By JON BRADY
Published: 23:41 AEDT, 8 November 2024 | Updated: 23:44 AEDT, 8 November 2024
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Postman Andrew Wrench likes his cars - so much so that in over 40 years of driving he reckons he has owned more than 30 of them.
But when the Stoke-on-Trent father of one snapped up a sporty Audi TT and a BMW convertible on finance a few years ago, little did he realise he had embarked on a journey that would lead to an almighty reckoning for the UK's lending industry.
'I never buy cars on finance,' he tells MailOnline. 'I've had Porsches, Mercedes, a Triumph Stag with the V8 three-litre - and I've always paid cash.'
Mr Wrench, 60, is one of the unlikely architects of a court case that sent Britain's car finance firms into a spiral after he discovered the FirstRand Bank lending agreements included 'secret' commission payments to the dealerships selling the motors.
He took his lender to county court, hoping to have the commission returned - but his case was merged with two others and elevated to Britain's top appeal court, with seismic consequences on a scale not seen since the PPI scandal of the 2000s.
Postman Andrew Wrench, 60, is one of the unlikely architects of a legal case that has turned the UK's borrowing industry upside down
The former retail manager snapped up this special edition Audi TT for his wife in 2015 on finance - unwittingly getting the dealership a commission
Two years later, he snapped up this sleek BMW 3 Series convertible - again netting a dealership a payout because it referred him for finance
At the Court of Appeal, Lady Justice Andrews and Lords Justices Birss and Edis ruled Mr Wrench and his fellow car buyers had not made a truly informed decision on finance because they did not know their dealership was being paid for the deal.
Just like that, the borrowing market imploded: Shares in FirstRand and Close Brothers, the other lender implicated in the judgement, tumbled.
Elsewhere, Lloyds set aside millions for compensation; BMW and Honda halted new car deliveries; other dealerships froze purchases as they hurriedly rewrote credit agreements to mention commission.
The consequences could be huge for the lending market - with between 80 and 90 per cent of new UK car purchases made on credit. The Finance and Leasing Association says its members issued £52bn of car loans last year.
The sale was 'quick', he remembers: 'The salesman came back with the paperwork and it was quite swift: bang, bang, bang, four signatures required and away you go.'
Less than two years later, he came across a lustrous blue BMW 3 Series hard-top convertible coupe with a throaty 2.5litre engine. This one would be for him.
He contacted the dealership, TT Sports and Prestige, and hopped on the train to Derby on March 13 2017.
The salesman met him at the train station in the car itself - a clever sales pitch, Mr Wrench notes - and he bought the car that day, putting down £1,000 against the £9,750 price and funding the rest of the purchase with another credit agreement.
He remembers: 'We went back to the place, sat down, chewed over the cod as you do, and then the bottom line, sign here, £220 a month and you can drive it away today. Wow!'
Mr Wrench borrowed the money for the Audi at an APR of 19.3 per cent and the BMW at a APR of 10.2 per cent. Both were four year agreements.
In each cases, the court said Mr Wrench had been told by the dealerships they would get him 'the best rate from their panel of lenders'.
But in reality, Mr Wrench had unknowingly helped the dealers to make an extra win on his car sale when he agreed to finance the purchases through MotoNovo - which lent £3.9billion to Brits in the year to June 2024.
Fast Lane was paid £179.85 for the Audi loan, while TT Sports and Prestige was paid a total of £408.98 for the BMW. Of that, £299.60 was 'difference in charge' commission - a now outlawed bonus that was directly linked to the interest rate.
The postman was completely unaware he was doing the dealerships an extra favour. He admits that he did not read the lengthy terms of the finance agreements from beginning to end - because, frankly, who does?
MotoNovo Finance paid Fast Lane nearly £180 in extra commission for the Audi's sale
TT Sports and Prestige, meanwhile, was paid over £400 - of which nearly £300 was directly linked to the interest rate on Mr Wrench's finance agreement
The scandal has been compared to the mis-selling of payment protection insurance (PPI), which cost banks billions. Experts say this could do the same to lenders (stock image)
'If anybody says different, they'd be lying,' he says. 'There are tens of thousands of people who do this every year.'
He says he has read comments on news articles about the ruling that call him an 'idiot' and a 'clown' for not reading the agreement from cover to cover.
But the Court of Appeal actually sides with him on this - noting that lenders are almost certainly aware there is a 'negligible' chance of consumers reading the terms from top to bottom.
Any money he does get will fund his 16-year-old son Ethan's first car, Mr Wrench said, along his law degree - while glibly noting the Labour government's plan to hike tuition fees to £9,535, announced earlier this week.
'We've been saving money for Ethan since he was born, so the money is just something we don't need,' he says.
'If it's a small fee it'll go to charity, and if it's a larger fee it will go to our son's future. That's the way I roll, the way I work, and I always have done.
'People that know me know this was not for financial gain. It's the principle, it's accountability, their deceitfulness and dishonesty. I am very proud.'
The battle of three plucky ordinary Brits taking on the fat cats - and not just winning, but beating the system altogether? It could almost be a film.
Close Brothers has suspended new car loans. Lloyds' Black Horse lending division has stymied commission payments. MotoNovo, meanwhile, is back in business in giving out loans.
For Andrew Wrench, he just wants car dealers to clean their act up: that when they tell customers they'll work to get them the 'best deal', they mean it.
Mr Wrench continues: 'When I started this I had thought: "Am I going to lose?" Will they say, go away little postie from Stoke-on-Trent, and the other two, a student nurse and a supervisor? We're all just normal human beings that paid our way in life.
'It's very sad to know that for many, many years this has been going on - but now it's going to stop, and I've been one of those parties that have been responsible for that.'
Published by Associated Newspapers Ltd
Part of the Daily Mail, The Mail on Sunday & Metro Media Group