It’s no secret that the Irish car finance market is changing fast. Between shifting regulations, wobbly EV values, and a cost-of-living squeeze that won’t let up, brokers in Ireland have a lot to keep an eye on in 2025.
Whether you’re working with main dealers, independent garages, or directly with drivers, now’s the time to future-proof your offering. We’ve taken a look at the five biggest risks facing car finance brokers in Ireland right now, and some practical ways to get ahead of them.
Regulations Are Tightening – And the UK’s Ahead of the Curve
Electric Vehicles: Great for the Planet, Tricky for Your Risk Models
The Affordability Squeeze is Real
Digital Expectations Have Leapt Ahead
1. Regulations Are Tightening – And the UK’s Ahead of the Curve
If you’ve been keeping an eye on what’s happening across the water, you’ll know that UK finance brokers and lenders are facing major regulatory heat. The FCA’s Consumer Duty rules are already shaking things up in the UK car finance world, with ongoing investigations into commission models, transparency, and fair treatment of customers.
While we haven’t seen that level of intervention here in Ireland yet, history tells us that what’s happening in the UK often makes its way over here… and usually sooner than you’d think. The Central Bank has already signalled a tougher stance on consumer protection and oversight in 2025.
What You Can Do:
- Start reviewing how you present finance options. Are they easy to understand?
- Make sure your documentation is squeaky clean and crystal clear.
- Work with lenders (like us at LM Operations) who prioritise transparency and fair treatment. That way, you’re always aligned with best practices.
2. Electric Vehicles: Great for the Planet, Tricky for Your Risk Models
EVs are everywhere in the headlines. But let’s be honest, they’re not always flying off the forecourts. One of the biggest headaches? Residual values.
In Ireland, we’ve seen a surge in second-hand EV supply, but prices are dropping quicker than expected. The UK has already seen used EV values tumble by nearly 50% in two years, and we’re not far behind. That kind of volatility makes it harder to price balloon payments or structure PCPs that protect you and the customer.
What You Can Do:
- Build in more conservative assumptions on EV resale values.
- Offer finance options that share depreciation risk, like guaranteed minimum future value (GMFV) plans.
- Stay close to market trends, don’t base future models on last year’s optimism.
3. The Affordability Squeeze is Real
Let’s talk money. Wages in Ireland aren’t keeping pace with inflation, and more drivers are struggling to fund big-ticket purchases. The average Irish car buyer is now spending around €16,550 on a car, but younger drivers? They’re hovering just under €10k. Financing is essential… but so is affordability.
Buyers are wary of long-term debt and big monthly outgoings. Plus, with interest rates still higher than what we were used to in the pre-COVID years, it’s not getting any easier.
What You Can Do:
- Offer flexible term lengths, with clear info on what it really costs long-term.
- Help your customers understand how EVs can save them money in the long run (where true).
- Highlight options like split deposits, deferred starts, or step payments to help them get started.
4. Digital Expectations Have Leapt Forward
Irish buyers are doing their research online; that’s a given. But now they expect more than just a listings page. They want instant finance quotes, live chat with a real person, and clear monthly costs up front — all on their phone.
The problem? Many brokers still rely on old-school processes that leave customers clicking away before you even get a lead.
What You Can Do:
- Invest in better online experiences: real-time quotes, soft credit checks, quick approval paths.
- Keep things mobile-friendly. If a 25-year-old can’t complete half the journey on their phone, you’ve lost them.
5. Uncertainty Around Used Car Values is Here to Stay
This one’s not just about EVs. With used car prices yo-yoing after the pandemic highs, predicting what a car will be worth in three or four years is anyone’s guess. That’s risky business for brokers offering PCP or lease agreements — get your end-value too high, and you’re facing unhappy customers and write-downs.
What You Can Do:
- Regularly update your valuation models and work with lenders who adjust quickly to market shifts.
- Be upfront with customers about future values and exit routes — no one likes a nasty surprise.
- Use conservative residuals and avoid locking yourself (or your customers) into over-optimistic deals.
In Summary
2025 is shaping up to be a make-or-break year for brokers. Between regulatory noise, EV growing pains, and affordability challenges, there’s a lot to juggle, but also plenty of opportunity.
The good news? You don’t have to face it alone.
Partner with LM Operations
At LM Operations, we work alongside brokers across Ireland to build finance solutions that actually work, for your customers and your business. From fair, transparent lending to digital tools that streamline the whole process, we’ve got your back.
Let’s shape a better future for car finance, together. Become a partner today.