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Car Loan Brokers in Australia: Pros & Cons

  • A car loan broker can help you find and apply for car loans through multiple lenders

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What is a car loan broker?

A car loan broker is someone who acts as the middleman between lenders and borrowers looking for car finance. In a nutshell, it’s the car broker's job to help people get the best finance to buy a car.

But, the actual role of a car broker is complex.

They use their expertise to find the best car loan for your individual circumstances, meaning they need to understand your finances and other needs.

Car loan brokers also need to be across lenders’ rules and products in a lot of detail. When you’ve decided on a loan, the broker will also help you with your application.

Pros & cons of using a car loan broker

Car brokers can help streamline the application process and may provide access to specialist loan products than borrowers could secure independently.

However, there are potential downsides to consider too. It's essential for borrowers to carefully weigh the benefits and drawbacks before deciding whether to enlist the services of a car finance broker.

Here are some notable pros and cons about using a car loan broker.

7 pros of using a car loan broker

Here are some advantages of using a car loan broker:

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Offer a personal service

A car loan broker can be helpful if you don’t know where to begin. They will spend time getting to know you and your specific needs.

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Can help with complex applications

Brokers are arguably most useful to non-standard car loan applicants. This could include people who need a bad credit or low doc car loan where factors like your car loan LVR can become important.

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They are regulated

Car brokers are regulated by the National Consumer Credit Protection Act 2009. It means there are strict rules for how they do business and offer services to borrowers. Legally they must find you the best deal they can.


Will help complete your application

Car finance brokers will help you find a loan and help you complete your application. This can save you time and make it more likely that you’ll be approved. This could mean less chance of your credit score being negatively impacted.


Familiar with a range of options

Brokers can help with standard car loans and those with features like balloon payments.

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Will recommend products

A broker will make a shortlist of suitable car loan products and will help you decide on the best one for you.

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A convenient process

A broker can do a lot of the work involved in finding car finance. They deal in car finance all the time, so will likely be able to navigate the process more efficiently than the average consumer. They could even help you down the track if you choose to refinance your car loan.

7 cons of using a car loan broker

While you may benefit from using a car loan broker, here are some disadvantages of using one:

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They can charge fees

In some cases, brokers charge fees for their services. This adds to the overall cost of your car finance. Others don’t charge fees and instead earn commission from lenders.

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May be influenced by commission

There's a chance that a broker’s car loan recommendations may be influenced by which lender pays them the best commission.

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Limited selection of lenders

Brokers typically only work with a selection of the lenders in the market. This means you may not be presented with all deals available to you.

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Not ideal for a fast car sale

Brokers need time to get to know your situation. If you need finance fast, a broker may slow things down compared to doing an online search to connect with a lender.


It’s yet another person/step to deal with

When you buy a car you’ll need to deal with a dealers or private car seller and several service providers. Working with a broker just adds another step.

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Not always a transparent process

It’s not unheard of for brokers to actually be owned by a lender, whose products they may recommend. This isn’t always clearly disclosed.

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Hard to find good brokers

Realistically, in the time it could take you to find a broker you’re happy with, you could have compared and applied for a loan by yourself.

How much do car brokers charge?

Not all car loan brokers charge their customers a fee, but for those that do, the cost can range from around $990 - $1,200.

You generally have the option of paying this fee directly to the broker and not adding it to your loan amount. If you choose to add it to your loan amount, you are also agreeing to pay interest on that amount over the loan term.

In addition to the car loan broker’s fees, there may be additional upfront fees payable to the lender.

Are car finance brokers worth it?

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If you have a good credit score (above 660) and are employed, you should be able to avoid the costs of a broker and find a good deal by yourself. However, if your situation is a little more complex (i.e. you’re self employed or have a poor credit history), then using a car broker could be beneficial.

It’s worth noting that online loan application forms are pretty streamlined these days. You can often apply for car loan pre-approval too which can make the process even easier.

This can be as simple as answering a few questions, then uploading some documents to show that you're eligible, and providing information about the vehicle you’re buying (if it’s a secured car loan).

There are also easy-to-use online tools, like car loan calculators, that can help you work out your car finance costs by yourself.

Compare your personalised car loan rates

See what car loan rates you actually qualify for by comparing multiple lenders at once.

5 key questions to ask your car broker

Working with a broker can help you get a good deal on a car loan with minimum risk or work on your part.

Here are some key questions to ask your broker:


How many lenders do they work with?


What fees do they charge and what commission do they earn from lenders?


How is the interest rate on the car loan assessed?


What fees are included in the loan?


What other types of finance are available?

With a little research online you can often find reviews of brokers from previous clients, and refine your search for a decent broker before you waste any time.

How to find a car loan broker in Australia

Car loan brokers are located throughout Australia, including Sydney, Melbourne, Brisbane, Adelaide, Perth, Canberra, Hobart and Darwin.

A simple online search should help you locate a car broker near you. Thankfully, most brokers are online and can help borrowers regardless of where you live in Australia.

Car loan guides & resources

Let us guide you on the road ahead with our simple calculators, comparisons and explainers.

FAQs about car loan brokers

Car brokers help you shop for car finance from a selection of lenders, whereas dealerships typically facilitate in-house financing from one partner lender, or the manufacturer’s own finance product.

For this reason, you generally have greater choice with a car loan broker, which may help you get a better deal.

Keep in mind, however, that brokers may charge fees and commissions for their services, potentially impacting the total car loan cost.

In a lot of cases, there is no cost to a borrower for using a car loan broker. However, some brokers do charge a fee for their services.

Brokers who do not charge a fee to customers generally earn money by receiving a commission from the lender whose loan the customer ultimately takes.

Car loan brokers are usually paid by the lender once the borrower’s loan application has been approved and finalised. Meanwhile some car brokers may charge a fee directly to their customers for their services. This fee is usually added to the overall cost of your car loan.

Money.com.au's Senior Finance Writer, Jared Mullane

Written by

Jared Mullane

Jared Mullane is a finance writer with more than seven years of experience at some of Australia’s biggest finance and consumer brands. His areas of expertise include energy, personal finance and insurance.

Sean Callery Editor Money.com.au

Reviewed by

Sean Callery

Sean Callery is the Editor of Money.com.au. He has over 15 years of international experience. He is qualified with a Certificate IV in Finance and Mortgage Broking (FNS40821) and is compliant to provide general advice in Tier 1 General Insurance (RG 146) products.


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