Motor dealers

You meet our definition of a supplier and can apply for Limited Permission.

If you introduce customers to finance or leasing companies for purposes other than buying or leasing the vehicles you sell, you'll need to apply for Full Permission because some of your credit broking won't be for the purpose of, or in connection with, the sale of vehicles.

You don't meet our definition of a supplier so the activities you'll need to apply for, and whether you need Limited or Full Permission, will depend on what you do.

Your credit broking will be in connection with the service you supply. As a result, you may be able to apply for Limited Permission. The activities you need to apply for will depend on what you do.

Make sure you:

• set out your end-to-end customer journey
• show us that you understand your business, the risks it faces, the risks it poses to consumers and how you'll control these risks
• demonstrate how your firm plans to deliver consistently good outcomes for consumers
• demonstrate how your firm will meet our Consumer Duty requirements
• identify which lenders or brokers your firm intends to work with, and the types of credit or hire agreements your firm will broker
• explain how your firm will ensure that its credit products aren't unsuitable for customers
• clearly state any fees charged and what, if any, commission will be earned
• provide full details of any unregulated activities your firm will undertake alongside, or in addition to, its regulated activities

Make sure you:

• show in your financial promotions policy how you'll ensure consumers know you're a broker, not a lender
• demonstrate how you'll ensure your communications more generally alert customers to the fact they're dealing with your firm (a motor dealer), not the lender
• demonstrate how you'll deal with refunds if you charge fees for finding credit or hire agreements

This is where the customer repays you directly rather than a third-party finance provider.

Here you'll need lending or consumer hire permissions and your RBP and other supporting documents must:

• explain why your lending is not exempt (eg because it's repaid over more than 12 months)
• if you add any charges, demonstrate that your products or services are of fair value to your customers
• demonstrate that you can comply with our creditworthiness rules by:
  • carrying out a proportionate assessment of the customer’s ability to afford the repayments, and
  • assessing the credit risk you face when lending to a customer
• show that you'll treat borrowers in, or at risk of, financial difficulty with forbearance and due consideration
• demonstrate that you have sufficient financial resources to issue loans and sustain your business if arrears rates increased