While consumers will welcome new transparency around fees, there is also the possibility of a new appeal to the Supreme Court, which could theoretically reverse the latest decisions. However, even an expedited case before the Supreme Court will likely take several months, and until then the industry must abide by the new court ruling.

According to a letter sent to dealers by Honda Europe chief financial officer Richard Winter and first published on the Car Dealer website, the ruling means dealers and motor finance companies across the country are looking at the existing agreements to see if they can be completed. “Car finance lenders across the sector will now consider whether they can conduct finance business before changing their systems in line with the ruling,” Winter says.

“As a result of this ruling, Honda Finance will suspend commercial payments until further notice while we continue to evaluate the ruling and its impact. There will be no exceptions to this.”

Honda has asked dealers for support to “manage customer expectations” after canceling new car deliveries scheduled for the weekend until further notice. However, the implications extend far beyond dealer forecourts, because the latest ruling raises the specter of possible billions of pounds in compensation for customers with existing car finance deals. Some analysts have estimated the potential payout figure at £16 billion, although one of the finance companies named in the appeal court ruling, Close Brothers, has indicated it will challenge the ruling. Meanwhile, Close Brothers’ share price has taken a hit, as has that of Lloyds Bank, owner of Black Horse Finance, which is said to be “assessing the potential impact” of the ruling.

Are you thinking of buying a new car? Click here to see our guide on how to buy a car online…