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Major car brands freeze sales after shocking court decision hits finance deals

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Car giants Honda and BMW had to pause vehicle sales due to unexpected court ruling about hidden fees in finance deals. Legal experts suggest this might lead to massive payouts that could exceed the PPI scandal

Last week a court-ruling shook the car industry forcing major brands to hit the breaks on sales (which caused quite a stir in the auto-finance world)

Honda and BMW stopped delivering cars to buyers after judges said the way dealers got paid wasnt legal: this ruling changed everything that car-sellers did for many years. Both companies started selling again but with different rules.

The whole mess started when the Court of Appeals said that hidden fees in car-loans are against the law — this was a huge shock because everyone thought these deals were fine before. The ruling made banks car-makers and dealers super-worried about whats coming next

This could be a potential market failure situation. You would be looking at a situation where no one would want to provide car finance – or be able to

Senior car industry executive

Legal experts think this might be a big-time problem; Darren Smith from Courmacs Legal says there could be like 30-40 million claims. His company already has 1.4 million people ready to ask for their money back. The math is simple: if you bought a car with a finance deal in the last 20 years you might get some cash back

  • Car dealers must now tell buyers about all fees
  • Many finance companies stopped making new deals
  • Some dealers changed their payment systems
  • Banks are worried about possible law-suits

The Supreme Court might look at this case again but theres only a small chance theyll change anything. Right now car-sellers are trying to find new ways to work with these rules — its either adapt or face big problems

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