“Super quick, I got lots of offers. All I had to do was choose which one! I went with Wisr because they were the cheapest. Thanks” - Angela
If you’re buying a used car, you’ll either be doing it through a private sale, or at a dealership.
If you’re getting your loan through a private sale, you’ll want to read our guide on buying a car privately.
If you’re planning on buying your car at a dealership, then this is for you.
Car dealers will generally offer vehicle finance to you as part of the car sale process.
It’s super convenient - - the dealership can act as a one stop shop for you.
You could be trading your current car to them, buying a new one and arranging the finance with them.
Of course, you’re not obligated to do this.
You should shop around for finance. With our Money Matchmaker™ it literally takes minutes and you could be saving $1000’s.
As mentioned, the main benefit of a loan from a dealership is convenience.
The downside is that you may end up paying much more for your loan than you needed to.
It’s that simple.
MoneySmart.gov.au also warns:
“Car dealerships will try to sell you add-on car insurance. This includes loan protection, gap cover, and tyre and rim protection. These products are not good value for money. Don't feel pressured to buy them.”
How do car dealers make money when I buy finance with them?
Dealerships can add on commission and fees to the finance being offered.
You always want to ask for the comparison rate as this is the actual rate you will be paying.
According to Deloitte, the income a car dealer makes from providing you with a loan could be as high as $2,700.
That’s a pretty big incentive to shop around and it certainly doesn't make the car you’re buying as cheap anymore.
The other thing to note is that car dealers may discount the car slightly with the hope of selling you car finance.
Long story short: do your research!
Turning up to the dealership pre-approved or knowing exactly how much you can borrow will give you greater negotiating power.
Alternatively, if you find your dream car at a dealer, you’re better to get the total cost of the car including all costs, and compare car loan offers online before committing to the purchase.
Go in with the best deal you can find before you purchase your vehicle, and make sure you’re **comparing similar options and products. **
Don’t be fooled by a lower repayment amount spread over a longer-term loan.
Calculate your total repayments and your total interest paid. Make sure there are no hidden fees that could make the loan more costly than it seems.
You should be able to find used car loans with no fees and the ability to make extra repayments without penalty using Money Matchmaker. Try by taking the quiz.
Get matched with real loan offers from up to 11 lenders, all at once.
We show you the best interest rates and repayments from each lender you match with
The rates are based on who you are and where you are at in life
No obligations, just the facts, make an informed choice
There are no middlemen, marked up pricing or broker fees. (We get paid by the lender)
Just like when you use a dating app or go to a broker, we use your answers to show you real lenders, real rates and actual repayments across all our lenders that you’re eligible for; without any broker fees or marked up interest rates.