How to check a car dealer

Most dealers are what they say they are. A few are not, and the difference is usually visible in the public registers before you hand over a penny. Five things to look at.

FCA authorisation

If they offer finance, they must be authorised by the Financial Conduct Authority. Selling finance without authorisation is illegal, and authorisation is what gives you the Financial Ombudsman if things go wrong.

Companies House

Whether they are a registered company, how long they have been trading, and whether the directors or the company name have changed often.

Reviews

Google, Trustpilot and Auto Trader. Be wary of very few reviews, or only recent five-star ones.

Premises

A forecourt or a residential address? Meet at the business address, not halfway.

Trader schemes

Membership of an approved scheme such as Trading Standards’ Buy With Confidence.

Red flags

• Cash only
• No paperwork or receipt offered
• Pressure to decide today
• No independent inspection allowed
• A very new company, or one dissolved and re-formed
• Several businesses at one residential address
• Reviews that don’t add up

Why FCA authorisation matters

A dealer who arranges finance, whether PCP, HP or a loan, must be authorised by the Financial Conduct Authority. That authorisation is what gives you the Financial Ombudsman as a free route if things go wrong, and it puts the lender on the hook for the car’s quality on PCP and HP.

It also matters if the dealer later closes. On PCP, HP and conditional sale the finance company legally supplied the car, so your rights run against them even after the dealer has gone. Our guide to rejecting a car on finance covers how that works.

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