- CHANCELLOR TO OVERRULE SUPREME COURT ON CAR FINANCE?
- PETER WADDELL OFFERED €1.1m TO SETTLE CLAIM
- STELLANTIS TO MISS ECG DUE TO EVS BUILT IN POLAND?
- SALES STAFF ‘CRUCIAL’ IN DRIVING CUSTOMER LOYALTY
- WEEK AHEAD: DCA car finance ruling
- RENTS UP 21% IN THREE YEARS
- CONSUMERS FACE FEE FOR QUITTING CAR FINANCE CLAIMS
- ASBURY ACQUIRES HERB CHAMBERS IN $1.45bn DEAL
- INCHCAPE ENTERS ICELAND BY ACQUIRING ASKJA
- GUEST OPINION: ECG, an alternative view
Chancellor to overrule supreme court on car finance?
Chancellor Rachel Reeves is considering overhauling the Supreme Court over the £44bn car loan commission scandal, reports the Guardian, after lobbying by lenders. A decision on the case is due on Friday.
Treasury contingency plans have been discussed that, if judges decide to uphold last October’s appeal court ruling that customers may be entitled to billions in compensation, the government would retrospectively change the law to cut liabilities for lenders.
Rules on such payments are covered by common law and set by judges through court decisions, rather than by parliament. New primary legislation would give parliament the final word over the handling and disclosure of commission arrangements to borrowers.
Crucially, explains The Guardian, the Treasury is understood to be weighting whether then new laws could be retrospective.
“Such a move would represent a huge intervention by the Treasury, and comes months after Reeves controversially tried to intervene in the supreme court case back in January.”
Allies of Rachel Reeves told the FT that “no decisions have been taken”.
Lenders facing significant exposure, should the Supreme Court uphold the ruling, including Lloyds, Barclays, Close Brothers and Santander UK. Lloyds has previously put aside more than £1bn to cover the case.
The FLA has also been lobbying the government to take action.
Peter Waddell offered €1.1m to settle claim
Big Motoring World founder Peter Waddell says Freshstream offered him a €1.1m (£950k) ‘forfeit sum’ to settle a claim over investment cash, reports The Guardian.
Waddel filed his first high court claim against Freshstream last year, alleging the investment firm used an independent investigation into contested sexist, racist and abusive comments “as a means of securing [his] exclusion” from Big Motoring World. Freshstream acquired a one-third share of the business in 2022.
In a second high court case, Waddell claimed the private equity group forced his forfeiture of a €1.5m investment into a Freshstream fund because the firm viewed him as a “nuisance”. It is to settle this claim that the firm offered the €1.1m payment, which it calculates is Waddell’s net contribution after previously receiving €450k from the fund.
Waddell and Freshstream are preparing for a high court showdown over the first claim next year.
“Aside from the specifics of the claim, the case is also likely to highlight a wider theme of founders claiming that some investment companies have used clauses in their agreements to oust entrepreneurs from their own companies,” reports The Guardian.
Stellantis to miss ECG due to EVs built in Poland?
Stellantis could be excluded from the Electric Car Grant because of its reliance on Polish factories. Chinese-made cars are already likely to be blocked from receiving grants due to production processes that aren’t green enough. China is the world’s biggest CO2 emitter due to its huge consumption of coal.
Poland, however, is similarly highly dependent on coal. Around 60% of its electricity is generated from burning coal. Both China and Poland generate around 7.5 tonnes of CO2 per capita overall, according to the IEA.
“We want as many models as possible to qualify for these grants, but the scheme has been intentionally designed to incentivise the greenest possible manufacturing,” a Whitehall source told The Telegraph.
“There will be ways that companies that manufacture in different places, and through different means, can work with us to ensure they are still included.”
Sales staff ‘crucial’ in driving customer loyalty
Retailer sales staff are playing an increasingly important role in securing customer loyalty and driving sales, the latest Motors Consumer Insight Panel has revealed. They have a direct influence on 85% of buyers by making a positive impact on their experience.
‘Trustworthiness and transparency’ are rated equally as important as car selection in prompting customers to return to the retailer they bought their last car from – and ahead of factors such as competitive pricing, aftersales support and convenience.
WEEK AHEAD
Tuesday, Inchcape interims
Tuesday, BRC shop price index
Friday, DCA car finance ruling
DATA INSIGHT
Rents up 21% in three years
£221: Rise in monthly cost of renting a home in past three years. It is now £1,283.
* Sister title Auto Market Insight now features monthly rent in its regular set of finance KPIs. Subscribe here
Consumers face fee for quitting car finance claims
£175: Hourly fee consumers face if they quit ‘no-win, no-fee’ class action lawsuits by law firms and claims management companies.
GLOBAL AUTO
Asbury acquires Herb Chambers in $1.45bn deal
Asbury Automotive, the fifth-largest public auto retailer in the US, has acquired Herb Chambers Cos for $1.45bn. The deal increases Asbury’s representation in the luxury sector, reports Automotive News.
The deal includes $750m for goodwill, $610m for real estate and £85m for new, used and loan vehicles, plus fixed assets, parts and supplies.
Inchcape has entered its 12th market in Europe with the acquisition of Askja in Iceland. The FTSE 250 distributor has also signed up a new brand partner, Kia, in the process. Iceland’s 2024 market was around 12,000 new cars and LCVs, of which Askja has a 16% market share.
OPINION
Electric Car Grant: an alternative view
Making any substantive, robust and accurate predictions on the effect the ECG programme will have on future residual values is nigh-on impossible. Aggregator platforms do tend to promote over enthusiastic and unrealistic predictions in these situations, often then accusing the retailer of not following the so-called science.
Of course, notwithstanding the fact that sound data is of course key to making accurate business decisions in helping with everyday activity and developing strategy etc.
But to assume that enhanced consumer interest (based on the publicity around the huge sums of money being available) will support future valuations is complete folly.
To put it into context, looking back to the previous Tesla tactical pricing actions in 2023, more specifically when they chopped £10,000 off the list price overnight, this had a massive detrimental effect on not just current, but future valuations as well. In fact, if memory serves me correctly, something like 30% was wiped off Tesla values within a matter of a few months. This then had a domino effect of dragging the whole EV sector down at a similar rate.
Hence my view that there will undoubtedly be a detrimental effect on RVs, albeit this will be tempered by actual amounts available, those specific brands/models that are eligible, and of course the overall levels of inventory in the marketplace at any one time.
Similar situations have occurred previously where OEMs have taken significant tactical pricing actions, even worse, sometimes there’s no tactics involved at all, it’s sheer desperation to gain market share almost at any price. The net effect on vehicle values, nearly-new, or sub-2-year-old, vehicles can be significant. This is particularly profound on pre-registered, programme, or demonstrator vehicles.
There is still so much ambiguity concerning eligibility of OEMs, specific qualifying vehicles, amounts per car and so on. The only clarity so far is that it only applies to vehicles with the price tag of less than £37,000.
What’s becoming clearer is those OEMs who suspect their products may not be eligible, specifically, but not wholly, restricted to Chinese OEMs, are developing their own subsidy schemes in order to fully capitalise on current heightened consumer interest. Which is great to see them driving the market and being innovative and proactive gaining an early advantage.
Cliff Deller
Vehicle remarketing consultant
Tristan Young
Editorial Director
Get in touch: tristan@autosunday.co.uk
ISSN 2977-6597