What a discretionary commission arrangement was
Under a discretionary commission arrangement (DCA), the lender let the dealer choose your interest rate within a range. The higher the rate the dealer chose, the more commission the lender paid it.
That gave the dealer a reason to charge you more, and you usually weren't told. Two customers with the same credit history could pay quite different rates for the same car depending on what the dealer chose.
How it worked
When DCAs were banned
The FCA banned discretionary commission arrangements in motor finance from 28 January 2021. It said they gave brokers an incentive to act against customers' interests, and estimated the ban would save customers about £165 million a year. Agreements with a DCA taken out before the ban can be covered by the compensation scheme.
Why DCAs matter for your claim
Under the FCA's scheme, a DCA that wasn't adequately disclosed makes an agreement unfair. The FCA's view is that DCAs were generally not disclosed properly, so lenders can't routinely reject these claims on that basis.
You don't need to know whether your agreement had a DCA. Lenders hold that information, and it comes out when your complaint is assessed.
Sources
Checked on 7 October 2026 against:
Questions people ask
How do I know if my agreement had a DCA?
You usually can't tell from the paperwork. The lender knows which arrangement applied, and has to check when it assesses your complaint.
Is a DCA claim different from a car finance claim?
No. A DCA is one of the reasons an agreement can be treated as unfair. High commission and undisclosed ties between dealer and lender are the others.
My finance was after January 2021. Can I still claim?
Not for a DCA, because they were banned from 28 January 2021. But agreements up to 1 November 2024 can still be covered if the commission was high or there was an undisclosed tie.
You don't have to use a claims management company. You can complain to your lender, and then to the Financial Ombudsman Service, for free.