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UK drivers could miss out on £30BILLION in compensation if bungling Rachel Reeves stops payouts for car finance scandal

BRITISH motorists could lose up to £30 billion in compensation after Chancellor Rachel Reeves’ recent intervention.

The Chancellor’s move will look to protect banks from mis-selling claims linked to car finance – with the case reaching The Supreme Court.

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Brit drivers could miss out on £30 billion in compensation after Chancellor Rachel Reeves’ intervention[/caption]
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Recent data suggests some 80% of vehicles in the UK are bought through finance[/caption]

The allegations state that car dealers received secret commissions from lenders, leading to higher interest rates on loans.

But according to the Daily Mail, Treasury officials argue that the ruling could cause economic harm and impact motor finance availability.

Two lenders, FirstRand Bank and Close Brothers, are to appeal the judgement, while other major lenders like Lloyds and Santander are also potentially affected.

Consumer groups have been urging drivers to send complaints to the Financial Ombudsman, but concerns have grown over a potential consumer free-for-all leading to market destabilisation.

Now, Reeves is being accused of giving finance firms a “get out of jail free card,” according to insiders.

Her move could harm consumer interests and market stability, while the ruling has already caused chaos in the car market, with dealerships pausing deliveries to rewrite contracts.

Analysts warn that the government’s intervention risks setting a dangerous precedent, while consumer champion Martin Lewis questions the validity of retrospective claims.

Recent data suggests some 80% of vehicles in the UK are bought through finance, with two million cars purchased on finance in 2024 and seven million currently under finance agreements.

Many of these agreements belong to people on low incomes who cannot afford to buy a car outright.

Treasury figures are concerned that upholding the ruling would lead to lenders exiting the market, reducing finance options for consumers and potentially increasing costs.

'It's the next PPI' - Top lawyer claims Brits due 'billions' over dodgy car finance deals... here's how to make your claim
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The Financial Conduct Authority previously required dealers to disclose commission payments only if asked, but the October ruling has forced a hurried rewriting of contracts to explicitly state commission amounts.

The Supreme Court appeal, set for April, will be crucial in determining the future of compensation and the stability of the motor finance market.

Financial services firm Moody’s has estimated that if the ruling stands, the payout bill could reach as high as £30 billion.

What is the FCA investigating and who is eligible for compensation?

By Jacob Jaffa, Motors Reporter

What is being investigated?

The FCA announced in January that it would investigate allegations of “widespread misconduct” related to discretionary commission agreements (DCAs) on car loans.

When you buy a car on finance, you are effectively loaned the value of the car while you pay it off.

These loans have interest payments charged on top of them and are often organised on behalf of lenders by brokers – usually the finance arm of a dealership.

These brokers earn money in the form of commission – a percentage of the interest payments on the loan.

DCAs allowed brokers to, to a certain extent, increase the interest rate on a loan, which in turn increased the amount of commission they received.

The practice was banned by the FCA in 2021.

Who is eligible for compensation?

The FCA estimates that around 40% of car deals may have been affected before 2021.

There are two criteria you must meet to have a chance at receiving compensation.

First, you must be complaining in relation to a finance deal on a motor vehicle (including cars, vans, motorbikes and motorhomes) that was agreed before January 28 2021.

Second, you must have bought the vehicle through a mechanism like Personal Contract Purchase (PCP) or Hire Purchase (HP), which make up the majority of finance deals and mean you own the vehicle at the end of the agreement.

Drivers who leased a car through something like a Personal Contract Hire, where you give the car back at the end of the lease, are not eligible.

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Ревматолог: "15 апреля 2024 в г.Колумбус запущена квота"

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  • ИП Попов А.П.
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Ревматолог: "15 апреля 2024 в г.Колумбус запущена квота"

Каждый человек с больными суставами имеет право получить...


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  • ИП Попов А.П.
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Ревматолог: "15 апреля 2024 в г.Колумбус запущена квота"

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