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Motor vehicle drivers

Car Finance Mis-Selling Case Concludes: Compensation for Millions of Motorists Possible

Strategic Insights

— 1 min read

The highly anticipated outcome of the car finance mis-selling case has finally been reached, with the Supreme Court set to deliver its verdict on Thursday, August 1, 2025. The case, which involved three motorists who purchased second-hand cars on finance agreements before 2021, has significant implications for the car finance industry and potentially millions of motorists who may be entitled to compensation.

Key Takeaways:

  • The Supreme Court case revolves around secret commission payments made to car dealers as part of finance arrangements, which were found to be unlawful by the Court of Appeal in October 2024.
  • The three motorists, Marcus Johnson, Andrew Wrench, and Amy Hopcraft, were not informed about the commission payments, leading to a lack of fully informed consent.
  • The Court of Appeal ruled that the lenders were liable to repay the motorists the commission, but the Supreme Court will now make a final decision on the matter.
  • The Financial Conduct Authority (FCA) has intervened in the case, stating that almost 99% of car finance agreements since 2007 involved a commission payment to a broker.
  • The FCA will confirm within six weeks of the Supreme Court judgment whether it plans to launch a redress scheme to compensate motorists.
  • If the Supreme Court sides with the claimants, many people who took out a car loan before 2021 may be due a payout, although it is difficult to say at this point how many.
  • A decision in favor of the lenders would likely limit the scope of potential payouts to motorists.

Statistics:

  • Almost 99% of car finance agreements since 2007 involved a commission payment to a broker (FCA)
  • Approximately 80% of new cars are purchased using motor finance in the UK (Mr. Gibbard)
  • 32 million car finance agreements entered into since 2007 approximately (FCA)
  • 3 motorists involved in the case: Marcus Johnson, Andrew Wrench, and Amy Hopcraft
  • £10,000 or less was the value of the second-hand cars purchased by the three motorists

Sources:

  • Martin Lewis (@MartinSLewis)
  • Financial Conduct Authority (FCA)
  • Supreme Court of the United Kingdom
  • Court of Appeal of England and Wales
  • Shoosmiths law firm (Wayne Gibbard and Mahesh Vara)

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