The car finance scandal already looks like PPI 2.0… but with an even bigger bill. Millions of motorists could soon be entitled to compensation on their hire purchase agreements, which could cost the industry an eye-watering £44bn to put right, compared with the £38bn spent on Britain’s costliest and longest-running consumer scandal, into payment protection insurance.
All eyes are now on the Supreme Court, which is preparing to deliver a judgment over commissions paid to car dealers for fixing up finance agreements. The overwhelming majority of consumers take out loans when purchasing vehicles. A percentage of the interest typically goes to the dealer when they arrange these. Those commissions can be very substantial.
