Car finance: Fear of delay over mis-selling payouts

Published On Nov 13, 2024, 10:19 AM

The Court of Appeal's recent decision has expanded the potential for car buyers to receive compensation for mis-sold finance agreements, particularly due to undisclosed commission payments. The Financial Conduct Authority (FCA) is considering granting car dealers additional time to address these complaints, which could delay compensation payouts. With banks likely to face compensation costs that could escalate to £16 billion, this situation has created uncertainty in the automotive finance sector.

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The FCA's potential delays in compensation could instigate further regulatory scrutiny and dissatisfaction among consumers, impacting car dealers’ reputations and financial stability. This situation could lead to a decline in consumer confidence in car financing options, affecting sales. However, since the automotive sector is a significant component of the economy, its recovery could be influenced by broader economic factors, including interest rates and consumer spending.

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