Definition (one sentence). A discretionary commission arrangement (DCA) was a deal between a lender and a car dealer/broker that let the dealer choose your interest rate within a range — and earn more commission the higher the rate they set.
Why that's a problem. Your interest rate could be pushed up not because of your credit risk, but to boost someone's commission — usually without you being told. The FCA banned DCAs on 28 January 2021, but agreements from before then are the core of the mis-selling concern.
How do I know if I had one? You often won't from the paperwork alone — that's the point. Signs: car finance (PCP or HP) arranged by a dealer between roughly 2007 and early 2021, with no clear explanation of commission. The way to find out is to ask your lender (a free complaint) or check the FCA's guidance.
FAQ.
- Are all car finance deals DCAs? No. DCAs are one type of arrangement. Non-DCA commission cases can still be unfair if commission was hidden, but DCAs are the central concern.
- Were DCAs illegal? They weren't outright illegal at the time, but hiding them could make the relationship "unfair" under the Consumer Credit Act — which is what the courts and FCA have been addressing.
- What if my finance was after January 2021? DCAs were banned then, so a post-2021 agreement is less likely to involve one — but other undisclosed-commission issues can still apply.
- How do I complain? Free: complain to your lender/broker, then escalate to the Financial Ombudsman Service if needed. No claims company required.
Full explainer: Motor finance mis-selling, made simple