What is a Discretionary Commission Arrangement?

Updated 12 days ago

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.

Was this helpful?