Limited Permission FCA Authorisation for Motor Dealers

Why Do Motor Dealers Apply for Limited Permission FCA Authorisation?

Many dealerships offer customers the option to purchase vehicles using finance.

Where a business introduces customers to finance providers, assists with finance applications or carries out certain regulated consumer credit activities, FCA authorisation is generally required.

For dealerships where finance activity is ancillary to vehicle sales, Limited Permission FCA authorisation is often the most appropriate authorisation structure.

This is why Limited Permission FCA authorisation is commonly found throughout the motor trade.

What Activities Can Be Carried Out Under Limited Permission?

The activities a business can carry out will depend on the permissions granted by the FCA.

For many motor dealers, Limited Permission FCA authorisation may be appropriate where the business:

• Introduces customers to finance providers
• Carries out credit broking activities connected to vehicle sales
• Assists customers with finance applications
• Undertakes regulated consumer credit activities linked to vehicle transactions

Businesses should always ensure that the permissions held accurately reflect the activities carried out by the firm.

Do All Motor Dealers Qualify for Limited Permission?

No.

Whether a dealership qualifies for Limited Permission FCA authorisation depends on its business model and regulated activities.

Some firms may require Full Permission FCA authorisation if they carry out broader consumer credit activities or operate beyond the scope typically associated with Limited Permission businesses.

The correct permission structure will depend on the firm's individual circumstances and the activities it undertakes.

Limited Permission vs Full Permission FCA Authorisation

Many motor dealers are unsure of the difference between Limited Permission and Full Permission FCA authorisation.

In general, Limited Permission is often suitable where consumer credit activities are secondary to the sale of vehicles.

Full Permission FCA authorisation may be required where a business undertakes wider regulated consumer credit activities or where finance activity forms a more significant part of the firm's operations.

The appropriate authorisation structure should always be based on the activities carried out by the business rather than assumptions about what other dealerships may hold.

How Do I Apply for Limited Permission FCA Authorisation?

Motor dealers applying for Limited Permission FCA authorisation will generally need to submit an application to the FCA and provide information about their business, ownership structure, activities and compliance arrangements.

The FCA will review the application and assess whether the permissions sought accurately reflect the activities carried out by the business.

Preparing accurate information before starting an application can often make the authorisation process smoother and reduce delays.

How Can a Motor Dealer Check Which FCA Permission Is Required?

Motor dealers should review:

• The activities carried out by the business
• Whether finance introductions are provided
• The nature of any regulated consumer credit activities
• Whether finance activity is secondary to vehicle sales
• The permissions required for those activities

Understanding the firm's business model is an important part of determining which FCA permissions may be appropriate.

Common Misunderstandings About Limited Permission FCA Authorisation

Some of the most common misunderstandings include:

• Assuming all motor dealers automatically qualify for Limited Permission
• Assuming Limited Permission and Full Permission are interchangeable
• Believing vehicle finance introductions are not regulated
• Assuming another dealership's permissions automatically apply to your business
• Not reviewing whether permissions accurately reflect business activities

The correct permissions will always depend on the activities carried out by the individual firm.

Why Choosing the Correct FCA Permission Matters

Obtaining the correct FCA permissions is an important part of operating a compliant motor dealership.

Businesses that understand their regulatory obligations from the outset are often better placed to manage FCA compliance requirements and introduce finance products confidently.

Reviewing permissions carefully before applying can help avoid unnecessary delays and ensure that the business is authorised appropriately for the activities it carries out.