The court ruled that creditors are not obligated to pay compensation for financing cars

• The Supreme Court has ruled that creditors are not obligated to pay compensation for financing cars.
• The court's decision overturns a previous obligation to pay compensation to buyers.
• Some buyers may file claims under the Consumer Credit Act.

This is reported by Autocar, Autocar.

The Supreme Court of the United Kingdom upheld the ruling that creditors are not obligated to pay compensation for financing cars, which could affect millions of borrowers. This ruling follows a previous decision by the Court of Appeal.

In July of last year, the Court of Appeal recognized that "certain" commissions, which are charged by car dealers in the context of financing agreements, are illegal, especially when buyers were not informed about this at the time of signing. However, in the new ruling of the Supreme Court, announced on September 1, 2025, the judges stated that creditors do not bear responsibility for commissions that buyers did not agree to.

According to the ruling, some buyers may still seek to recover payments by filing claims under the Consumer Credit Act (CCA). The court also allowed creditors to file appeals on future cases, which effectively closes the possibility of mass compensation payments.

According to data obtained from the Financial Conduct Authority (FCA), nearly 99% of automotive financing agreements made since 2007 included commission payments to brokers. This ruling sparked significant concern among consumers and creditors, as FCA believes it could lead to a reduction in consumer rights.

FCA's investigation in 2024 revealed numerous issues in financing agreements, including undisclosed commissions that dealers received without informing buyers. The judges noted that there was no established basis for recognizing that dealers acted in the interests of buyers.

Tags: Economy/Automotive