Starting a dealership
FCA authorisation for car dealers explained
When you need FCA authorisation to sell finance, the difference between Limited and Full Permission, and how the application actually works.
TL;DR
If you introduce customers to a finance provider, you need FCA authorisation. A Limited Permission Consumer Credit licence covers most dealers introducing standard PCP or HP. Applications run through Connect, take 3–6 months, and cost £600–£1,500 up front plus annual fees.
When you need authorisation
The FCA regulates consumer credit. If you offer, arrange or introduce finance on a vehicle — Hire Purchase, PCP, Lease Purchase, or even a personal loan referred through a broker — you are carrying on a regulated activity and must be authorised.
Limited vs Full Permission
Most dealers hold a Limited Permission Consumer Credit licence because credit activity is secondary to selling cars. Full Permission is reserved for firms whose main business is lending or credit broking, and comes with heavier reporting requirements.
How to apply
- Create an FCA Connect account.
- Nominate approved individuals (senior managers, compliance officers).
- Prepare a business plan showing how you will meet the Consumer Duty.
- Submit your application and pay the fee.
- Respond to case officer questions promptly.
Ongoing obligations
Once authorised, you must file regulatory returns (RegData), pay annual fees, maintain a complaints procedure, follow the Consumer Duty and keep records of every finance disclosure. Lotra's finance quote module produces compliant customer-facing pre-contract information.
Not regulatory advice. Confirm current requirements with the FCA directly before applying or trading.
Frequently asked questions
Do I need FCA authorisation to sell cars for cash?
No. FCA rules only apply if you sell, introduce or arrange regulated credit or insurance products.
What is Limited Permission?
A lighter form of FCA authorisation for firms whose credit activities are secondary to a main non-credit business — e.g. selling cars with finance introductions. It is what most dealers need.
How long does it take?
Straightforward Limited Permission applications typically take 3–6 months once submitted through the Connect portal.
What does it cost?
Application fee £600–£1,500 depending on income band, plus annual periodic fees and Financial Ombudsman Service levy.
Can I trade before I am authorised?
You can sell cars for cash, but you must not present, arrange or refer any finance until the FCA confirms your authorisation.
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