Rachel Reeves Intervenes to Shield UK Car Finance Sector from Mis-Selling Payouts

Chancellor Rachel Reeves has launched a bid to protect the UK car finance sector from potentially massive compensation claims arising from a mis-selling scandal. The Treasury has warned that a ruling on undisclosed dealer commissions—found unlawful by a Court of Appeal—could lead to multibillion-pound payouts that would disrupt a market that finances around 80% of new vehicles across the country.

In a rare step, the Treasury requested intervention in the Supreme Court case scheduled for April 2025. This move is intended to balance the need for fair consumer compensation with preserving the viability of the lending sector, which is crucial for both economic stability and consumer access to motor finance. Recent reports from Reuters and the Financial Times have highlighted the high stakes of the case, while industry observers point to the strategic importance of the upcoming decision for both lenders and borrowers.