How to Offer Car Finance as a Dealer: FCA Guide (2026)

Last updated 29 September 2026.

If you want to offer finance on your forecourt and your website, you have to become a credit broker, regulated by the Financial Conduct Authority (FCA). This guide explains which permission you need, whether to apply for your own authorisation or join a principal as an appointed representative, what the application involves, and the rules you then live by: commission disclosure, the Consumer Duty and finance adverts on your website. Our guide to the legal requirements for running a used car dealership gives the short version. This is the detail.

This is general guidance based on the FCA’s published pages and Handbook as of September 2026, not legal or compliance advice. The rules change, so check the linked FCA pages or take professional advice before you rely on a detail.

How does a dealer offer car finance?

You introduce customers to lenders as a credit broker, which needs FCA authorisation. In practice:

Get permission. Apply to the FCA through Connect, usually for Limited Permission if you own the vehicles you sell, or become an appointed representative of an authorised firm.
Sign up with lenders or a finance broker whose panel you can introduce customers to.
Disclose your commission and that you are a broker, not a lender, before the customer signs.
Follow the advertising rules for monthly prices and APRs on your website, and meet the Consumer Duty throughout.

Do you need FCA authorisation to offer car finance?

Yes. If you introduce customers to a finance company or lender so they can buy a vehicle from you, that is credit broking, and you need FCA authorisation before you do it (FCA: motor dealers). There are two routes. You can be authorised yourself (directly authorised), or you can work as an appointed representative under a firm that is already authorised.

Either way, the customer’s finance agreement is with the lender, not with you. Your job is the introduction and an honest explanation of what they are signing. The Financial Ombudsman Service describes the car dealer as “acting as credit broker” when a lender pays it commission (Financial Ombudsman Service: complaints about commission).

Limited or full permission: which do you need?

Most dealers who own the vehicles they sell need Limited Permission. The FCA’s page for motor dealers sets out the permissions it expects, based on what you actually do (FCA: motor dealers).

If you own the motor vehicles you sell, you meet the FCA’s definition of a supplier and can apply for Limited Permission:

If you...	You're likely to need
Introduce customers to third party finance providers	Limited Permission Secondary Credit Broking
Offer part exchange on vehicles with outstanding finance	Limited Permission Debt Adjusting and Debt Counselling, limited to relevant credit activities
Lease or hire the vehicles you own for longer than 3 months	Limited Permission Consumer Hire (unless you hold Full Permission for another activity)

The part exchange line is easy to miss. Settling a customer’s existing finance on their part exchange is a separate regulated activity, so include it in your application if you do it. Our part exchange guide covers the settlement figure and how it goes into the deal.

You need Full Permission if you introduce customers to finance or leasing companies for anything other than buying or leasing the vehicles you sell, because some of your broking would not be connected to your vehicle sales. The FCA’s wider guidance on secondary credit brokers explains the idea: Limited Permission is for firms where credit broking is not the main business.

If you do not own the vehicles, for example you source them for customers, the FCA’s table depends on the lenders you use and whether you settle part exchange finance. If those lenders offer other credit, such as unsecured personal loans, you need Full Permission. And if you lend your own money, you only stay in Limited Permission if you supply the vehicles and your lending is always free of interest and charges, and never hire purchase or conditional sale.

Direct authorisation or appointed representative?

Direct authorisation gives you control; being an appointed representative (AR) gets you trading under someone else’s permission. An AR carries on regulated activity under the responsibility of an authorised firm, called the principal (FCA: appointed representatives and principals).

The FCA says a principal must:

have a written AR agreement setting out what business the AR can do
assess the AR’s fitness and propriety before appointing them
tell the FCA at least 30 days before the appointment takes effect
regularly review the AR’s activities, business and senior management

An introducer appointed representative (IAR) is narrower still: it can only make introductions and distribute financial promotions.

The trade-off is independence. As an AR you work within your principal’s permissions, processes and oversight, so ask what they charge and which lenders you can use. Direct authorisation means your own application, compliance monitoring and annual FCA fees, but you choose your lenders.

How to apply for FCA authorisation

You apply online through the FCA’s Connect system, registering first and then submitting the application (FCA: how to apply).

For motor dealers, the FCA expects your regulatory business plan to:

set out your end-to-end customer journey
show you understand the risks your business faces and poses to consumers, and how you will control them
show how you will meet the Consumer Duty
name the lenders or brokers you plan to work with, and the types of agreement you will broker
explain how you will make sure credit products are not unsuitable for customers
state any fees you charge and any commission you will earn

It also wants a financial promotions policy showing how customers will know you are a broker, not a lender, and how you will handle refunds if you charge fees (FCA: motor dealers).

Fees. A Limited Permission consumer credit application is fee Category 2. A Full Permission application is Category 3, 5 or 6, depending on the permissions. The FCA lists Category 2 at £560, Category 3 at £1,130, Category 5 at £5,640 and Category 6 at £11,260 (FCA: application fees). Annual fees are separate.

Timescales. The FCA says it usually assesses a complete application within 6 months, and an incomplete one can take up to 12 months. It also warns you are unlikely to be authorised straight away because it usually has questions. Budget for that gap: you cannot broker finance until you are authorised or appointed as an AR.

Working with lenders and finance brokers

You can sign up directly with one or more motor finance lenders, join a finance broker’s dealer programme, or both. Each lender or broker decides which dealers it works with, so have your FCA details ready.

A few things to settle before you sign:

How many lenders. If you work with a single lender or have an exclusive or first refusal deal, your finance promotions have to say so (see the advertising section below).
How commission is paid. Get it in writing, and make sure it is not linked to the interest rate you set (that is banned, see below).
Who sees the application. Know where customer data goes and how decisions come back to you.

Some UK car finance brokers, such as Zuto and Car Finance 247, also find finance for customers first and let them choose a car from dealer stock. That is a separate relationship from your own broking: the broker handles the finance and you sell the car.

Commission disclosure: the rules now

You must tell customers about your commission before they sign. Under CONC 4.5.3R, a credit broker must prominently disclose, in good time before the agreement is entered into, the existence and nature of any commission, fee or other payment where it could affect the broker’s impartiality or have a material impact on the customer’s decision. CONC 4.5.3A adds that you must explain how that commission may affect the amounts the customer pays. If the customer asks, CONC 4.5.4R says you must tell them the amount, or the likely amount (FCA Handbook: CONC 4.5).

Discretionary commission is banned for motor finance. Since 28 January 2021, CONC 4.5.6R has stopped lenders and brokers entering into a discretionary commission arrangement on agreements that finance a motor vehicle. That is any arrangement where the dealer can set or negotiate the interest rate and the commission changes with it. Commission that does not change with the rate you set is not caught by the ban, but it still has to be disclosed.

The motor finance redress scheme shows what happens when disclosure goes wrong. It covers agreements between 6 April 2007 and 1 November 2024 where customers were not told about discretionary commission, high commission, or contractual ties that gave a lender exclusivity or a right of first refusal (FCA: motor finance redress scheme). Parts of it are suspended while legal challenges are heard. Our guide to the motor finance redress scheme for dealers covers what it means for you.

For a dealer starting today, the lesson is simple. Tell customers you receive commission, what kind, whether it varies by lender or product, and about any tie to a lender. Put it in writing, in plain words, before the customer signs, and keep a record that you did.

The Consumer Duty for dealers who broker finance

The Consumer Duty applies to you as soon as you are regulated. It came into force on 31 July 2023 for products still on sale (FCA: PS22/9), and its core principle is that a firm must act to deliver good outcomes for retail customers (FCA: about the Consumer Duty).

The FCA sets out three cross-cutting rules (act in good faith, avoid causing foreseeable harm, and enable and support customers to pursue their financial objectives) and four outcomes: products and services, price and value, consumer understanding, and consumer support. For a finance-selling dealer, that means in practice:

offering finance that suits the customer, not the product that pays you most
being able to show that your commission and any fees still give customers fair value
explaining the agreement so an ordinary customer understands it, including what happens at the end
helping customers who come back to you in difficulty, not leaving it all to the lender

Finance adverts on your website

Finance figures on your website are financial promotions, and the rules in CONC 3 apply. Every promotion must be clear, fair and not misleading, and you must not say or imply that credit is available whatever the customer’s circumstances. The FCA gives “guaranteed” or “pre-approved” finance as examples that may break that rule (FCA Handbook: CONC 3.3).

If an advert shows an interest rate or any amount relating to the cost of credit, you need a representative example (FCA Handbook: CONC 3.5). CONC 3.5.5R lists what it must include, with equal prominence:

the rate of interest, and whether it is fixed or variable
the nature and amount of any other charges in the total charge for credit
the total amount of credit
the representative APR
for deferred payment deals, the cash price and any advance payment (deposit)
the duration of the agreement
the total amount payable
the amount of each repayment

A representative APR on its own is also required if an advert suggests credit is available to people who might think their access is restricted, compares your finance favourably with someone else’s, or offers an incentive to apply. The representative APR has to pass the “51% test” in its FCA definition, so set it from the deals you really expect to write.

As a broker, CONC 3.7 also says your promotions must state prominently that you are a credit broker and not a lender, show your firm’s legal name as it appears on the FCA register, and say whether you work with one or more lenders exclusively or independently (FCA Handbook: CONC 3.7).

HP and PCP: what you need to explain

Customers need to understand the difference between hire purchase and PCP before they choose.

Hire purchase (HP). The customer usually pays a deposit and then monthly instalments. The Financial Ombudsman Service describes it as hiring the goods by paying in instalments, then making the final payment to become the legal owner.

Personal contract purchase (PCP). Monthly payments are usually lower than on hire purchase for the same car, because a large final payment is left to the end. The Financial Ombudsman Service describes this as the balloon payment or guaranteed minimum future value: the customer can pay it and become the legal owner, or not pay it and return the vehicle (Financial Ombudsman Service: car finance). The ombudsman says it sees complaints about excess mileage and damage charges at the end of agreements, so explain the mileage limit and return conditions up front.

Customers on regulated hire purchase and conditional sale agreements can end the agreement early under section 99 of the Consumer Credit Act 1974 (legislation.gov.uk: section 99). Under section 100, they then owe up to half the total price, less what they have already paid, unless the agreement asks for less (legislation.gov.uk: section 100).

Under section 56 of the Consumer Credit Act 1974, the finance provider can be liable for what a credit broker or supplier says before certain agreements are signed, and the ombudsman says it can also look at some mis-sale complaints against the broker. Describe the vehicle and the finance accurately. Warranties sold alongside finance deserve the same care; our guide to selling used car warranties explains the rules there.

Motorhome, campervan, caravan and motorbike finance

The same broking rules apply whatever you sell. If you introduce customers to finance to buy the motorhomes, caravans or motorbikes you supply, that is credit broking and you need authorisation. The FCA’s secondary credit broking guidance uses a yacht broker as its example, which shows it is not limited to cars.

The motor-specific rules are the difference. The discretionary commission ban in CONC 4.5.6R applies to agreements that finance a motor vehicle, and the FCA’s consumer page on car finance gives “a car, motorbike, van or campervan” as examples (FCA: car finance claims). A touring caravan has no engine, so ask your compliance adviser how the motor vehicle rules apply to your caravan deals. The general commission disclosure, advertising and Consumer Duty rules apply either way.

Common mistakes

Mistake	What to do instead
Offering finance before you are authorised	Wait until your permission or AR appointment is in place before you broker finance or advertise it.
"Everyone accepted" or "guaranteed finance"	You must not imply credit is available regardless of circumstances. Remove it.
A rate or cost of credit figure with no representative example	Add a full representative example, with each item given equal prominence.
Hiding the broker statement in the footer	State prominently that you are a credit broker, not a lender, with your legal name as on the FCA register.
Vague commission wording	Say that you get commission, what kind, whether it varies by lender, and give the amount if asked.
No records	Keep what was disclosed, when, and which lenders you proposed to. Lenders can ask for it.

How Haswent helps

Once you are authorised, Haswent handles the finance tools around your sales. Haswent Dealer Finance puts a finance calculator on your vehicle pages, quoting from your own HP, PCP and lease rates or from Codeweavers, iVendi, Evolution Funding or Jigsaw. A representative example is written from the live figures and shown under the calculator.

The online application shows your credit broker and commission disclosure statement, including your FCA number, under every step once you have added it. It is yours to edit, and you stay responsible for your own disclosures. Applications go to the lenders you choose, and the finance hub in the DMS tracks each proposal through to a deal. Introducer appointed representatives can use IAR mode, which shows the representative example only and passes customers to the lender. It works for car, van, motorbike, motorhome and caravan dealers.

Sources

Frequently asked questions

Do car dealers need FCA authorisation to offer finance?

Yes. Introducing customers to a lender or finance company so they can buy a car from you is credit broking, which is a regulated activity. You need to be authorised by the FCA yourself, or be an appointed representative of a firm that is, before you do it.

What is the difference between limited and full permission for a car dealer?

If you own the vehicles you sell and only introduce customers to finance to buy or lease them, the FCA says you meet its definition of a supplier and can apply for Limited Permission secondary credit broking. If you introduce customers to finance for anything other than the vehicles you sell, or you do not own the vehicles and the lenders offer other credit such as personal loans, you need Full Permission.

Can I offer finance as an appointed representative instead?

Yes. An appointed representative carries on regulated activity under the responsibility of an authorised firm, called the principal, which must have a written agreement with you and oversee what you do. An introducer appointed representative can only make introductions and distribute financial promotions, so the principal or the lender handles the rest of the finance journey.

How much does FCA authorisation cost for a car dealer?

The FCA application fee for a consumer credit firm with Limited Permission is Category 2, which the FCA lists as £560. Full Permission applications are Category 3, 5 or 6 depending on the permissions applied for, which the FCA lists as £1,130, £5,640 and £11,260. Annual fees are charged separately once you are authorised.

How long does FCA authorisation take?

The FCA says it usually assesses a complete application within 6 months, and an incomplete one can take up to 12 months. It also says you are unlikely to be authorised straight away because it usually has questions, so send a complete regulatory business plan and supporting documents first time.

Do I have to tell customers how much commission I earn on car finance?

You must prominently tell customers, in good time before they sign, that commission exists and what kind it is, where it could affect your impartiality or their decision, and explain how it may affect what they pay. If a customer asks for the amount, CONC 4.5.4R says you must tell them the amount, or the likely amount if you do not know it exactly.

Can dealers still earn commission on car finance?

Yes. What is banned for motor finance is a discretionary commission arrangement, where the dealer can set or negotiate the interest rate and the commission changes with it. Commission that does not depend on the rate you set is not caught by the ban, but you must disclose it properly and it must still give customers fair value under the Consumer Duty.

Do the same rules apply to motorhome, caravan and motorbike finance?

Mostly. Introducing customers to finance for goods you sell is credit broking whatever the goods, so you still need authorisation, the financial promotion rules and the commission disclosure rules. The ban on discretionary commission applies to agreements that finance a motor vehicle, which the FCA says includes cars, motorbikes, vans and campervans. If you sell touring caravans, check with your compliance adviser how the motor vehicle rules apply to them.

How to Offer Car Finance as a Dealer: Becoming a Credit Broker