Menu

Australian Car Finance Fees Explained

When looking for car finance, many people look at the interest rate first. While you may think that you are getting a great rate, by the time you factor in extra fees, you may not actually be getting as good a deal as you thought.

Exactly what fees you need to pay will depend on the lender that you choose, so it’s important to ask what these are upfront before you commit to anything.



What are the Common Car Finance Fees?

These are fees that you will most often see when applying for a car loan in Australia.

  • Lender or application fees: This is a one-off fee that you will pay when you apply for a loan to cover processing costs.
  • Monthly or yearly account fees: Administration costs to pay in addition to your monthly loan payments
  • Exit fees: If you decide to pay off your loan early, you may be subject to an early termination fee. This is to cover the interest that the lender misses out on.
  • Late payment fee: Missing a payment and paying it late will most likely incur a penalty. Some loans may have one fee, while others will keep adding the longer you leave making the payment. Remember that having a history of late payments will affect your credit rating.
  • Registration fees: At the time of setting up your loan, there will be fees payable to your State or Territory in order to put the car on the government register.
  • Car Insurance: while not a fee and

Some lenders may insist that you take out loan protection insurance, shortfall insurance, or mechanical breakdown cover. These are not essential so don’t fall for a trap by paying extra money when you don’t have to. However, some of these products could be beneficial to you so ask your broker for more information.


How can I get the least fees possible?

When you are applying for a loan through a broker, you can let them know what you want and what you don’t want when it comes to obtaining car finance. As well as discussing interest rates and terms, you can let the broker know if you’d prefer not to have extras like monthly account fees or early termination fees.

This is something that is generally not possible when applying through your bank or a dealership since they will be restricted with their loan products.

Once the broker understands what you are looking for, they will be able to find the best loan structure to suit your needs.


Looking for low fee car finance?

Our team at Auto Car Loans know that nobody likes any nasty fee surprises when taking out car finance. We like to be upfront, so you know exactly how much you’ll be paying before you sign on the dotted line. For more information on how we can help you secure the best deal on your car finance, give us a call on 1300 301 051 or drop us a line through our contact page.


Sources:
https://rac.com.au/car-motoring/info/finance/car-loan-rates-and-fees
https://www.moneysmart.gov.au/tools-and-resources/publications/factsheet-car-loans