Chancellor Rachel Reeves’ attempt to intervene in a landmark case over controversial car loans has been blocked by the UK’s highest court.
The Supreme Court case, which is set for April, will hear an appeal by finance firms after the Court of Appeal ruled that it was unlawful for lenders to pay a commission to a dealer without a customer’s consent.
Furthermore, it said that when customers were not informed of the arrangement they should be compensated, leading to estimates that the industry could be forced to pay out as much as £30bn.
The Treasury, which stepped in amid concerns about the possible impact on the wider car financing sector, said it respected the Supreme Court’s decision.
The vast majority of new cars, and many second-hand ones, are bought with finance agreements.
In 2021, the Financial Conduct Authority (FCA) banned deals in which the dealer received a commission from the lender, based on the interest rate charged to the customer.
It said this provided an incentive for a buyer to be charged a higher-than-necessary interest rate.
Since January, it has been considering…
