Car Loans Australia :: Articles
SHARE

Share this article!

When to use a Finance Broker for Car Loan Finance 

When to use a Finance Broker for Car Loan Finance 

Whether you're buying a car for the first time or you've been through the process before, it's always worth considering whether or not you should use a finance broker to arrange your car loan.
In this article, we'll weigh up the pros and cons of using a specialist finance broker so that you can make the best decision for your circumstances.

A Finance Broker, by definition, works for you, not the lender. They should have extensive knowledge of the different loan products on the market and can help you to find the most competitive interest rate.

When you work with a broker, you can expect the help and advice you need to find the right loan for your situation. They'll be able to explain everything about the loans they offer, including interest rates, repayment terms and how much you can expect to borrow.

Car Loans - Quick & Easy
If you are in the market for a new or used car, then we're in the market to help you arrange the money. Our car loan & leasing finance service is backed by a national panel of car loan specialists who will establish your eligibility, find lender/s offering the best deals for your situation - and help you through the approval and settlement process. No charge to you - and no obligation to proceed with any recommendations offered.

You don't need perfect credit or any credit at all — most brokers will consider your situation on an individual basis. This means that, if you have been turned down by other lenders or you've had issues making repayments in the past, then a broker may still be able to help you secure a deal.

As long as you are an Australian Resident, have been employed for at least three months and are over 18 years old, then there's no reason why a broker can't help.

Pros:

1. Access to a wider range of lenders:

By working with a finance broker, you'll have access to a wider range of potential lenders than you would if you were to apply for a loan on your own. This gives you a better chance of being approved for a loan the first time you apply.

It's important to remember that every loan enquiry that you make will be recorded on your credit file and could affect your credit rating ... whether you are approved or not.

If you make too many loan enquiries then it will become more difficult to obtain finance. A specialist Car Finance Broker will help protect your credit rating by applying only to lenders that are likely to approve your application, taking into account your specific circumstances.

2. Lower interest rates:

Because finance brokers have access to a wide range of lenders, they can often negotiate better interest rates on your behalf. This can save you money over the life of your loan.

Some of the lenders work exclusively through brokers and many others are accessible through brokers at wholesale or discount rates.

3. One-stop shopping:

Applying for a loan can be a time-consuming and complicated process.

By working with a finance broker, you can simplify the process and save yourself a lot of time and hassle.

4. Expert advice:

A finance broker can provide you with expert advice on the best loan options for your needs and situation. This can be extremely helpful if you're not sure where to start or what kind of loan structure would be best for you.

Cons:

1. Broker fees:

Some Finance Brokers will charge a fee for their services. This fee can range from a few hundred dollars to a few thousand dollars, depending on the size and complexity of your loan.

Whilst you may not be required to pay a fee upfront, out-of-pocket, it may be built into the loan - meaning that you will be borrowing the amount of the fee on top of the loan amount that you otherwise required.

If there are any broker fees payable, you should ensure that they reflect the interest rate savings, the advice, the convenience, lender access and the overall benefits that you would not have otherwise gained.

2. Time:

Working with a finance broker for the first time can take some time, as you'll need to provide them with information about your financial situation and goals.

If you're in a hurry to get a loan, working with a broker may therefore not be the best option for you. Whilst most brokers are well set-up for fast turnaround on loan approvals, in some cases, it may be quicker to phone your bank if you have a healthy relationship with them.

On the other hand, if you want the best deal, it would be well worth contacting a broker. Car loans can generally be approved and settled within a day or so.

3. Loan servicing:

Because they're not affiliated with any one lender, the Finance Broker may not be able to offer you the same detailed level of service or support that you would receive if you went directly to a bank or other financial institution.

So if you arrange your loan through a broker, you will still need to communicate with the lender directly on any administrative issues relating to your loan after it has been settled.

Conclusion

Whilst the benefits of using a finance broker to get a car loan far outweigh the downsides in the vast majority of cases, the decision on whether or not to use a finance broker to arrange your car loan is one that comes down to personal preference.

If you're comfortable doing your own research and you're confident you'll be able to find a good deal, then going it alone may be the best option for you.

However, if you feel like you need a bit of extra help to find the right loan, then using a broker may be the way to go.

Share this article:

Car Loans - Quick & Easy
If you are in the market for a new or used car, then we'd like to help you arrange the money. Our car loan & leasing service is backed by a national panel of car loan specialists who will establish your eligibility, find lender/s offering the best deals for your situation - and help you through the approval and settlement process. No charge to you - and no obligation to proceed with any recommendations offered.


Car Loans Articles

Car Financing: Top 10 Car Loan Questions Car Financing: Top 10 Car Loan Questions
There are a lot of factors to consider when taking out a loan for a car. In this article, we'll answer some common questions about taking out a loan for a car, so you can make the best decision for your situation. - read more
5 Simple Steps to Buy Your Dream Car Now 5 Simple Steps to Buy Your Dream Car Now
For many people, owning a car is a symbol of success and freedom. It’s a way to show the world that you’ve made it. But for others, the prospect of owning a car is a distant dream. If you’re in the latter group, then this guide is for you. - read more
How To Get The Best Deal On A New Car Loan How To Get The Best Deal On A New Car Loan
The process of buying a new car is an exciting time, however it can also be a bit stressful, especially when it comes to financing. With so many options on the market, it can be difficult to know how to get the best deal on a new car loan. - read more
Car Leasing Car Leasing
Leasing is an often misunderstood car financing option so, in response to subscriber feedback, we've included this article to help give you a better understanding of what it is and how it works. - read more
When to use a Finance Broker for Car Loan Finance  When to use a Finance Broker for Car Loan Finance 
Whether you're buying a car for the first time or you've been through the process before, it's always worth considering whether or not you should use a finance broker to arrange your car loan. In this article, we'll weigh up the pros and cons of using a specialist finance broker so that you can make the best decision for your circumstances. - read more

Finance News

Interest rates up another 50 basis points with more hikes to come Interest rates up another 50 basis points with more hikes to come
03 Aug 2022: .

As expected, the Reserve Bank of Australia (RBA) raised interest rates by another 50 basis points this month. The fourth rate hike in as many months, today’s decision takes the cash rate from an emergency low of 0.1% to 1.85%. - read more
Business loans on the rise while mortgage growth remains flat Business loans on the rise while mortgage growth remains flat
02 Jun 2022: .

Australian business loans growth accelerated in April as mortgage growth stayed consistent, with major banks growing at less than the system average according to latest RBA data. - read more
Homebuyers up in the air despite new  government home loan support Homebuyers up in the air despite new government home loan support
29 May 2022: .

The government's promise of an equity contribution will help the most disadvantaged Australians to get a home loan, but they still won't be able to afford one. - read more
RBA lifts official interest rate RBA lifts official interest rate
03 May 2022: .financialservicesonline.com.au

The Reserve Bank of Australia lifted the official cash rate by 25 basis points at its meeting Today. - read more

Need Help Finding a Loan?
Get a free car loan eligibility assessment and compare offers tailored specifically to your circumstances.
Loan Amount:
Postcode:
All finance quotes are provided free (via our secure server) and without obligation.
We respect your privacy.

Knowledgebase
Debt Consolidation:
Debt consolidation usually involves negotiating a new loan to pay other existing loans in order to get more favourable interest rates and terms.