Auto Amazon Links: No products found. Blocked by captcha.
A highly anticipated decision by the UK’s top judges is expected to set a precedent that could potentially lead to millions of car owners seeking compensation for mis-selling of motor finance agreements. The Supreme Court is poised to rule on whether or not to uphold a previous judgment that deemed hidden commission payments to car dealers as illegal. Given that approximately 9 in 10 new cars are financed, the outcome of this ruling could result in a substantial sum being sought by individuals who have purchased cars over an extended period.
Despite assertions by the industry that no wrongdoing occurred, there is a sense of ambiguity looming until the Supreme Court delivers its final decision. Several car buyers are already in line for compensatory payouts, with major lenders like Lloyds having allocated significant funds in anticipation of a potential wave of claims, reminiscent of the Payment Protection Insurance (PPI) uproar. The automotive finance sector stands as the second-largest lender to UK consumers, trailing only mortgages in terms of borrowings.
The vast majority of new and used car purchases involve financing arrangements, where buyers make a down payment, secure a loan for the remaining amount, and drive away in their new vehicle. Unbeknownst to many consumers, dealers were receiving commissions from lenders for these finance deals, with some dealers receiving higher commissions based on the interest rates secured. These discretionary commission arrangements were outlawed by regulators in 2021, prompting scrutiny of past agreements that may have exploited unsuspecting buyers.
Amid the legal wrangling, questions around the broader implications of the case have surfaced. The economic fallout of potential compensation payouts has raised concerns within the industry and government, with calls for clarity on the rules governing future practices. The Finance and Leasing Association, representing the motor finance sector, is eager for a clear directive from the Supreme Court for future compliance. While the regulatory landscape may shift post-decision, a critical balance between consumer redress and market stability is sought to maintain investor confidence and economic growth
Read the full article from The BBC here: Read More
Auto Amazon Links: No products found. Blocked by captcha.