Millions of drivers were mis-sold car finance deals and are owed billions in compensation

The Supreme Court is set to deliver a judgment in the summer that could have significant implications for car finance customers across the UK.

Car finance lenders have been secretly paying car dealers commissions for selling their loans to car buyers. Consumer Voice's research indicates that 65% of car buyers trust their dealer to offer them the best deal, yet many remain unaware of the commissions influencing these arrangements.

And yet, it now appears that there are lots of different commission arrangements in place that could have resulted in consumers paying too much and with the lenders and dealers being accused of breaking the law.

The Court of Appeal's October judgment highlighted that secret commission arrangements between car dealers and lenders compromise the trust consumers place in dealers to secure the best possible finance deals.

Undisclosed commissions can lead to consumers paying higher interest rates, resulting in substantial financial detriment over the term of their loans. Consumer Voice argues that car dealers act as credit brokers when arranging finance deals and, as such, owe a legal duty to their customers to secure competitive and fair financing or they must tell the customer why they can't act impartially.

The Court of Appeal agreed with Consumer Voice but the lenders, Close Brothers and MotoNovo Finance, have challenged the ruling, which deemed it unlawful for car dealers to receive commissions from lenders without obtaining the customer's fully informed consent.

Consumer Voice is asking the Supreme Court to uphold this decision, emphasising the need for transparency and fairness in car finance agreements.

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