The Supreme Court is expected to deliver a verdict on the car finance scandal in April.
A car finance scandal will hit drivers with higher costs ‘for years to come’ ahead of compensation update. The Supreme Court is expected to deliver a verdict on the car finance scandal in April.
Stuart Masson, editorial director of The Car Expert, described the Supreme Court judgement as “one of the most significant legal decisions in recent financial history”.
He said: “The car finance sector is critical to the functioning of the broader car industry. Simply put, without car finance there is no car industry. So this case, and the ongoing investigation into the car finance sector, are hugely important.
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“There are potentially tens of billions of pounds at stake in this case, and regardless of who wins, the end result is likely to be that consumers will ultimately be worse off. One thing we can be fairly sure about, though, is that consumers are going to be shelling out for the cost of this for years to come.”
Masson said lenders would face compensation costs potentially reaching “tens of billions of pounds”. The expert added: “Ultimately, while consumers may secure payouts, there’s no escaping the reality that future finance deals will become more expensive as lenders seek to recoup their losses.
“We may see a shift away from dealership-arranged finance toward direct lender-consumer arrangements, with lenders cutting dealers out of the loop to ensure they are fully compliant with relevant laws.
“This Supreme Court ruling is poised to reshape the car finance landscape, with repercussions that could extend far beyond the car industry.”
The date the Supreme Court delivers its verdict, after which the FCA will confirm within six weeks if it proposes a redress scheme. If this happens, there will likely be a period of several weeks, and maybe months, where the FCA consults on the redress scheme before formally announcing it.
