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“Why’s that a bad thing?” I hear you ask. “Don’t those greedy lenders deserve what’s coming to them?”
Maybe. Maybe not. But regardless, the general consensus was that such a sizeable financial hit to the industry would consequently push up the cost of lending, thus increasing the price of car finance in the future, and potentially make it harder to secure a loan altogether.
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Given that nine out of 10 cars in the UK are bought on finance, disaster for the finance sector would inevitably have a very substantial negative impact on the UK car market as a whole, if the cost of financing increased. Any drop in new-car registrations would in turn diminish manufacturer profits, potentially forcing them to raise prices – not ideal when we’re already struggling to encourage buyers into more eco-friendly electric cars, which are only now beginning to get less expensive.
Financial ruin and the crippling of the automotive industry aside, there’s also the moral issue of assuming all motorists were completely naive and oblivious to commission payments being made to dealers. We motorists are (generally) more intelligent than we give ourselves credit for and would be doing ourselves a misservice if we didn’t at least secretly acknowledge that deep down we know that dealers do, of course, need to make a living and don’t entirely exist in our servitude.
Now, I must emphasise that we at Auto Express are very keen to see those who were wronged being appropriately redressed; excessive levels of commission, such as in one of the cases featured in the Supreme Court case, in which it accounted for 55 per cent of the cost of the consumer’s finance deal, are frankly obscene and should be called out.
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