Car Finance Industry Faces Crisis After Landmark Court Ruling

A recent Appeal Court decision mandating disclosure of dealer commissions has led to a halt in car finance deals, prompting urgent talks with regulators.

• The Appeal Court ruled that car finance agreements must disclose dealer commission arrangements, affecting the entire credit industry.
• Major lenders like Close Brothers, Honda Financial Services, and Zopa have temporarily suspended new car finance deals to assess the ruling's impact.
• The Financial Conduct Authority is working with the government and financial services to address potential fallout from the decision.
• Santander UK delayed its financial results to evaluate potential liabilities, with analysts estimating costs up to £1.8 billion.
• The ruling has sparked concerns of a broader credit crunch, with significant implications for the motor finance sector and beyond.

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