Dealers pause car deliveries after finance commission ruled unlawful

BMW and Honda are among a host of car makers which paused sales in the wake of a new court judgement which ruled that taking commissions on car financing was unlawful. The practice has been dubbed as the biggest scandal since PPI. The landmark ruling by the Court of Appeal has thrown banks, dealers and car makers into a state of disarray given it effectively bans dealers profiting from finance deals unless the buyer gives their consent.

Judges unanimously ruled to uphold their appeals, stating that “a broker could not lawfully receive a commission from a lender without obtaining the customer’s fully informed consent to the payment”. Moreover, the ruling effectively threatens the long-established agreement – which has been in practice for decades –that sees dealers receive commissions from banks or lenders for acting as a middleman for selling finance agreements on vehicles.

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