MEMA Scope · Assessment

Do rent-to-own and vehicle leasing providers need FCA authorisation?

A business hires goods, vehicles or appliances to individuals for periods that can exceed three months, for example personal contract hire, subscription cars or rent-to-own. Review the initial view below and answer a few questions to refine it.

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Initial viewProvisional assessment

Potential regulated activity identified

Consumer hire may require FCA authorisation

Regulated consumer hire agreements that can last more than three months and are not exempt are regulated.

Route to consider: Direct authorisation (full permission)

Consumer Hire (Rent-to-Own, Vehicle Leasing)

Why this was flagged

1Hire agreements with individuals that can run for more than three months are within the consumer hire definition.
2Introducing customers to owners of such agreements can itself be credit broking.

Questions still to resolve

Answer to refine the view. The result updates as you go.

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Can any agreement last more than three months?
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Does the customer buy the goods at the end, or have an option or obligation to do so?Hire purchase and conditional sale are treated as credit agreements, not hire.
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Do you introduce customers to leasing companies that own the vehicles?

Regulatory basis to examine

RAO Art.60N Regulated consumer hire agreementsRegulated consumer hire agreements PERG 2.7 Activities: a broad outlinePerimeter guidance (PERG 2.7)RAO Art.36A Credit brokingCredit broking includes consumer hire introductions

Your next steps

1Check each product against the three-month and exemption tests
2Decide which permissions you need: consumer hire, lending, broking
3Review pre-contract information and promotions under CONC
4Design arrears and vulnerable customer procedures

Where applications for this model most often fall short

A product-by-product perimeter table
Affordability approach for hire customers
Clear terms showing who owns the goods and when

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This is an initial indication from published FCA material, not an FCA determination or legal advice.

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How Compass helps

Ask about an activity, exclusion or FCA requirement. Answers come only from vetted profiles, FCA Handbook and legislation extracts and MEMA guidance, and every answer cites its source.

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If authorisation is required, check the firm’s governance, policies, resources and application preparedness.

Will the FCA Authorise Us?

MEMA Scope gives an initial view from published FCA material. It is not legal advice or an FCA determination. Automatic matching and typed questions use AI only to choose a profile and to answer from vetted guidance; the assessment itself is never written by AI.

About this business model

A business hires goods, vehicles or appliances to individuals for periods that can exceed three months, for example personal contract hire, subscription cars or rent-to-own.

Regulated consumer hire agreements that can last more than three months and are not exempt are regulated.

This page gives an initial view from published FCA and legislation sources. It is not an FCA determination or legal advice. Not your business model? Describe your business in MEMA Scope.

Rent-to-own or vehicle leasing provider: frequently asked questions

Is car leasing regulated by the FCA?

Entering into a regulated consumer hire agreement as owner is regulated under RAO Art.60N where the hire can last more than three months and is not exempt. Many personal leases may be caught, but business hire is often not.

Is rent-to-own regulated?

Rent-to-own agreements may be regulated consumer hire if they can last more than three months, or credit agreements if ownership passes. The detail of the contract decides.

What could change the answer for rent-to-own and vehicle leasing providers?

Regulated consumer hire agreements that can last more than three months and are not exempt are regulated. It can change depending on the answers to questions such as: Can any agreement last more than three months? Does the customer buy the goods at the end, or have an option or obligation to do so? Do you introduce customers to leasing companies that own the vehicles?

Which FCA rules should rent-to-own and vehicle leasing providers look at first?

Start with: Regulated consumer hire agreements; Perimeter guidance (PERG 2.7); Credit broking includes consumer hire introductions. This is an initial view from published FCA material, not an FCA determination.

What are the first steps for rent-to-own and vehicle leasing providers?

Check each product against the three-month and exemption tests. Decide which permissions you need: consumer hire, lending, broking. Review pre-contract information and promotions under CONC. Design arrears and vulnerable customer procedures.

Businesses we check

MEMA Scope covers 32 common business models. Each page explains whether that kind of business may need FCA authorisation, the rules to look at and the routes to consider.