Repercussions from the Supreme Court’s recent motor finance case judgement could affect fleets, according to the Association of Fleet Professionals (AFP).
The court ruled on Friday in a highly-publicised case about alleged unfairness regarding commissions to car dealers from lenders, partially overturning a previous Court of Appeal decision which found against the finance companies.
Following the Supreme Court’s judgement, which found in favour of one affected consumer, the Financial Conduct Authority (FCA) said it would be consulting on a motor finance compensation scheme for affected consumers.
The FCA said its consultation would launch by early October, with the first payments expected in 2026. It said the total cost of compensation for the industry could be between £9 billion and £18 billion.
Although the motor finance case and proposed compensation scheme relate to consumers, AFP chair Paul Hollick said fleets could still be affected by resulting issues.
He said: “The risks for the fleet industry here are twofold. If banks and motor finance companies are forced to pay billions in compensation to consumers, it’ll potentially have a knock-on effect on the availability and cost of finance to fleets.
“Also, if it becomes more difficult for used car buyers to access finance, it means there could be an impact on residual values, which is also bad news for fleets.
“We’d like to see the whole situation resolved as soon as possible. Yes, consumers whose legal rights have been ignored should be recompensed fairly but the motor finance market also needs to return to normal functioning as soon as possible.”
