Supreme court to announce ruling on car finance scandal

A significant ruling could affect millions of drivers in the UK.

UK supreme court set to rule on car finance scandal

The UK Supreme Court is expected to announce its ruling regarding the £44 billion car finance scandal, potentially allowing millions of motorists to pursue claims for compensation due to mis-selling. The court's decision will focus on whether hidden commissions paid by lenders to car dealers are considered unlawful. A previous ruling by the Court of Appeal indicated such payments violated the law, suggesting that car buyers were not informed about the commissions involved in their loans. If the Supreme Court upholds this decision, it could lead to massive liabilities for banks and lend millions of drivers eligible for financial recourse. Currently, Lloyds Banking Group has set aside £1.2 billion in anticipation of compensation payouts. However, should the court favor the lenders, the number of claimants may be significantly reduced.

This upcoming ruling holds significant weight not only for motorists who may have been misled but also for the car finance industry. The implications could extend beyond individual compensation claims to affect the entire market landscape. With 90% of new vehicles financed, any liability incurred could pose serious challenges for lenders, particularly companies like Lloyds that are heavily exposed. The potential for financial compensation could empower consumers, yet lenders are advocating for a decision that maintains stability in the car finance sector. The balance between consumer protection and market equilibrium is a tightrope the court must walk.

Highlights

The repercussions of this ruling may redefine consumer rights in car financing for years to come.