expected to provide necessary support when customers fall into financial difficulty. Finally, should there be unresolvable issues, consumers will be able to take their case to the Financial Ombudsman Service (FOS).
Jonathan Westwood, general counsel & chief compliance officer at Bumper, said: Today, Buy Now Pay Later products come under full FCA regulation for the first time.
“For automotive aftersales – where flexible payment has become an established way for drivers to manage the cost of repairs and servicing – it is a change worth marking: from today, those products carry formal regulatory protections of their own.
“It should be noted that the regulatory obligations fall on the lender. Indeed, for responsible providers like Bumper, the new rules confirm and formalise existing best practice rather than requiring significant change.
“Having engaged with HM Treasury and the FCA throughout the development of these rules, we see today as a welcome milestone. The regime provides proportionate protection for the way drivers actually use credit in aftersales: considered, low-frequency decisions about important work.”
