"The UK motor finance arm of Mercedes-Benz has plunged into a £365 million loss after setting aside hundreds of millions of pounds to cover potential compensation linked to the mis-selling of car loans. Accounts filed for Mercedes-Benz Financial Services UK, based in Milton Keynes, show the business swung to a £364.6 million loss in 2024, compared with a £69.6 million profit the previous year, after booking additional charges related to improperly disclosed commission arrangements."
"The provision of £423.8 million is the largest disclosed so far by any car manufacturer, underlining the growing financial impact of the motor finance redress scandal, which Financial Conduct Authority estimates could cost the industry around £11 billion. The FCA said in October that millions of motorists could be entitled to compensation averaging about £700 per agreement, after finding that lenders and brokers failed to properly disclose commission payments on car finance deals stretching back to April 2007."
Mercedes-Benz Financial Services UK recorded a £364.6 million loss in 2024 after booking significant provisions to cover potential compensation for mis-sold car finance. The company added a £395 million charge in 2024 on top of £28.8 million previously reserved, bringing the total UK provision to £423.8 million. The provision is the largest disclosed by any car manufacturer and sits within an industry-wide redress issue that the Financial Conduct Authority estimates could cost around £11 billion. The FCA found commission payments were not properly disclosed on deals dating back to April 2007 and has proposed a sector-wide redress scheme.
Read at Business Matters
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