FCA authorisation for car finance

Staying on the right side of the Financial Conduct Authority is not just about ticking boxes. It is about building trust and ensuring your business succeeds in a competitive market. Here are the essential FCA permissions a dealership needs to offer finance legally.

Overview of FCA authorisation for car finance providers

The FCA regulates financial services in the UK so that businesses and consumers operate in a well-regulated market. For car dealers, that means holding the right permissions to offer financial products. The permissions relevant to consumer credit are set out in the FCA’s Perimeter Guidance (opens handbook.fca.org.uk in a new tab) and the CONC (opens handbook.fca.org.uk in a new tab) sourcebook.

Types of permission you may need

Limited permission credit broking

This is the core authorisation for most dealerships. It allows you to introduce customers to lenders and brokers - the basis for offering finance options directly on your sales floor and giving customers choices suited to what they can afford.

Debt adjusting

Taking a car in part-exchange with finance still outstanding on it engages debt adjusting. This permission covers handling those agreements responsibly, so both you and your customer are on firm ground.

Debt counselling

Where customers need advice on the financial implications of a potential agreement, debt counselling permission allows you to guide them without falling foul of the FCA.

Applying for FCA authorisation

Securing these permissions can seem daunting. You will need to demonstrate robust processes for managing loans and customer data, and a clear understanding of the financial products you are offering. The FCA expects thorough documentation, so keep your records straight and your policies clear.

Maintaining compliance

Getting your permissions is the start, not the finish. Keeping up with ongoing requirements - staff training, regular audits of your processes - is what keeps a dealership clear of trouble. Regular updates from professional advisers help you stay current, and our ongoing compliance support covers exactly this.

What this means for you

Securing and maintaining the right FCA permissions is not regulatory red tape for its own sake. It is a foundation for doing business in car finance, and getting it right improves both your standing with the regulator and the service your customers receive.