2025’s key diary dates for the auto finance sector

Last year’s conveyor belt of regulatory challenges and legal judgments led to a tumultuous twelve months for the motor finance sector, starting with the Financial Conduct Authority (FCA) review of historical discretionary commission payments and culminating in a landmark Court of Appeal ruling which upended the existing regulations around the disclosure of commission payments, and stated that intermediaries had a fiduciary duty to demonstrate they were acting in the customer’s best interests.

So what developments are in prospect in 2025?

April 1 is the most notable date, as this has been set as the day for the Supreme Court to hear an appeal against the October Court of Appeal findings. The speed at which this has been granted is welcome news, with Adrian Dally, Director of Motor Finance at the FLA commenting: “Permission to appeal is very good news indeed. The expedited process will give the motor finance sector the certainty it needs.”

The hearing is listed to last three days, and will consider Wrench vs FirstRand Bank (trading as MotoNovo), along with the two linked cases, Hopcraft and another vs Close Brothers, and Johnson vs FirstRand.

In all three cases, the Court of Appeal judges found there was a conflict of interest and no informed consent by the consumer to the receipt of the commission. In the case involving Hopcraft, the judges said there is no dispute that the commission was kept secret, while in the other two instances the claimant said they did not know and was not told that a commission was to be paid.

Lenders and intermediaries were thrown into turmoil by the ruling, which suggested commission disclosures should go beyond what was agreed to meet the legal and regulatory requirements of the time. Further confusion has arisen because the judgement found that a fiduciary duty applies to providers of credit at point of sale, which has material implications for the motor finance industry and the broader consumer finance sectors. Both the FCA and UK Finance are named as parties involved in April’s Supreme Court hearing.

May 2025 is the date the FCA has indicated it plans to set out next steps in its review of discretionary commission arrangements (DCAs), which began in January 2024. The regulator says it also hopes to provide an update on motor finance non-DCA commission complaints at the same time, but notes that “given the Court of Appeal’s judgment affects both types of complaint, what we can say in May will depend on the progress of the appeal to the Supreme Court and the timing and nature of any decision.”

In the meantime, the FCA has implemented a pause in the usual regulations around complaints handling, in order to ensure an orderly market. Firms now have until 4 December 2025 to provide a final response to complaints regarding non-DCAs, in line with the extension the regulator previously provided for complaints involving DCAs. 

July 29, 2026 is the final date or 15 months from the date of their final response letter from the firm for consumers to refer a non-DCA complaint to the Financial Ombudsman (instead of the usual 6 months).

The FCA has said: “Following feedback received during our consultation, we have confirmed the complaint handling extension will cover motor leasing, as well as motor finance credit agreements. The Court of Appeal’s judgment did not involve motor leasing agreements. However, consumers also use leasing to access motor vehicles, and it is important that consumers using similar products for similar purposes are treated in the same way.” 

In December 2024, Barclays lost in its bid to win a judicial review of a decision by the Financial Ombudsman Service, which found that a customer had been unfairly charged a commission of over £1,300 on a car loan facilitated by Barclays Partner Finance in 2018. Similar to the three cases brought to the Court of Appeal, this centred on the apparent lack of information and informed consent from customers around commission payments.

Barclays has now been granted permission to appeal to the Court of Appeal in recognition of the impact of this reasoning on the outcome of other cases, but no date has so far been given for this appeal.

“Throughout the year, AFC will be sharing expertise and insight from our panel of experts, via our webinars and conference sessions, so look out for our in-depth responses to developments in what is set to be another challenging twelve months.”