Honda said it has now resumed deliveries of new cars after a temporary halt due to the chaos in the car finance market following a Court of Appeal judgement on commission disclosure last week.
The Japanese carmaker told dealers not to hand over cars bought on credit following the ruling but said it has installed new systems that clearly display any commissions payable.
“We have now had time to review the situation and have been able to put in place interim measures to allow us to resume the funding of all finance business.”
BMW has also started deliveries again after it too halted its operation due to the legal ruling.
Car dealers, meanwhile, said the ruling had changed the rules overnight, with some legal firms suggesting that the final bill might even exceed the cost of PPI.
The ruling said that by not disclosing the full extent of commissions to customers buying a car with a loan, dealers were acting illegally.
The plaintiffs in last week’s cases, which include UK-listed Close Brothers Group PLC (LSE:CBG), have said they intend to appeal the ruling to the Supreme Court but if they lose lawyers have suggested the compensation claims will be through the roof.
Close Bros said the judgment went beyond an investigation already underway by UK financial regulator the FCA by widening the scope of potential compensation to cover any products arranged at the time of a sale not just a loan.
The timeframe now is almost open-ended, one lawyer told The Telegraph, who said his firm had 75,000 motor finance claims stacked up already with the total across all firms said to be in the millions.
Another warned that if the Supreme Court upholds the judgement the cost potentially could run into tens of billions of pounds and put the viability of some lenders at risk.
Canadian broker RBC yesterday substantially increased its estimates of the bills facing the lenders.
Lloyds Banking Group PLC (LSE:LLOY), which is seen as the most exposed, is looking at £3.2 billion, up from £2.5 billion previously, with Santander UK now facing £1.4 billion from £1.1 billion.
Earlier this week Santander postponed the results from its UK arm due to the potential bill from the motor finance shake-out.
Other lenders on the hook according to RBC include Bank of Ireland (LSE:BKIR), Barclays, and Close Brothers Group at €950 million (previously €750 million), £400 million (previously £360 million), and £320 million (previously £250 million), respectively.
Shares in Lloyds today rallied 0.6% to 53.7p, while Close Bros jumped 3.7% to 236.4p.