1 August 2025, 19:02 | Updated: 1 August 2025, 22:10

By Dean Dunham

The Supreme Court has ruled that lenders won’t have to pay compensation to millions of motorists over car finance loans, in a judgment that has almost certainly saved the car finance industry, and probably lenders in other consumer goods markets, such as furniture and appliances.

But the ruling has already sparked a great deal of speculation and confusion – such as whether the judges bowed to political pressure and whether the ruling has killed ALL car finance claims. Here’s what you need to know:

What is the background to the ruling?
In October last year the Court of Appeal handed down a judgment in relation to three cases where the claimants each purchased cars via credit agreements. In each case, the dealership received a commission from the lender for introducing the business, which the three claimants argued they were unaware of as this was not disclosed to them – therefore making these “secret commissions”.
The Court of Appeal found that “secret commissions”, as part of finance arrangements made before 2021, were unlawful on the basis that the consumer had not provided their fully informed consent.
Following the Court of Appeal decision, the lenders involved in the case (namely Close Brothers and FirstRand Bank) lodged an appeal to the Supreme Court.

What was the legal basis for the challenge?
The court had to consider three legal issues in relation to the claimants’ claims that the car dealers should have informed them about commissions paid to them by the finance providers, namely:........

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