UK drivers have unknowingly paid an estimated £8.1 billion in hidden car finance commissions over the last 14 years, according to figures from claims specialist TotalClaim.
From 2007 to 2021, car dealerships used Discretionary Commission Arrangements (DCAs), which allowed them to increase customers’ interest rates to boost their own commissions — often without the customer being aware.
The Financial Conduct Authority (FCA) banned this practice in January 2021, revealing that 14.6 million car finance agreements were affected, with motorists overpaying an average of £1,100 each due to mis sold car finance deals.
- High Interest Rates: APR above 4.9% may indicate inflated rates to generate higher dealer commission.
- No Commission Disclosure: Dealers should have clearly explained they were earning commission from an agreement.
- Inadequate Affordability Checks: Rushed assessments without proper income verification may indicate poor practice.
- Pressure to Accept Dealer Finance: Being discouraged from seeking independent funding could indicate commission-driven selling.
- Multiple Vehicle Purchases: Each finance agreement between 2007-2021 could generate separate compensation.
One customer told us he specifically asked about commission and was told there wasn’t any. We found evidence he paid £1,800 in hidden charges across two agreements. – Mark Henry, Total Claim
