8:39 am, August 4, 2025
Friday’s landmark Supreme Court ruling on motor finance represented an ‘excellent outcome’ for dealers, lenders and customers.
That is according to the Finance and Leasing Association (FLA) which says the verdict has ‘restored confidence to the sector’.
The trade body is just one of several groups to issue statements on the decision, with reaction pouring in over the weekend.
As well as the FLA, there have been comments from Auto Trader, Carmoola and countless legal experts.
The responses have only ramped up since the FCA announced it is to consult on a redress scheme for customers, which could end up costing as much as £18bn.
You can read all the latest reaction right here…
‘An excellent outcome’
‘This judgment is an excellent outcome. It properly reflects the role and responsibilities of dealers, lenders and customers, and it has restored certainty and clarity to the largest point-of-sale consumer credit market in the UK.
‘In addition, it has also restored confidence to the sector, confirming that it remains a solid investable option – which in turn means the supply of affordable motor finance will continue for customers.
‘Cars are an essential part of UK life – and for many people, relying on a car means relying on motor finance. It’s a product that’s trusted and valued by our customers – just over 80% of new cars are bought on finance, as is a large percentage of used cars.’
Stephen Haddrill, Director General of the FLA
‘Consumers will be grateful to finally have some clarity’
‘With such wide-reaching implications, the automotive industry has been waiting with bated breath for the ruling, as have many consumers, and so will be grateful to finally have some clarity on what we hope will be a straightforward administration of the redress.
‘It may be some time before we know exactly how the process of disclosing commission will be enacted, but striking the right balance will be key.
‘A pragmatic solution that minimises the impact on an industry that contributes billions to our economy, but also a consumer centric approach that ensures transparency and confidence for millions of buyers.
‘It’s something that the industry has already made huge strides towards, and it’s why we’ve made it easier to see finance details on our platform and, in the process, given our 10 million monthly visitors more control and choice when exploring their options.
‘Millions of people are still browsing the 300,000 vehicles with finance options on Auto Trader every month and they can now do so with even more confidence.’
Ian Plummer, Auto Trader’s chief commercial officer
‘Industry needs to learn from the past’
‘This ruling provides legal clarity, but it should not be misread as an endorsement of how the car finance industry used to operate.
‘Too many consumers were left in the dark, overcharged, and underserved by a system that put profits over people. So even though the breadth of legal liability has been limited by this decision, the reputational damage done to the traditional car finance industry is very real.
‘Now that the legal questions have been settled, there is no reason for delay. The FCA should move quickly to enact some sort of redress scheme for discretionary commission arrangements – which are universally recognised as unfair and exploitative.
‘We’ve always believed that car finance should be simpler, clearer and more transparent. That means no hidden fees, no commission markups – just straightforward, customer-first finance.
‘The industry needs to learn from the past, make it right for those who were harmed, and rebuild trust for the future.’
Aidan Rushby, founder and CEO of finance provider, Carmoola
‘Good news for dealers and lenders’
‘Firstly, we shouldn’t lose sight of the fact that this is good news for dealers and lenders. There’s probably a collective sigh of relief in the sense that the potential exposure here is well below the largest forecasts that were being made.
‘If we’re looking at maximum payments of around £950 for claims where the Johnson-type threshold is met, that is well below the multiple thousands that claims management companies and others were bandying around.
‘Secondly, dealers and lenders are now in a position where they can start to calculate their exposure. They should be tracking down all relevant paperwork dating back to the 2007 cut-off point and examining how it aligns with the fairly high bar the court set in relation to Johnson.
‘If it clearly explained that a commission was due and they can show the level was less that 55%, they roughly know the maximum that will be payable.
‘Finally, and this is a point that has been perhaps underreported, dealers need to read their old contracts with motor finance providers to check there is no form of indemnity in place that protects the lender in the event of claims of the type now envisaged.
‘These did sometimes exist and, if enforced, may cause issues.’
Jonathan Butler, legal counsel for the Vehicle Remarketing Association
‘Remarketing still faces some instability’
‘If there is a disappointment here, it is simply that this issue looks as though it will drag on for some time yet.
‘The impact of any claims will be much less than any predicted worst-case scenario, but the FCA announcement means remarketing still faces some instability.
‘That is especially the case for potential valuation of dealer businesses who have a degree of exposure.
‘Our hope is that the shape of the redress scheme is finalised in a sensible format as soon as possible but, given the potential complications, we are not confident payments will be made to consumers any time soon. Certainly, the FCA’s 2026 prediction looks optimistic.’
Philip Nothard, insight director at Cox Automotive
‘Market also needs to return to normal functioning as soon as possible’
‘We have gone from a situation on Friday where the Supreme Court verdicts suggested the worst risks for the motor finance sector had been removed, to one on Monday morning where the FCA’s intervention has reintroduced the possibility of quite widespread reparations.
‘It means we’re going to remain in a situation of considerable uncertainty until the redress scheme is finalised, with that six-week process starting in October.
‘The risks for the fleet industry here are twofold. If banks and motor finance companies are forced to pay billions in compensation to consumers, it’ll potentially have a knock-on effect on the availability and cost of finance to fleets.
‘Also, if it becomes more difficult for used car buyers to access finance, it means there could be an impact on residual values, which is also bad news for fleets.
‘We would like to see the whole situation resolved as soon as possible. Yes, consumers whose legal rights have been ignored should be recompensed fairly but the motor finance market also needs to return to normal functioning as soon as possible.’
Paul Hollick, chair at the Association of Fleet Professionals
‘Firms should start planning now’
‘It’s already clear that the proposed redress scheme may not be restricted to discretionary commission agreement arrangements but may extend to fixed commission arrangements and go back to 2007.
‘Redress may be payable in a range of scenarios including where features such as the size of the commission and ties between lenders and dealers were not disclosed to customers.
‘Others who were involved in intermediated arrangements involving the payment of commission could also face claims from customers seeking compensation on the basis they were in a similar position and will have to consider how best to handle these.
‘Additionally, the payment of interest (the FCA is suggesting a rate in the ballpark of 3%) and the prospect of dealing with large numbers of historic claims means the FCA estimates the cost of the scheme could be as high as £18bn, although most individuals will receive less than £950.
‘Firms should start planning now for responding to the consultation and for implementing the resulting scheme at pace as well as checking that current practices are compliant.’
Katie Stephen, London co-head of the contentious financial Services group at global law firm Norton Rose Fulbright
‘Reputational damage is already done’
‘Car purchases and car financing are understandably intrinsically linked when buying new or second-hand cars.
‘But terms like “dealer contributions”, “rentals” and “guaranteed future values” have all blurred the lines between the purchase of a car and the arranging of finance, making it very difficult for consumers to understand the true nature of the two transactions.
‘This lack of transparency – brought into sharp focus with hidden commissions – has steadily eroded consumer trust, which will likely have long term implications for motor finance and wider consumer credit sectors.
‘Although the Supreme Court’s decision reverses much of the Court of Appeal’s earlier decisions, the reputational damage is already done.
‘While we await the FCA’s guidance on redress later this year, the message is clear: the car finance industry needs to be more transparent.
That means clear terms and simple structures, proper disclosure, and a renewed commitment to treating car finance for what it is – a loan between the consumer and a third-party lender.
‘The days of opaque deals must come to an end.’
Greg Huitson-Little, partner, forensic and valuation services at business advisory and accountancy firm Menzies LLP
