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Q&A outlining new FLA requirements - is your dealership or brokerage SAF Approved?

Q&A outlining new FLA requirements - is your dealership or brokerage SAF Approved?

A Q&A explaining new requirements agreed by FLA members that aim to raise industry professional standards

What is changing?

FLA members (the vast majority of UK motor finance providers) have agreed a new provision that has been added to the FLA's Lending Code.  The Lending Code outlines contractual obligations lenders have as FLA members (conditions of membership).  One new provision, which aims to raise industry professional standards, is that FLA members can only arrange finance through dealer groups and brokers that are SAF Approved or if the firm is accredited under an equivalent training or competence scheme.

When will these changes take effect?

Franchised dealers and brokers will be required to become SAF Approved or equivalent by 1 January 2023 and independent dealers by 1 January 2025.

What action does my firm need to take?

  • SAF Approved already - If your firm is already SAF Approved and your firm's SAF administrator can download a SAF Approved certificate from the SAF Expert test centre  then you don't need to do anything other than provide this to lenders that may ask for it.
  • 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 the sale of motor finance have passed the SAF Expert test so you can apply for SAF Approved certification.
  • 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).
  • Using other finance training?  - If your firm is using alternative motor finance training then we will be introducing a process in 2022 to confirm recognition of SAF Approved equivalent training.  Please notify us by e-mailing saf@fla.org.uk if this is the case.

What is SAF?

The FLA introduced Specialist Automotive Finance (SAF) in 2007 to help raise the standard of car finance information provided in showrooms for the benefit of car buyers. SAF is entirely funded by FLA member finance companies who want to increase confidence in car finance.  The majority of the top 50 franchised dealer groups use SAF along with another 1,400 firms made up of retailers, brokers and lenders.  There are over 36,000 industry staff registered to take the SAF Expert test.  Further FAQs about all elements of SAF can be accessed here.

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 free online motor finance learning supported by an annual competency test for industry professionals.  It provides learning on all of the key categories of products provided by motor 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 voluntarily put all of their customer facing staff, involved in the sale of motor finance, successfully through the SAF Expert test.  It is an initiative primarily designed for dealer groups and brokers to gain knowledge of motor 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 firms. This aims to further raise professional standards in the provision of motor finance to consumers which the industry’s regulator, the Financial Conduct Authority (FCA) and its final findings on motor finance fully supports.  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 dealer groups and brokers to achieve this.

What training is ‘equivalent’ to SAF Expert and SAF Approved?

This has yet to be defined by the FLA but other training provided in the industry will meet the FLA’s Lending Code requirement so long as it gives the learner a similar level of motor finance knowledge.  The FLA will be defining an equivalency framework in 2022 and lenders and the FLA will be providing information packs on this and all of the above to further clarify what is required.