ASIC has put the spotlight on the commissions that car dealers and finance brokers earn from arranging finance for car buyers saying that it will prohibit "flex commissions" in the car finance market.

The corporate watchdog is moving to ban "unfair" commissions which allow dealers to charge higher interest rates on car finance for a greater share of the interest earned.

Deputy Chair of ASIC, Peter Kell, highlighted that "flex commissions do not operate in a fair and transparent way, and ASIC's action will ensure that consumers are not charged excessive interest rates."