“Lenders will be relieved that they’ve avoided having to potentially pay out millions of pounds in compensation to motorists who hadn’t been fully informed about the levels of commission being paid to their dealers,” says Danni Hewson, head of financial analysis at AJ Bell.
“Most people buying a car in the UK take out finance and most won’t have scrutinised the small print before pocketing the keys and driving off the forecourt and it was this lack of transparency which formed the basis for the original court case.
“But the Supreme Court was clear that an earlier ruling in favour of motorists was wrong, that the commission paid to dealers was neither a bribe nor could anyone have expected a dealer not to have a commercial interest in selling cars.
“But the ruling did potentially leave the door ajar on future cases after it upheld one of the claims relating to the relationship between a motorist, Mr Johnson and his lender.
“It also doesn’t bring an end to the long running saga as another case related to discretionary commission agreements is still being dealt with by the Financial Conduct Authority and a redress scheme could be created within months.
“There will be plenty of motorists who had been hoping to pocket a few extra quid off the back of the ruling, who will be disappointed, but a different outcome could have had huge implications for the economy as a whole.
“People rely on finance to enable them to afford homes and cars, big ticket items today that they would otherwise have to wait years or even decades to afford.
“That finance could have become harder to get hold of and more expensive which is why the Treasury had tried to intervene.
“But the episode has raised big questions about how we buy cars and what needs to be done to make the experience better for customers.”
