Credit broking authorisation support
Need help with FCA authorisation?
View our FCA authorisation support for motor dealers.
What Is Credit Broking?
Credit broking is a regulated activity.
In simple terms, credit broking generally involves introducing a customer to a lender or finance provider in connection with a credit agreement.
For motor dealers, credit broking often forms part of the vehicle sales process. While the dealership may not provide the finance itself, introducing a customer to a lender or finance provider can still be regulated activity.
This is why many FCA-authorised motor dealers hold credit broking permission.
Why Do Motor Dealers Need Credit Broking Permission?
Many customers purchase vehicles using finance rather than paying the full purchase price upfront.
Where a dealership introduces customers to finance providers, assists with finance applications or facilitates access to finance products, FCA permission may be required.
For many dealerships, credit broking permission forms the foundation of their FCA authorisation because finance introductions are a routine part of vehicle sales.
Understanding whether your business carries out credit broking activities is an important step when considering FCA authorisation requirements.
What Activities May Constitute Credit Broking?
Examples of activities that may involve credit broking include:
- Introducing customers to finance providers
- Referring customers to lenders
- Assisting customers with finance applications
- Facilitating finance proposals
- Acting as an intermediary between a customer and a finance provider
- Helping customers access vehicle finance products
The regulatory position will depend on the activities carried out by the business and the role played within the finance process.
Credit Broking in a Motor Dealer Environment
A dealership may view itself primarily as a vehicle retailer. However, where finance introductions form part of the sales process, regulated consumer credit activity may also be taking place.
This is why businesses should ensure that:
- FCA permissions accurately reflect business activities
- Website wording accurately describes the dealership's role
- Customer disclosures are provided where required
- Staff understand the dealership's role within the finance process
- Records are maintained consistently and accurately
A clear understanding of the dealership's role can help support both FCA authorisation and ongoing compliance.
Why Credit Broking Permission Matters Before Offering Finance
Before promoting finance or introducing customers to finance providers, dealerships should ensure that the appropriate FCA permissions are in place.
Understanding permission requirements at an early stage can help avoid unnecessary issues with lenders, customers and regulatory obligations.
Businesses should also ensure that staff understand the dealership's role within the finance process and know how finance introductions are handled within the business.
Commission and Disclosure Considerations
Many motor dealers receive commission in connection with finance introductions.
Businesses should understand:
- How commission arrangements operate
- What disclosures are provided to customers
- Where disclosure wording is located
- How commission information is recorded and retained
Maintaining organised records can assist with ongoing compliance obligations and regulatory reporting requirements.
How Credit Broking Connects to CCR009
For many FCA-authorised motor dealers, credit broking activity may be relevant to FCA consumer credit reporting, including CCR009.
Information relating to finance introductions, regulated activities, finance providers and associated records may be required when preparing consumer credit returns.
Maintaining accurate records throughout the year can make regulatory reporting significantly easier.
Records Motor Dealers Should Keep
Good record keeping is an important part of FCA compliance.
Motor dealers should maintain appropriate records relating to:
- Finance introductions
- Finance providers
- Customer disclosures
- Finance-related income
- Regulated activities
- FCA permissions
- Staff involved in finance activities
Maintaining accurate records can support FCA applications, ongoing compliance obligations and regulatory reporting requirements.
Common Misunderstandings About Credit Broking Permission
Some of the most common misunderstandings include:
- Assuming only lenders require FCA authorisation
- Assuming vehicle retailers are exempt from consumer credit regulation
- Believing finance introductions are not regulated
- Assuming all motor dealers require identical permissions
- Not understanding the relationship between credit broking and FCA authorisation
The permissions required will always depend on the activities carried out by the individual business.
How Can a Motor Dealer Check Whether Credit Broking Permission Is Required?
Motor dealers should review:
- Whether customers are introduced to finance providers
- The role played within the finance process
- Whether staff assist with finance applications
- The permissions currently held by the business
- Whether regulated consumer credit activities are undertaken
Understanding the customer journey and the dealership's role within that journey can help determine whether credit broking permission may be required.
Frequently Asked Questions
What Is Credit Broking?
Credit broking generally involves introducing customers to lenders or finance providers in connection with a credit agreement.
Do Motor Dealers Carry Out Credit Broking?
Many motor dealers carry out credit broking activities where they introduce customers to vehicle finance providers as part of the vehicle sales process.
Does Credit Broking Require FCA Permission?
Credit broking is a regulated activity and may require FCA permission depending on the activities carried out by the business.
Is Credit Broking Permission the Same as FCA Authorisation?
Credit broking permission is one of the permissions commonly held by FCA-authorised motor dealers. The permissions required will depend on the activities undertaken by the business.
How Does Credit Broking Connect to CCR009?
Credit broking activity may be relevant to FCA consumer credit reporting, including CCR009 where applicable.
Need Help With Credit Broking Permission?
009 Compliance provides administrative support to motor dealers throughout the UK.
We can help businesses understand FCA authorisation requirements, prepare information and support the administrative process involved in FCA applications and ongoing compliance obligations.
Please note that we do not provide regulated advice. Responsibility for ensuring the correct permissions are obtained always remains with the business.
If you need help understanding credit broking permission for your dealership, contact 009 Compliance today.
Motor dealer FCA permissions
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