Discretionary Commission Arrangements (DCAs) are at the heart of the car finance scandal affecting millions of UK consumers. Here's what you need to know. For a complete overview of all claim types, see our car finance compensation guide.
What Were DCAs?
DCA (Discretionary Commission Arrangement)
A commission structure that allowed car dealers and brokers to increase your interest rate to earn higher commission - without telling you. The more they charged you, the more they earned.
Discretionary Commission Arrangements were commission structures that allowed car dealers and brokers to adjust your interest rate to increase their earnings.
The Core Problem
The key feature of DCAs: the higher the dealer set your interest rate, the more commission they earned. This created a fundamental conflict of interest - your broker was incentivised to charge you more, not find you the best deal.
How Did DCAs Work?
Here's how the process typically worked:
How DCAs Inflated Your Interest Rate
Why Were DCAs Problematic?
Why DCAs Were Harmful
Pros
- •Easy finance approval process for consumers
- •Dealers had flexibility in structuring deals
Cons
- •Brokers incentivised to charge you more, not find best deals
- •Most consumers had no idea their rate was inflated
- •No disclosure of commission arrangements
- •Supreme Court ruled it created "unfair relationships"
The Supreme Court Ruling
The Supreme Court ruled in August 2025 that certain arrangements constituted an "unfair relationship" under the Consumer Credit Act 1974 - a landmark decision that opened the door for compensation claims.
When Were DCAs Used?
DCAs were widely used in the car finance industry from approximately 2007 until they were banned in January 2021.
Important Deadline
The FCA redress scheme launches in May 2026. If you had car finance between 2007-2021, you should check your eligibility now to be at the front of the queue. Learn more about the FCA redress scheme.
The FCA's Action
FCA Response to DCAs
How Much Were Brokers Earning?
While commission levels varied, brokers could earn significant amounts:
- Commission was often a percentage of the total interest paid
- Higher interest rates = more total interest = more commission
- Some arrangements paid thousands of pounds per vehicle
Typical DCA Impact
If your broker increased your interest rate by just 2%, on a £15,000 car loan over 4 years:
- Extra interest paid: approximately £1,200-£1,500
- Broker commission from this increase: £300-£500+
- You paid more, broker earned more, lender was indifferent
Am I Affected by DCAs?
You May Be Eligible to Claim If:
- Had car finance between 2007-2021
- Were not told about commission arrangements
- Were not given the opportunity to negotiate your interest rate
- Paid interest on your car finance agreement
- Your finance was arranged through a dealer or broker
Types of Finance Affected
DCAs could be present in various types of car finance:
- Personal Contract Purchase (PCP) - The most common type affected (see our PCP claims guide)
- Hire Purchase (HP) - Traditional finance agreements
- Personal Loans (arranged through dealers)
- Lease agreements (some types)
Check If You're Affected
Find out in minutes if your car finance agreement included a DCA. We'll help you understand your options.
Check My EligibilityWhat Happens Next?
The FCA redress scheme launching in May 2026 will:
- Set out clear methodologies for calculating compensation
- Create a presumption of harm where disclosure was inadequate
- Allow lenders to rebut this presumption with evidence
- Provide clear routes for consumers to claim
Can I Claim Now?
Yes - Get Ahead of the Queue
While the formal redress scheme launches in May 2026, you can submit your claim details now to be at the front of the line. Given the volume of claims expected—up to 14 million potentially affected consumers—early action is advisable.
How to Start Your Claim
Getting Help
Our No Win, No Fee Service
At My Claims Centre, we handle the entire claims process for you. We use soft credit checks to find your agreements, deal with lenders on your behalf, and work on a no win, no fee basis.
Important: You don't have to use a claims management company—you can submit claims yourself for free. But many people prefer professional help navigating the process.
Important Timeline
Key Dates
Related Resources
Learn more about car finance claims:
- Car Finance Compensation Guide - Complete overview of all claim types
- PCP Claims - Specific guidance on Personal Contract Purchase claims
- FCA Redress Scheme 2026 - Details on the upcoming compensation scheme
- Mis-Sold Car Finance - How to identify mis-selling
- Black Horse Finance Claims - Claiming against one of the UK's largest lenders
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Source Note: All information in this article is based on FCA publications, court rulings, and the Motor Finance Redress documentation. No speculative claims or unverified statistics are included.