3rd April 2025 The UK’s car finance industry is facing a potential shake-up after the Supreme Court concluded its much-anticipated three-day hearing into undisclosed commission practices. The implications of this legal milestone could stretch far and wide — possibly resulting in one of the largest consumer compensation events since the PPI scandal.

What Was the Case About?

At the core of the hearing is a controversial industry practice: dealerships receiving hidden commissions from finance lenders, without customer knowledge or approval. This typically involved Personal Contract Purchase (PCP) agreements — a popular method of financing vehicles in the UK.

In October 2024, the Court of Appeal ruled that this lack of transparency was unlawful. That judgment opened the floodgates for consumer claims, with some analysts predicting that up to £44 billion could be at stake.

Supreme Court Hearing: Key Highlights

The Supreme Court hearing, held from 1st–3rd April 2025, brought some of the UK’s top lenders into the legal spotlight. Companies like Close Brothers and MotoNovo Finance pushed back against the Court of Appeal’s decision. Their core argument? That dealers were never meant to bear fiduciary responsibilities to customers under the existing laws.

Adding weight to the debate, the Financial Conduct Authority (FCA) stepped in — not to support one side over the other, but to warn of systemic risks. The FCA argued for caution, noting the potential disruption this could bring to the car finance industry.

What Happens Now?

While arguments have been made, the final chapter is still unwritten. The Supreme Court’s decision is expected within the next six months, and once it’s handed down, the FCA has committed to respond with clear guidance within six weeks.

If the ruling favours the Court of Appeal’s stance, we could see the birth of a redress scheme — possibly as monumental as the PPI pay-outs that changed financial consumer rights in the UK.

Could You Be Owed Compensation?

If you’ve financed a car using a PCP agreement — especially before January 2021, when commission disclosure became mandatory — you might be entitled to money back. Here’s what to do now:

• Find Your Paperwork: Contracts, emails, or finance agreements are essential.
• Speak to us: We can help determine if you’ve got a claim.
• Stay Informed: The legal situation is evolving, and knowledge is power.

How Courmacs Legal Can Help

Navigating a case like this can feel overwhelming. That’s why we’re committed to supporting affected clients at every stage — from initial review to claim submission and beyond.

Whether you’re discovering this issue now or already preparing for legal action, our expert team is here for you. Let us help you understand your rights, assess your eligibility, and take the next steps with confidence.