AutoSmart GuidebooksWhat this guidebook covers
In the UK, the car finance desk is a dealership's biggest regulatory exposure. Discretionary commission was banned in January 2021, the Consumer Duty came into force in July 2023, and the motor finance redress scheme (March 2026) covers an estimated 12.1 million agreements arranged through dealers. Every finance deal leaves a record.
This guidebook covers 7 standards with 21 checkpoints for dealers acting as credit brokers: FCA permission, commission and lender ties, fair value, affordability and accurate applications, finance ads, vulnerable customers and complaints.
The 7 motor finance standards
Open a standard to see the law behind it, what is checked, what it can cost and the evidence. Ideal fix times are counted from audit submission.
FCA-01FCA permission for credit brokingImmediate
- The law
- Financial Services and Markets Act 2000 · Consumer Credit Act 1974 · FCA Handbook · FSMA s.19 / s.23 general prohibition · credit broking is a regulated activity (RAO art. 36A)
- What we check
- The dealership only introduces customers to car finance while it holds FCA permission for credit broking, or as an appointed representative of a firm that does, and the Register shows the right entity and trading names.
- What it can cost
- Unauthorised credit broking: up to 2 years in prison, and customers may be able to walk away from agreements you arranged.
- Evidence
- Register screenshot + AR agreement
FCA-02Commission and lender ties disclosedImmediate
- The law
- Financial Services and Markets Act 2000 · Consumer Credit Act 1974 · FCA Handbook · CONC 4.5.3R commission disclosure · CCA s.140A unfair relationships · discretionary commission banned since Jan 2021
- What we check
- Customers are told, before they commit, that the dealer receives commission, how it works and roughly how much, and whether the dealer has any tie or preferred arrangement with the lender.
- What it can cost
- One undisclosed commission is a claim. A dealer group writing 5,000 finance deals a year at the £829 average faces £4M+ a year in potential redress.
- Evidence
- 10 deal files + disclosure template
FCA-03Consumer Duty: fair value30 days
- The law
- Financial Services and Markets Act 2000 · Consumer Credit Act 1974 · FCA Handbook · PRIN 2A Consumer Duty (in force 31 Jul 2023): price and value outcome, products and services outcome
- What we check
- Finance, GAP, paint protection and other add-ons sold with a car offer fair value, are sold to customers they suit, and the dealer can show evidence of that.
- What it can cost
- Poor-value add-ons across every deal become redress for every customer, plus a fine calculated on the revenue earned.
- Evidence
- Assessments + MI pack
FCA-04Affordability and accurate applicationsImmediate
- The law
- Financial Services and Markets Act 2000 · Consumer Credit Act 1974 · FCA Handbook · CONC 5 responsible lending · CONC 3 and 4 conduct of credit brokers
- What we check
- Finance applications are completed accurately with the customer's real income and outgoings, never inflated to get an approval, and the customer understands what they are signing.
- What it can cost
- Inflated applications mean fraud exposure, loss of lender panels, and redress to every customer put into unaffordable credit.
- Evidence
- Application audit log
FCA-05Finance ads compliant72 hours
- The law
- Financial Services and Markets Act 2000 · Consumer Credit Act 1974 · FCA Handbook · CONC 3 financial promotions · Consumer Credit (Advertisements) Regulations 2010
- What we check
- Every finance advert (website, windscreen, social, portal listing) is clear, fair and not misleading, and shows a representative example with APR where required.
- What it can cost
- A non-compliant promotion is an FCA breach and a misleading advert under consumer law, with two regulators interested at once.
- Evidence
- Screenshots + approval log
FCA-06Vulnerable customers30 days
- The law
- Financial Services and Markets Act 2000 · Consumer Credit Act 1974 · FCA Handbook · FCA FG21/1 fair treatment of vulnerable customers · Consumer Duty consumer understanding and support outcomes
- What we check
- Staff can spot signs of vulnerability (financial difficulty, health, life events, low confidence) and adapt: more time, clear explanations, no pressure, and a record of what was done.
- What it can cost
- A pattern of pressure sales to vulnerable customers can lead to redress, a fine and loss of lender panels.
- Evidence
- Training + vulnerability log
FCA-07Complaints handled on time7 days
- The law
- Financial Services and Markets Act 2000 · Consumer Credit Act 1974 · FCA Handbook · DISP 1 complaint handling · Financial Ombudsman Service (FOS)
- What we check
- Finance complaints are logged, acknowledged promptly and resolved with a final response within 8 weeks, which tells the customer about their right to go to the Financial Ombudsman.
- What it can cost
- Every late complaint goes to the Financial Ombudsman, where the business pays a case fee whether it wins or loses.
- Evidence
- Complaints log + letters
How to run an FCA motor finance compliance audit, step by step
- Confirm what applies. This covers dealers acting as credit brokers; lending directly or selling insurance such as GAP brings further FCA rules.
- Walk the site, standard by standard. Score each of the 21 checkpoints Pass, Fail or N/A. N/A only where the standard rules it out, with the reason recorded. Sample finance deal files and check the commission disclosure, the affordability evidence and the income figures against what the customer provided.
- Capture the evidence. A pass counts only with proof captured at the time of the audit: the FCA register entry, disclosure documents, deal files, finance ads and the complaints log.
- Give every fail an owner and a fix time. Record what you saw and who owns the fix. Each standard carries an ideal fix time, from immediate to 30 days, counted from audit submission (see the table above).
- Fix it, then prove it. The site fixes the cause and uploads proof of closure; the auditor checks the proof before closing the finding.
- Re-check at the next audit. Confirm closed findings stay closed, and look for the same fail at your other sites so one gap doesn't repeat across the network.
Who this guidebook is for
- Dealer principals
- Business and F&I managers
- Compliance officers
- Auditors
A reference document, not legal advice. Fines and rules change: check the current text with the regulator or your legal adviser before acting.
