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Car finance judgement ‘a hard pill to swallow’

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  • Post last modified:August 1, 2025

A ruling by the UK’s most senior judges has closed down an opportunity for millions of motorists to claim compensation for motor finance mis-selling. The Supreme Court decided not to uphold an earlier ruling which found that hidden commission payments to car dealers were unlawful. However, the ruling left open the possibility of claims for compensation for large commissions that were unfair.

Marcus Johnson from Cwmbran, Torfaen, was one of the claimants in the landmark case. He described the outcome as “a bitter pill to swallow”, although was awarded just over £1,650 on the grounds that his relationship with the lender was unfair. Marcus said he was “pleased for myself, but not for the hundreds of others” who will now miss out.

Andrew Wrench has been described as “a postman with a penchant for fast cars”. He says that description “made me chuckle”. The 61-year-old is ex-forces, and also held other positions before becoming a postman, but he is proud to have been described as “the Erin Brockovich of Stoke-on-Trent”. He says he is pleased that Marcus was awarded compensation, and that there will be further claims arising from that judgement.

Jemma Caffrey, from Blackburn, bought a car in 2009 after maternity leave. Her son was born with certain medical needs, and she wanted a car to get to work and multiple doctor appointments. “I’m going to pursue my claim, but I do feel for the people it’s put a stop to,” she says. “They won’t be compensated and I find that quite sad.” Jemma feels she was “taken advantage of as a vulnerable new mum”. She trusted the car dealership to give her the best deal it could, and paid a high interest rate for her blue Corsa, which she named “Colin”.

Some dealers were paid a bigger commission if they sold a higher interest rate on the loan. These were known as discretionary commission arrangements (DCAs) and were banned by regulators in 2021. Had the three claimants won their test cases, it could have opened up lenders to compensation claims totalling about £30bn. As it stands, that bill could shrink to between £5bn and £13bn, according to accountancy and advice firm BDO.

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