Motor finance provisions rise to £541.3m as tribunal begins

Stellantis Financial Services and Close Brothers are facing combined motor‑finance provisions of £541.3 million as a tribunal convenes to set a timetable for legal challenges. The hearing, which began in October 2026, highlights mounting liabilities that could affect credit availability for dealers.

Key takeaways

• Stellantis Financial Services and Close Brothers together hold £541.3m in motor‑finance provisions.
• A tribunal is hearing to decide the timetable for legal challenges.
• The provisions signal heightened risk for motor‑finance lenders.
• Higher provisions may tighten credit for vehicle dealers.

Background to the tribunal hearing

The tribunal was appointed after regulator‑led investigations uncovered potential mis‑selling and compliance failures across the motor‑finance market. It will determine a schedule for further legal actions against the firms.

Both Stellantis Financial Services and Close Brothers have been criticised for their handling of consumer redress, prompting the tribunal to intervene and enforce a clear timetable for any required repayments.

Impact on motor‑finance providers

The £541.3m provision represents a significant increase in the reserves that the two companies must set aside to cover expected claims. This move directly reduces their profit margins and may prompt a review of underwriting standards.

Analysts expect the firms to tighten credit criteria while the legal process unfolds, aiming to protect balance‑sheet stability amid rising exposure.

Potential effect on dealer financing

Dealers relying on financing from Stellantis Financial Services or Close Brothers could see stricter approval processes and higher interest rates as the providers manage their enlarged risk buffers.

Reduced availability of affordable finance may push dealers to seek alternative lenders, potentially affecting trade‑in volumes and new‑car sales.

What this means for dealers

Dealers should anticipate tighter credit terms and be prepared to demonstrate stronger borrower profiles when applying for floor‑plan finance. Early engagement with multiple financing sources can mitigate the risk of supply‑chain disruption.

Monitoring the tribunal’s timetable will be crucial, as any further rulings could intensify the pressure on finance providers and, consequently, on dealers’ access to funding.

Frequently asked questions

Why have motor‑finance provisions risen to £541.3m?

The rise reflects additional reserves set aside by Stellantis Financial Services and Close Brothers to cover anticipated redress claims identified during regulator investigations, prompting a substantial increase in their liability provisioning.

How might the tribunal’s timetable affect dealer access to finance?

If the timetable leads to larger or more frequent settlements, lenders may further tighten credit criteria, raise rates, or limit exposure, making it harder for dealers to obtain affordable financing for inventory and customer purchases.