What is a Car Finance Broker?

If you’re looking to buy a new or used car and you need to borrow money to do it, you can either arrange the finance yourself or get a car finance broker to do it for you.

Read on to find out everything you need to know about car finance brokers in Australia.


What does a finance broker do?

The Australian financial services industry is regulated to help protect consumers. Let’s look at the definition of a finance broker from the federal government’s ‘moneysmart’ website.


Define broker

A finance broker is “a go-between who negotiates with banks and other credit providers to arrange loans on behalf of others”. In other words, a finance broker is an intermediary between a borrower and a lender.

Importantly, finance brokers’ clients are borrowers, not lenders. This means that they work for you as the borrower, not for the lender. They will know what lenders have the better rates on the market, and which lenders are likely to offer you the best rate based on your personal situation.  Finance Brokers can often negotiate better rates with lenders than you can as an individual because they do it for a living.


Finance brokers in Australia

Finance brokers in Australia must either have an Australian Credit Licence or they must be an authorised representative of a licence holder.

These licences are issued by the Australian Securities and Investment Commission (ASIC).


How to be a finance broker

You usually need to have relevant educational qualifications to be a finance broker in Australia, as well as being an Australian Credit Licence holder (or an authorised representative of one).


Is it easier to get finance through a broker?


Getting finance through a good broker can save you time and money.

The Australian lending market has a huge range of lenders and products. It’s a finance broker’s job to understand all of that and to recommend options that suit the needs of their clients.

The alternative is to either:

  • not do your research and get the easiest finance option available to you instead.

The problem with that approach is that you might end up with unsuitable finance, or you might pay more interest and fees than you need to.

  • spend a lot of time researching the market yourself.

The problem with that approach is that it’s time-consuming and potentially confusing if you don’t understand financial jargon, terms and conditions (like finance brokers do). It can also harm your credit file and chances of approval if you go making multiple applications to different lenders just to find out what interest rates you are eligible for.


Can a broker help me get a car loan?

Yes, there are different types of brokers in Australia. As the name suggests, car finance brokers specialise in arranging vehicle finance for borrowers.

Other common types of brokers include mortgage brokers (who help their clients get home or investment property loans) and insurance brokers (who obviously help their clients to get different types of insurance).

A car finance broker will source the funds you need through banks and other specialist lenders like car finance companies.


Car finance companies in Australia

Car finance companies are different from lenders like banks because they don’t accept savings deposits, only loan repayments or lease payments. They can provide loans or lease arrangements (like novated leases or finance leases).

Some company car finance has a relationship with car dealers, while others are more independent. It’s important to understand that if a finance company has a relationship with a dealer, the loan can favour the dealer rather than you.

You should avoid dealer-arranged finance for this reason. You’ll end up paying more than you should have.


Is buying a car through a broker cheaper?

Buying a car through a good broker can be cheaper than trying to arrange the finance yourself. That’s because car finance brokers can access wholesale rates and tend to know which lenders are offering great deals at any given time.


Best car brokers

The best car finance brokers tend to have the following characteristics:

  • they take the time to understand your needs.
  • arranging vehicle finance is the only service they offer.
  • access to wholesale interest rates from a diverse panel of lenders.
  • they require minimal paperwork from you.
  • they can help you with your application.
  • they will be with you every step of the way.
  • they have plenty of testimonials from satisfied car buyers.
  • they can arrange your funds quickly.


Other car finance broker FAQS


Can I use a car finance broker if I have a bad credit score?

Yes, you can (and you definitely should).

If you have a bad credit score, any unsuccessful car loan application you make will damage it further.  A good car loan broker will know which lenders will be more likely to approve your application.


How can I find out my credit score?

You can find out your credit score online for free in Australia via credit reporting agencies like Experian, illion and Equifax.


Is a car finance broker the same as a car broker?

No, they are two different services, but some car finance brokers also provide car broking services.

Car finance brokers arrange car finance. Car brokers on the other hand find cars for you to potentially buy.


Can you use finance brokers for business vehicles?



Can you arrange a car finance pre-approval through a broker?



Can you use a broker for used car finance?



Can you use a car finance broker for a private sale?


Can you use a car finance broker to arrange leases?



Can you use a car finance broker if you buy through a dealer?

Yes, you should avoid dealer-arranged finance at all costs. Tell them you have your own broker.


Do car finance brokers arrange loans for other types of vehicles?

Yes, you can usually arrange finance for any type of vehicle through a broker.


Do your car loan repayments go to the broker or the lender?

The lender.


How we can help

If you’re looking for a great deal on car finance, talk to one of our licensed brokers at Auto Car Loans. We’ll take the time to understand your situation so we can provide you with options from our panel of over 50 Australian lenders. We’ll also help you with your application so you can get it approved as quickly as possible.

Don’t let yourself get talked into finance arranged by a car dealer. If you do, the loan’s terms and conditions will usually favour the dealer and their finance company rather than you.

We also have a car buying service, so you can avoid dealerships altogether! You simply tell us what you want and we’ll get you great price quotes.

Call 1300 301 051 during business hours to speak with one of our experienced brokers or buyers. We’ll save you time and hassle by helping you find you a loan (and a car if you want). We’re a one-stop shop!




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