What's a Discretionary Commission Arrangement (DCA) and is my car finance impacted by the FCA's review?

What is a Discretionary Commission Arrangement?

On 11 January 2024, the Financial Conduct Authority (FCA) announced it would be reviewing a practice which it thinks may have led to some car finance customers being overcharged. The review focuses on ‘discretionary commission arrangements’ (DCAs).

DCAs allowed brokers to adjust the interest rate a car finance provider offered to a customer (a broker is the person who arranges your car finance, for example, your car dealer). Typically, the higher the interest rate, the more commission the broker received.

Is my car finance with Zopa impacted by the FCA’s review?

You may have been impacted if you purchased a vehicle with car finance before 28 January 2021 and a Discretionary Commission Agreements (DCA) was in place. This is more likely to be the case if you bought your car through a broker or dealer.  

If you used car finance to purchase a car after 28 January 2021, this won’t apply to you. This is because DCAs were banned by the FCA from this date.   

We’d need to review your specific car finance agreements in our system to confirm if you were impacted. If you think this might be the case, please get in touch via Martin Lewis’s Free Car Finance Reclaim Tool as it will direct your query straight to us. 

Link: https://www.moneysavingexpert.com/reclaim/reclaim-car-finance/ .

You can also give us a call and we can log an enquiry for you. Or you can email us at complaints@zopa.com.

I have a personal contract hire agreement, does the Discretionary Commission Agreements (DCA) review apply to me?

No, personal contract hire agreements don’t fall within scope of the Financial Conduct Authority (FCA) review so are not impacted.