Car finance companies have been urgently meeting regulators and ministers in a desperate effort to prevent a surprise court decision last Friday leading to a collapse in transactions on the forecourts of Britain.
At least three big car finance firms have temporarily halted extending new credit in the wake of an Appeal Court judgment that went much further than expected in finding lenders liable for failing to disclose commissions.
With the vast majority of new and used car purchases financed by credit, there was “a very real risk that the industry comes to a grinding halt”, said Gary Greenwood, a finance analyst at Shore Capital.
Lenders were “scared to provide credit to customers”, he added. Close Brothers announced on Friday it had paused new business