{"id":93014,"date":"2026-02-18T05:52:26","date_gmt":"2026-02-18T08:52:26","guid":{"rendered":"https:\/\/automotive.einnews.com\/article\/893332670"},"modified":"2026-02-18T05:52:26","modified_gmt":"2026-02-18T08:52:26","slug":"carmakers-to-skirt-a-crash-in-a11bn-motor-finance-redress","status":"publish","type":"post","link":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/2026\/02\/18\/carmakers-to-skirt-a-crash-in-a11bn-motor-finance-redress\/","title":{"rendered":"Carmakers to skirt a crash in \u00c2\u00a311bn motor finance redress"},"content":{"rendered":"
\"Ford's
Carmakers to win reprieve in \u00a311bn. Mordant\/Bloomberg via Getty Images<\/figcaption><\/figure>\n

UK carmakers are set to curb a hefty hit in the City regulator\u2019s forthcoming redress scheme<\/a> for the motor finance scandal.<\/p>\n

Captive lenders, in-house lenders of manufacturers, are to be gra<\/span>nted some reprieve by the Financial Conduct Authority (FCA) after relentless lobbying that the scheme could hamper investment in the UK.<\/p>\n

The FCA was forced to kick back the deadline for its car finance redress scheme last year as opposition from both consumers and lenders mounted to the \u00a311bn proposal.<\/p>\n

In the proposal, the financial arms of carmakers were expected to shoulder 47 per cent of the redress owed to borrowers, bringing their bill to roughly \u00a35.2bn.<\/p>\n

A number of major automakers have set aside provisions through their financial subsidiaries in anticipation of a hit, with BMW on the hook for \u00a3200m, Mercedes-Benz \u00a3423.8m and Ford \u00a361m.<\/p>\n

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Ford has attempted to secure a meeting<\/a> with Chancellor Rachel Reeves as tensions flared over the scheme\u2019s consequences for the economy.<\/p>\n

FCA facing motor finance opposition from all sides<\/h2>\n

The motor finance row centres on the use of discretionary commission agreements (DCAs), which were \u2018secret\u2019 commission paid by lenders to car dealerships. The battle over the use of DCAs escalated to the Supreme Court last year, where the top court handed banks a lukewarm win but left the door open for a regulatory redress scheme.<\/p>\n

Carmakers have pushed back on one of the three key areas of the redress, as first reported by the FT<\/a>, arg<\/span>uing that their loans cannot be classed as \u201ctied agreements\u201d because the low rates they offer are incentives for consumers to purchase vehicles.<\/p>\n

The FCA has said: \u201cWe\u2019re carefully considering feedback and decisions on final scheme rules have not been taken.\u201d<\/p>\n

Across the board, lenders and consumers have come out swinging over the regulatory proposals.<\/p>\n

Santander UK skipped its third quarter results on October 29 after warning of \u201cuncertainty\u201d in the FCA\u2019s redress scheme.<\/a><\/p>\n

Spain\u2019s biggest lender took aim at the City watchdog as it warned of \u201cpotential implications\u201d due to the redress scheme differing in \u201cimportant respects from the Supreme Court\u2019s ruling<\/a>\u201d.<\/p>\n

Meanwhile, Charlie Nunn, the Lloyds\u2019 chief executive, said: \u201cWhen you look at the implication of what\u2019s been proposed by the FCA, it\u2019s going to potentially take 20 years of profitability off the car finance industry.\u201d<\/p>\n

On the flip side, the All-Party Parliamentary Group (APPG) on Fair Banking blasted the City watchdog<\/a> for a \u201c\u00a34.4bn gap\u201d in the proposed scheme. The group accused the regulator of being \u201cinfluenced by the profit margins of the lenders\u201d.<\/p>\n

The full details of the FCA\u2019s motor finance redress scheme are expected to be published in the first quarter of 2026.<\/p>\n

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<\/a><\/strong> <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

… WhatsApp Email Share on Email Carmakers<\/span> to win reprieve in \u00c2\u00a3 … , the financial arms of carmakers<\/span> were expected to shoulder 47 … 2bn. A number of major automakers<\/span> have set aside provisions through … a regulatory redress scheme. Carmakers<\/span> have pushed back on one …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-93014","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts\/93014","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/comments?post=93014"}],"version-history":[{"count":0,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts\/93014\/revisions"}],"wp:attachment":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/media?parent=93014"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/categories?post=93014"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/tags?post=93014"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}