How does using a car loan broker work?

When you use a car loan broker from Money.com.au, the process includes an initial consultation, loan comparison, tailored recommendations, application assistance, approval, securing the vehicle, and finally funds being disbursed to either you or the dealer.

Do car finance brokers charge fees?

Most car loan brokers offer their services for free to buyers and are paid commissions by lenders. Some brokers may charge fees via dealerships, so review your contract carefully.

Car Loan Brokers in Australia: Pros & Cons Explained

What is a car loan broker?

A car loan broker helps you find and apply for car finance by understanding your needs and comparing suitable options from multiple lenders. They act as a middleman between borrowers and lenders, aiming to secure the best deal for your needs.

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, credit history, the car you’re buying and more.

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.

If you work with a car loan broker from Money.com.au, here’s what to expect:

1

Consultation

After you make an online enquiry, one of our brokers will get in touch. During the initial consultation, you’ll discuss your goals and car preferences. We’ll also ask for details like your location, financial situation, employment status and credit history to help us better understand your overall position.

2

Loan comparison

Based on the information you provide, our brokers compare offers and rates from various lenders to find suitable loan options. We look at car loan interest rates, fees, terms and any specific conditions to identify the most competitive deals applicable to you.

3

Recommendations

We present the top car finance deals based on your needs and eligibility. Our brokers explain why each option is recommended and break down the key features so you can make a confident, informed decision.

4

Application

Once you’ve chosen a loan, your broker will assist with the application process. This includes gathering required documents like pay slips, bank statements, and proof of ID. If you’re self-employed and applying for a low doc car loan, you may need to provide alternative paperwork such as tax returns or business statements.

5

Approval

If your application is approved, the lender will forward on the contract. It typically includes all the key details – interest rate, comparison rate, loan term and more. Once signed, you're ready to purchase your car up to the approved limit.

6

Secure the vehicle

Once you've chosen a car – whether from a dealer or a private seller – you’ll sign a contract of sale, subject to finance approval and a test drive. From there, your broker will either request a tax invoice from the dealer or collect the necessary documents from the private seller.

7

Funds disbursed

The lender will release the funds – either directly to your nominated bank account or to the car dealer. This usually takes 2–3 business days, depending on the lender and the strength of your application.

Pros and cons of using a car loan broker

Pros

A broker can guide you if you’re unsure where to start, taking time to understand your needs and financial position.

They enable you to check your rates with multiple lenders without it impacting your credit score.

They’re especially helpful for when you’re short on time, have bad credit or are self-employed.

Brokers are regulated under the National Consumer Credit Protection Act 2009, ensuring strict conduct on how they do business and recommend products.

They help you find a suitable loan and assist with the application process, saving you time and hassle.

A broker can explain key loan features, like redraw options or balloon payments, to help you make informed choices.

They understand lender policies and turnaround times, which is helpful if you need finance approved quickly.

Cons

Although brokers have access to multiple lenders, they don’t cover the entire market, so you might miss out on better deals elsewhere.

If you prefer a hands-on approach, relying on a broker may leave you feeling out of the loop at certain times during the loan process.

The quality of service can vary significantly based on the broker’s expertise, professionalism and communication skills.

Brokers rarely charge upfront fees, but in some cases there could be a brokerage fee added to your finance amount which would add to your costs.

The trade off with getting personalised guidance and a detailed comparison of multiple lenders is that working with a car loan broker is likely to be a slower process versus doing a quick online application directly with a lender.

Most car loan brokers offer their services for free to car buyers as they earn their income through commissions paid by lenders. Once a loan is approved and settled, the broker receives payment – either as a flat fee or a percentage of the loan amount.

These commissions are usually built into the overall cost of the loan, often absorbed within the closing fees or interest rate, meaning you (the borrower) ultimately covers the cost indirectly.

In some cases, car loan brokers may have arrangements with dealerships where they charge a fee for referring customers. This cost can be passed on to you – often without being clearly disclosed – so it's important to carefully review your loan contract before making a decision.

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

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Are car finance brokers worth it?

Car finance brokers can be a great option if you're short on time, unsure how to navigate the loan process, or just want someone with insider knowledge to help you find a suitable deal.

They can take the hassle out of comparing loans, assist with paperwork, and guide you through the approval process – especially helpful if you’re not confident handling financial documents or negotiating terms. Their experience can be valuable in matching you with lenders that fit your specific circumstances.

If you prefer to take control, enjoy researching your options, or want to compare finance deals from lenders who don’t work with brokers, going direct might suit you better. Most brokers only work with a panel of lenders, which means you could miss out on better deals elsewhere. For people who don’t mind comparing offers themselves, a broker may not be necessary.

It’s also worth noting that online loan application forms are pretty streamlined these days. You can often apply for car loan pre-approval, which can make the process even easier. This usually involves answering a few simple questions, uploading documents to prove your income and identity, and providing details about the vehicle you’re buying (if it’s a secured car loan). For some buyers, that ease and accessibility make going solo a perfectly practical choice.

If you’re looking to crunch numbers, use our car loan calculator to get an estimate of your repayments, plus the interest you’ll pay over the loan term.

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FAQs about car loan brokers

Is a car broker better than a dealership?

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

How do car loan brokers get paid?

Car loan brokers are usually paid by the lender once the borrower’s loan application has been approved and finalised. In rare situations, 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.

How much do car loan 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.

How do I know which lenders a car loan broker works with?

Most car loan brokers will be transparent about which lenders they have access to and can compare rates and deals from. While they don’t work with every lender in the market, a good broker will still assess how their panel compares to broader options to help ensure you're getting a competitive and fair deal.

What’s the best way to find a car broker in Australia?

Do some research online and check out customer reviews to see how different brokers have helped clients with their car finance needs. Most car loan brokers are easy to reach by phone or email, and you should have no trouble finding one – whether you’re in Sydney, Melbourne, Brisbane, or anywhere else in Australia.

Should I use a car loan broker if I have bad credit?

Using a car loan broker can be a smart move if you have bad credit. Brokers often have access to specialist lenders who are more open to working with borrowers in challenging financial situations.

They can help match you with a suitable lender, improve your chances of approval, and guide you through the application process to avoid common pitfalls. This might include applying with the wrong type of lender, which can result in unnecessary rejections that can negatively impact your credit score further.

Another common mistake is agreeing to high-interest loans with hidden fees or unfavourable terms simply out of desperation. A broker can help you avoid these traps by explaining the fine print, comparing offers from multiple lenders and making sure the loan repayments are manageable.

How do car loan brokers act in my best interests?

Car loan brokers are legally bound to act in your best interests under the National Consumer Credit Protection Act 2009. This means they must recommend loan options that genuinely suit your needs and financial situation, rather than ones that simply benefit them. They’ll assess your circumstances, compare suitable loans from their panel and guide you toward a solution that fits your goals and budget.

Can car loan brokers help me get a better interest rate?

Yes, car loan brokers can often help you secure a more competitive interest rate by comparing offers from multiple lenders and negotiating on your behalf.

That said, interest rates aren't the whole picture when it comes to car loans.

It's important to look at the comparison rate, which includes fees and gives a clearer view of the total cost. You should also consider how flexible the loan is, especially if you plan to make extra repayments or pay it off early to save on interest. Other factors, like how easy the lender is to contact and the quality of their customer service, can also make a big difference.

Can a broker help me finance a used car?

Yes, a car loan broker can help you secure finance for a used car. They can connect you with lenders that offer competitive rates and terms for used vehicles – often similar to those available for new or demo cars – depending on the age and condition of the vehicle.

A Guide to Car Loan Brokers in Australia