Russ Mould, investment director at AJ Bell, said: “Having kicked the tyres and looked closely under the bonnet, it appears the motor finance industry has largely accepted the FCA redress scheme ahead of today’s deadline for legal challenges.
“While the scheme did increase the average expected payout compared with initial indications, it did reduce the number of eligible loans.
“The likes of Lloyds, Vanquis, Barclays and the industry’s trade body look ready to put the affair in the rearview mirror and move on.
“Getting clarity feels as important as the favourability of the arrangements proposed by the regulator.
“Of the other main players caught up in motor finance mis-selling, Close Brothers has given no indication it will challenge, and FirstRand is pulling off the road entirely as it announces plans to exit the UK motor finance space.
“Lenders will be hoping an end is in sight.
“However, campaign group Consumer Voice – representing the interests of those on the other side of the scandal – intends to challenge the scheme.
“This could leave lenders in gridlock as the implementation of the compensation scheme is delayed, with the nightmare scenario that the whole thing is overturned and existing provisions dialled up.
“This could also mean a delay in receiving payouts for households who are facing renewed inflationary pressures and could do with every penny they can get right now.”
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