Treasury steps in to protect car loan firms' payouts
Published On Jan 21, 2025, 1:51 PM
The UK government has intervened in a major potential compensation issue concerning car loan firms due to concerns that the payments could significantly harm the motor finance market. Recent court rulings have indicated that lenders must compensate customers who were not informed of the commissions charged for car loans. This intervention aims to stabilize the market after estimates suggested compensation costs could reach up to £30 billion, reminiscent of the previous payment protection insurance scandal. Stock prices of key auto loan firms like Lloyds Banking Group and Close Brothers rose following the news of the governmental actions, suggesting some market optimism despite the ongoing regulatory pressures.
Stock Forecasts
CBRE
Positive
Close Brothers has seen a significant stock price jump following the government's intervention, which suggests that investor confidence may be returning as fears of multi-billion compensation payouts are alleviated. If the market stabilizes and shares continue to perform well, further growth is likely as operational risks diminish in the near-term.