The FLA is the main representative body for the UK motor finance industry.
Its members consist of the captive finance arms of motor manufacturers, the motor finance subsidiaries of major banks and other independent lenders. The FLA's member finance companies represent over 90% of the UK's retail motor finance sector. FLA members fund over 90% of all private new car registrations.
All motor finance company members of the FLA must adhere to the FLA Lending Code which sets out standards of best practice in how the finance and leasing industry offers and sells finance to customers. This includes how finance is sold in motor dealerships, where the associated finance company is an FLA member.
The FLA's Codes of Practice
The FLA has two Codes of Practice: the Lending Code covers lending to consumers and the Business Finance Code covers lending to businesses. This material refers only to the Lending Code.
The FLA Lending Code reassures anyone applying for finance from an FLA member that they are doing business with a reputable lender. The Code clearly sets out all the key commitments and principles of lending which FLA member finance companies are expected to follow. Although following the Code is not a legal requirement for lenders – it is best practice – a business cannot become or remain an FLA member if it does not comply.
SAF Approved and the FLA Lending Code
In 2021 the FLA agreed a new provision requiring that members only arrange finance through SAF Approved intermediaries, or with firms that undertake equivalent training. The provision comes into effect from 1st January 2023 in relation to franchised dealer groups and sebrokers and from 1st January 2025 in relation to independent dealer groups.
The action taken aims to raise professional standards by requiring all industry staff, that arrange finance products, to undertake SAF learning or equivalent.