What is changing?
FLA members, who make up the vast majority of UK vehicle finance providers, have agreed a new provision that has been added to the FLA's Lending Code. The Lending Code outlines various contractual obligations lenders have as FLA members (conditions of membership). One new provision, which aims to further raise industry professional standards and support compliance with the FCA’s new Consumer Duty, is that FLA members can only arrange finance through intermediaries (dealers and brokers) that are SAF Approved or ones accredited under an equivalent training and competence scheme.
When will these changes take effect?
Franchised dealers and brokers arranging finance on new or used vehicles will be required to become SAF Approved or equivalent by 1 January 2023 and independent used vehicle dealers by 1 January 2025.
What action does my intermediary firm (dealer, retailer or broker) need to take?
Scenario 1 - SAF Approved already. If your firm is already SAF Approved, your firm's SAF administrator can download a SAF Approved certificate from the SAF Expert test centre. You can then provide this to lenders that may ask for it. Shortly we will enhance the site your administrator uses to allow them to ‘tag’ all the FLA members you work with. That crucial, accurate and regularly updated tagging will then allow FLA members to see that you are SAF Approved so their relationship with you can continue under the Lending Code provision.
Scenario 2 - Using SAF but not yet SAF Approved. If you are using SAF but are not yet SAF Approved then you will need to ensure all customer facing staff involved in discussions (face to face, over the telephone or online) with customers on the subject of finance have passed the SAF Expert test. Once they have, you can apply for SAF Approved certification. Shortly we will enhance the site your administrator uses to allow them to ‘tag’ all the FLA members you work with. That crucial, accurate and regularly updated tagging will then allow FLA members to see that you are SAF Approved so their relationship with you can continue under the Lending Code provision.
Scenario 3 - Not yet registered on SAF. If your firm has not yet registered to use SAF then please take steps to do so (see further information below). Once registered you will need to ensure all customer facing staff involved in discussions (face to face, over the telephone or online) with customers on the subject of finance have passed the SAF Expert test. Once they have you can apply for SAF Approved certification. Shortly we will enhance the site your administrator uses to allow them to ‘tag’ all the FLA members you work with. That crucial, accurate and regularly updated tagging will then allow FLA members to see that you are SAF Approved so their relationship with you can continue under the Lending Code provision.
Scenario 4 - Using other finance training? If your firm is using alternative vehicle finance training that you or your supplier believes to be equivalent to SAF Approved then we will shortly be introducing a process to award equivalence status to that training. To ensure you or your training supplier receives details of the equivalence process and requirements as soon as they are available please notify us that you wish to receive them by e-mailing saf@fla.org.uk. Where it is more appropriate for your training supplier to receive them, please ask them to email the same address as soon as possible. Should the supplier of the learning programme not apply for equivalence or if the FLA are not able to award equivalence due to the requirement to be at the same standard of learning and testing as SAF Approved, you will need to become SAF Approved by the deadline relevant to your business (which is 1 January 2023 for franchised dealers and brokers and 1 January 2025 for independent dealers).
What is SAF?
The FLA introduced Specialist Automotive Finance (SAF) in 2007 to help raise the standard of finance information provided in showrooms and online for the benefit of customers. SAF is currently entirely funded by FLA member finance companies who want to increase customer confidence in retail vehicle finance. There are over 40,000 industry staff registered to take the SAF Expert test. To supplement the Lending Code provision, further details are provided below. Further FAQs about all elements of SAF can be accessed here.
How is SAF changing to reflect the Lending Code requirements?
The FLA recognise that the Lending Code requirement, for its members to only have relationships with SAF Approved or equivalent intermediaries, means SAF needs to further evolve. The main change will be the introduction of two levels of approval – SAF Expert Approved and SAF Essentials Approved.
Which level approval will my intermediary business need to attain?
SAF Essentials Approved is designed for those intermediaries who do little in the process of providing customers with finance information other than collecting their contact details and providing them to the finance company they work with. For this to be the right level of SAF approval for your intermediary business the finance company who is a FLA member then needs to complete all other communications with the customer.
SAF Expert Approved will be needed by all other intermediaries who take responsibility for elements of the finance communication to customers and have a relationship with FLA lender members.
How is SAF Expert Approved changing?
SAF Expert Approved is changing in response to feedback from intermediaries. That means that you can either:
- have your customer facing team members complete the programme of learning in full. This remains the recommended approach, so your team achieve the highest level of professional standards SAF offers, or
- you will be able to set the SAF learning management system to give your team a programme of learning that includes product knowledge only on products you offer to customers. We will post a message to this SAF website as soon as this tailored option is available.
How do I start setting up my staff on SAF?
A guide outlining how you can set up your company’s SAF account up is here.
What is SAF Expert?
SAF Expert is online vehicle finance learning supported by an annual competency test for industry professionals. It provides learning on all of the key categories of products provided by finance firms and the regulations they, and other motor finance processes, are governed by. The training material and test is accredited by The London Institute of Banking & Finance. For more information, please click here.
What is SAF Approved?
SAF Approved provides certification to companies who have put all of their customer facing staff, involved in discussions with customers on vehicle finance, successfully through the SAF Expert test. It is an initiative primarily designed for intermediaries (dealers and brokers) to gain knowledge of vehicle finance, promote their expertise and credibility and give confidence to customers. For further information please click here.
Why the requirement to become SAF Approved or equivalent?
FLA members (finance providers) have agreed a new provision added to the FLA’s Lending Code that requires that they will only arrange finance through SAF Approved or equivalent firms. This aims to further raise professional standards in the provision of vehicle finance to consumers and support compliance with the FCA’s new Consumer Duty. Further FAQs on the Lending Code are provided here. High standards of finance provision lead to better customer outcomes and more repeat sales. The SAF initiative helps to provide the knowledge for intermediaries to achieve this.
What training is ‘equivalent’ to SAF Expert and SAF Approved?
The awarding of equivalence to SAF will be simple to apply for by other training providers, intermediaries or FLA members if they believe their own programme of learning is at or above SAF Approved standard. An equivalence methodology and requirements will be confirmed shortly. See Scenario 4 above. The FLA will be defining an equivalence framework without delay and the FLA will be providing information packs on this and all of the above to further clarify what is required to those who request them.
I have further questions not covered here including how my finance partners are planning to adhere to the Code, how do I receive the details I need?
For questions on the SAF programme that aren’t covered here or in the FAQs on this site please email your questions to saf@fla.org.uk.
For questions on the plans of individual FLA members to comply with the Lending Code please contact your business-as-usual contact at the relevant FLA member. Because your original equipment manufacturer finance company will be proactively contacting franchised intermediaries and brokers very soon, to confirm your approach to becoming SAF Approved or maintaining that status if you are already approved, you may wish to ask your questions at the point they contact you in the next few weeks.