Do motor finance brokers need FCA authorisation?

Where credit broking is your main business, it is not secondary to another trade, so limited permission is unlikely to be available. Full permission or appointed representative status is likely to be needed.

CONC sets out pre-contract disclosure expectations for credit brokers, including how commission is explained to customers. The detail depends on your model.

Where credit broking is your main business, limited permission is not available and direct authorisation or appointed representative status is likely to be needed. It can change depending on the answers to questions such as: Do you ever lend your own money or retain a customer’s agreement on your own book? Do you help customers settle or restructure existing finance, for example when a vehicle is part-exchanged? Do you also arrange GAP insurance, warranties or other insurance? Do you operate under an authorised network or principal that takes regulatory responsibility for you?

Start with: Credit broking: the activity definition; Perimeter guidance on credit broking; Conduct rules for credit brokers; Pre-contract disclosure including commission. This is an initial view from published FCA material, not an FCA determination.

Apply for credit broking permission, or confirm an appointed representative arrangement. Put CONC 2.5 broker conduct rules and CONC 4 commission disclosure in place. Set up financial promotions approval and Consumer Duty governance. Review complaints handling and the record-keeping you will need for each lender.