FCA Car Finance Commission Transparency
The Financial Conduct Authority (FCA) car Finance commission have to be made it crystal clear that firms must be upfront with customers about commission payments—and a recent Court of Appeal judgment has reinforced this. If you’re a motor finance firm, now’s the time to take commission disclosure seriously.
So, what does this mean for your business? Simply put, you need to be transparent about any commission you receive from lenders, explain how it’s calculated, and get clear consent from customers before finalizing a deal.
What’s Changing?
For a long time, many car buyers weren’t fully aware that brokers and dealers received commission from lenders when arranging their finance agreements. Even when disclosed, the details were often vague—leaving customers in the dark about how much commission was being paid and whether it influenced the deal they were offered.
That’s no longer acceptable. The FCA now expects firms to:
✅ Tell customers upfront that they WILL receive commission from the lender (not just that they “may”).
✅ Explain how the commission is calculated—whether it’s a fixed fee or linked to the loan amount.
✅ Disclose the exact commission amount once it’s known.
✅ Get informed customer consent before moving forward with the finance agreement.
Why Does This Matter?
Customers need to know whether the FCA car Finance commission being paid and affects their finance deal. If a lender pays a broker more for securing a higher interest rate, that’s something a customer should be made aware of before signing on the dotted line.
This is all about fairness and transparency—giving customers the information they need to make an informed decision. It also protects firms from legal trouble and potential complaints down the road.
What Should Motor Finance Firms Do Now?
🔹 Review your commission disclosure practices – Are you being fully transparent with customers? If not, it’s time to update your processes.
🔹 Check the FCA guidelines – The FCA has laid out exactly what firms need to do. You can find the full details here.
🔹 Keep records of customer consent – It’s not enough to just tell customers about commission—you need proof that they’ve understood and agreed.
🔹 Get expert advice if needed – If you’re unsure whether your current approach meets FCA expectations, seek professional guidance to ensure compliance.
The Risk of Getting It Wrong
Failing to follow these rules could lead to some serious consequences, including:
🚨 FCA fines and penalties
🚨 Customer complaints and legal challenges
🚨 Reputation damage
🚨 Potential compensation claims
Given the increased scrutiny on motor finance, firms that ignore these requirements could find themselves in hot water.
The Bottom Line
Customers deserve honesty when it comes to car finance deals. The days of vague commission disclosures are over—firms need to be fully upfront about what they earn and how it affects the customer’s deal.
By making commission disclosure a priority, firms can stay compliant, build trust, and avoid costly disputes. Take the time now to review your processes and ensure you’re meeting FCA expectations—it’s the right move for both your business and your customers.
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