Could The Car You Bought Years Ago Soon Pay You Back?
Millions of UK drivers are asking that very question as a landmark Supreme Court ruling on mis-sold motor finance looms. Here’s a plain-English look at what’s happening, why it matters, and what you can do next.
Why Are So Many Drivers Suddenly Worried About Their Old Car Loans?
A new survey found that 45% of UK adults, about 23 million people, believe they may be owed compensation for a car loan taken out between 2007 and 2021. That puts this scandal on track to rival the infamous PPI fallout.
What Is a “Secret Commission”?
Many car dealers earned undisclosed commissions from lenders by arranging car loans with inflated interest rates. The more you paid, the more they earned, and most buyers had no idea it was happening. A 2024 Court of Appeal ruling found this practice unlawful.
How Much Money Is At Stake?
Estimates suggest lenders may owe as much as £44 billion in redress. Major banks like Barclays, Lloyds, Santander UK, and Close Brothers are bracing for the financial fallout if the courts uphold the earlier ruling.
Why the Supreme Court Ruling Matters
- Due any day now, the Supreme Court’s decision will:
- Confirm whether these secret commissions were indeed unlawful.
- Decide how far back claims can go.
- Determine if a nationwide redress scheme can proceed.
If the ruling favours consumers, expect a flood of claims, and another major hit to the UK’s banking sector.
Missing Records Could Complicate Claims
There’s one big challenge: many banks have deleted old customer data after six years. That could make proving claims more difficult for loans taken before 2015 — unless the FCA mandates broader evidence rules.
What You Can Do Now
- Check your car finance paperwork (PCP, hire purchase, or leasing deals between 2007 and 2021).
- Look for missing or vague commission details in the contract.
- Submit a complaint to your lender now. Remember that it’s free.
- Escalate to the Financial Ombudsman if you don’t get a reply in 8 weeks.
- Avoid high-fee claims firms because many cases can be handled yourself or with low-cost help.
Why It Matters For The UK Economy
A redress scheme this large could:
- Hit bank profits hard in 2025.
- Lead to stricter lending rules.
- Reduce available credit, especially at a time of slow economic recovery.
Final Thoughts
If you bought a car on finance anytime in the past 15 years, this story could affect you. Keep an eye on the Supreme Court decision; it may unlock compensation and force long-overdue changes in how car finance is sold in the UK.
And if you’re shopping for a car now? Ask questions. Insist on transparency. Because what you don’t see on the contract could cost you, or maybe pay you back.
