If you are a motor dealer aiming to offer finance options, securing FCA approval for motor dealers is a crucial step. This page provides an overview of the authorisation process and how to apply.
Specifically, we’ll explain how to get FCA approval for motor dealers into clear, manageable steps, helping you avoid common mistakes and achieve approval faster.
1. Determine What Permissions You Need: FCA Approval For Motor Dealers
As a motor dealer offering finance, you will most likely require authorisation as either:
✅ Limited Permission Firm: If finance is a secondary service and you only introduce customers to third-party lenders.
✅ Full Permission Firm: If you offer hire purchase, consumer credit, or in-house finance, meaning customers repay you directly.
For motor dealers, a usual permission set consists of:
- Limited Permission Secondary Credit Broking. This allows you to introduce customers to lenders and offer finance options at the point of sale.
AND Limited Permission:
- Debt Adjusting, limited to the settlement of vehicle finance. This is essential for handling part-exchange vehicles with outstanding finance, ensuring smooth financial settlements for both parties.
- Debt Counselling, limited to the settlement of vehicle finance. This enables you to provide informed advice on finance agreements while staying compliant with FCA regulations.
This is just an example and other permissions are available, for example for consumer hire.
Working out which authorisation and which permissions to obtain can be confusing, and we are always happy to discuss your business model and which permission set will be best for you.
The FCA has also created plenty of reading. While this can be overwhelming it could also be useful to have a glance at, available to read here.
🚨 Applying for the wrong authorisation and permissions could mean wasting time and money.
2. Application Documents
The FCA requires detailed information about your business to ensure you’ll operate fairly and responsibly. Here’s what you’ll need to provide:
Regulatory Business Plan (RBP)
- This is a compliance focused document outlining how you’ll meet FCA regulations and mitigate risks.
- It should explain how your dealership operates, your financials, and why you need FCA approval.
Policies & Procedures
- Evidence that you have processes in place for customer protection, marketing procedures, and complaints handling.
- A compliance monitoring plan for the year.
Financial Analysis
- The FCA will want to see that you are financially stable and can sustain a compliant finance operation.
- Your financial analysis should include information on your income statement, balance sheet and cash flow statement, and include financial forecasts.
- If you are already trading the FCA will also want to see historical accounts.
Fit & Proper Test
- The FCA will assess key people in your business (owners, directors, and senior managers) to ensure they are suitable to run a regulated firm.
- A motor dealer with limited permissions will only need one individual directly approved by the FCA. This person will hold the Senior Management Function (SMF29) and will be listed on the FCA register.
🚗 Don’t worry, we help you prepare the documents for submission. Making sure they are detailed, accurate, and consistent. We also help with follow up FCA questions.
3. Submit Your FCA Application
Once your documents are ready, it’s time to apply through the FCA’s online portal, Connect. This is where we help you:
✅ Fill out the online application form.
✅ Upload all supporting documents.
What is the FCA application fee?
At the submission point, you pay the FCA application fee. This is currently £540 for a limited permission credit broking firm.
🚨 Mistake to Avoid: Rushing your submission. An incomplete or inaccurate application can lead to unnecessary delays.
4. The FCA Review Process & Follow-Up Questions
After submission an FCA caseworker will review your application, requesting clarifications, explanations or further details. You should expect follow-up questions.
The FCA can typically take 6 months to process applications. This can vary depending on their workload.
During this period, the caseworker might:
📌 Request additional information. Be ready to clarify business details.
📌 Assess your financial promotions. If you advertise finance, they’ll check that your marketing is clear and not misleading.
📌 Ensure customer protection policies are robust. The FCA wants to see that you treat customers fairly.
🚗 Tip: We will be on hand to help. If the FCA asks for more details, forward any questions or queries immediately to us so that we can plan responses. The FCA give a very short window to respond, usually 5 – 10 days.
5. FCA Decision & Next Steps
Once the FCA is satisfied, they will either:
✅ Approve your application – Congrats! You can now legally offer finance as an FCA authorised dealer. Your details will be available to see on the FCA register.
❌ Reject your application. If this happens, the FCA will explain why and you may need to reapply or appeal. We will be on hand to discuss your next steps and options.
6. FCA Approval For Motor Dealer Is Now Secured, What’s Next?
Once you are approved and have your motor dealer FCA license, you must:
- Display your FCA authorisation details on your website and marketing materials, following the rules in the FCA sourcebook.
- Follow all FCA compliance rules (ongoing reporting, fair treatment of customers, etc.).
- Keep your finance policies up to date to avoid any regulatory issues.
Motor dealers seeking FCA approval must pay an annual fee based on your income from introducing credit and conducting regulated activities. The exact cost varies, and you can estimate your fees using the FCA’s Fee Calculator. Therefore, staying compliant also means budgeting for ongoing regulatory costs to maintain authorisation.
🚨 Ignoring FCA compliance post-approval can lead to investigations, fines, or even losing your licence!
Get In Touch With Us: FCA Approval for Motor Dealers
To summarise, getting FCA approval for motor dealers might seem like a long process, but with the right preparation, it’s completely manageable.
Applying for an FCA licence is a critical step in legally offering finance as a motor dealer. So let us handle the complexities and you can focus on running your business.
Once approved, you’ll unlock huge benefits, with the opportunity to offer finance options, increased sales, and greater customer trust.
Contact Us, to start your FCA application started with confidence.
