In short: almost every car finance lender and broker operating in the UK must be authorised by the Financial Conduct Authority (FCA), which sets rules on how they assess affordability, disclose costs and commission, and handle complaints. Being "FCA regulated" is not a marketing badge — it's a legal requirement, and it gives you specific, enforceable rights as a borrower.
What "FCA authorised" actually means
The FCA is the UK's financial regulator. A firm offering Hire Purchase, PCP or other regulated consumer credit agreements must hold the correct permissions from the FCA to do so. This isn't optional or a one-off certification — authorised firms are subject to ongoing supervision and must continue meeting the FCA's rules to keep operating.
How to check a lender or broker is actually authorised
Search the firm's name on the FCA's Financial Services Register, a free, public tool on the FCA's own website. It shows the firm's authorisation status, what regulated activities it can carry out, and its official Firm Reference Number (FRN). If a firm quotes an FRN, you can cross-check it directly on the register rather than taking the number at face value.
Broker vs direct lender: what's the practical difference?
A direct lender provides the money itself — your agreement, and your ongoing relationship for payments and complaints, is with that firm. A broker doesn't lend directly; it places your application with one of several lenders on its panel and is usually paid a commission by whichever lender accepts you. Both types must be FCA authorised, but knowing which one you're dealing with matters if something goes wrong, since your first complaint should go to whichever firm you have the direct relationship with.
The Consumer Duty: what firms are now required to do
Since 2023, the FCA's Consumer Duty has required regulated firms to act to deliver good outcomes for customers — covering the products themselves, the price charged relative to the value received, how clearly terms are communicated, and the quality of ongoing customer support. In car finance, this underpins expectations like clear disclosure of representative APR, no pressure to accept unaffordable terms, and accessible complaints handling.
What protections this gives you as a borrower
- A legal right to a clear explanation of the total cost of credit and representative APR before you sign.
- An affordability assessment before an agreement is offered — a firm shouldn't lend you more than you can reasonably afford to repay.
- A formal, time-bound complaints process (firms generally must respond within 8 weeks).
- Free access to the Financial Ombudsman Service if you're not satisfied with how a complaint was handled.
What to do if a firm doesn't meet these standards
Complain to the firm directly and in writing first. If you don't get a response within 8 weeks, or you disagree with the outcome, you can escalate free of charge to the Financial Ombudsman Service, which can independently investigate and, where justified, order compensation.
Think you're owed money from a past agreement?
See our step-by-step guide to the FCA motor finance redress scheme and how to check if you're covered.
How to Claim FCA Motor Finance Redress