While consumers will welcome new transparency around commissions, there is also the prospect of a new appeal to the Supreme Court, which could theoretically overturn the latest decisions. However, even an expedited proceeding before the Supreme Court will likely take several months and, until then, the industry will have to comply with the new court ruling.

According to a letter to dealers from Honda Europe’s chief financial officer, Richard Winter, and first reported by the Car Dealer website, the judgment means dealers and car finance companies across the country are reviewing existing deals to see if they can be concluded. “Auto finance lenders in the industry will now consider whether they can execute financial transactions before changing their systems in accordance with the ruling,” says Winter.

“As a result of this judgment, Honda Finance will suspend payments until further notice while we continue to evaluate the judgment and its impact. There will be no exceptions to this.

Honda has asked the dealership for help in “managing customer expectations” after canceling new car deliveries planned for the weekend until further notice. However, the implications extend much further than the dealer courts, as the latest ruling raises the specter of potentially billions of pounds in compensation for customers with existing car finance deals. Some analysts estimate the potential damages at £16 billion, although one of the financial firms named in the appeal court ruling, Close Brothers, has indicated it will challenge the ruling. At the same time, Close Brothers’ share price suffered a major blow, as did that of Lloyds Bank, owner of Black Horse Finance, which was itself reportedly “assessing the potential impact” of the decision.

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