Britain's motor finance industry is in crisis – with banks bracing for billions in payouts

Published On Nov 14, 2024, 1:12 AM

The UK motor finance industry is facing a crisis following a recent court ruling that deemed it unlawful for car dealers to receive commission bonuses from banks without customer consent. This has led to fears of substantial compensation payouts similar to the UK's previous PPI scandal that cost banks over £50 billion. The industry is left uncertain, with banks potentially needing to set aside billions to address this. Analysts suggest that if the ruling stands, it could lead to significant financial repercussions, with estimates of the impact reaching up to £28 billion, and a risk of some banks pulling out of the motor finance market entirely.