Choosing a car loan means weighing up lenders with different rates, fees and approval criteria. A car loan broker can take on much of the legwork for you, saving time and helping you avoid applications that are unlikely to be approved.
The broker you choose can shape the loan you end up with, so finding the right one is crucial. Savvy is a broker that works with more than 40 lenders, including options for borrowers with more complicated credit and financial profiles, so we can help you find a loan that suits your circumstances.
What is a car loan broker and what do they do?
A car loan broker serves as the middleman between you and your lender. They help organise your car loan, connecting you with the most suitable finance option and handling your application for you. That means:
- Getting to know your situation: looking at your income, expenses, credit history and the car you want to work out what you can realistically borrow.
- Comparing your options: checking rates, fees and loan terms available across their lender panel so you don't have to.
- Finding the right fit: pointing you to lenders whose requirements you actually meet, which cuts down on declined applications.
- Sorting the paperwork: gathering your documents and making sure everything's complete and accurate before it goes to the lender.
- Answering your questions: breaking down things like balloon payments, fees and the comparison rate, as well as any other queries you may have, in plain English.
- Keeping things moving: dealing directly with your lender, and the dealer or private seller, and keeping you updated until the loan is settled.
They don't approve your loan or hand over the money, as that’s the role of the lender. Through Savvy, applicants can have their car loan formally approved within 48 hours of applying, though some may take longer depending on the nature of the application.
Car loan broker vs lender vs dealership
There are several ways to go about financing your car: you can get a car loan through a broker, directly from a lender or through the dealership where you're buying the car. All three can end with a loan for the car you’re after, but they work quite differently.
| Car loan broker | Bank or non-bank lender | Dealership finance | |
|---|---|---|---|
| What they do | Compare loans from a range of lenders and manage your application | Offer their own loan products and assess your application directly | Arrange finance at the point of sale, often through one lender or the manufacturer's finance arm |
| Who approves the loan | One of their lending partners | The lender | One of their lending partners |
| Number of options | As many as their lender panel covers | Only that lender's products | Usually a small number of lenders |
| Comparison done for you | Yes, across their lenders | No, you'd need to compare yourself | Limited to the lenders the dealer works with |
| Help with the application | Yes, from paperwork through to settlement | You complete the application yourself | Yes, dealer typically handles the paperwork |
| How they're typically paid | Commission from the lender | Through interest and fees on your loan | Commission from the lender |
| Responsible lending rules apply | Yes | Yes | Yes |
| Credit contract is with | The lender | The lender | The lender |
| Worth considering if | You want options compared for you | You already know the lender you want | You want everything arranged in one place |
| Keep in mind | They can only compare lenders on their panel | You get one lender's view, with no comparison | Convenient, but compare it against another option before you sign |
What a broker spots that applicants don't
"Plenty of declines can be avoided with a quick conversation first. Things like a few recent credit applications, a new job, a new ABN or income that's hard to prove or inconsistent can make some lenders hesitate. If your broker knows about any potential curveballs upfront, they can explain it properly or point you to a lender who's comfortable with your situation."
The pros and cons of using a car loan broker
Pros
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More lenders to choose from
A broker can compare loans from a range of lenders in one go. Savvy works with more than 40, so there's a better chance of finding one that fits than by applying directly with a lender.
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Saves you time
You don't have to research lenders, fill in multiple applications or chase paperwork yourself; your broker handles everything for you, allowing you to sit back.
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Support through the whole process
If you aren’t sure where to start, you can ask questions at any point, rather than working it out on your own.
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Help if your situation isn't straightforward
A broker may know lenders who are more flexible with things like bad credit or self-employed income. Savvy's lending panel includes lenders who work with these situations.
Cons
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Restricted to partnered lenders
Brokers only compare the lenders on their panel, so a broker with a small panel may not find you the best deal.
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Fees may apply
Some brokers charge a fee for their service, so check what you'll pay before you commit to anything. These should be laid out clearly before you sign any agreements.
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Service can vary
The experience depends on the individual broker's expertise and how well they communicate, so it pays to check reviews first.
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It can feel less hands-on
If you like to deal directly with the lender, handing the process to a broker may feel like you're out of the loop at times, even if they give you regular updates.
How do car loan brokers get paid and do they charge fees?
Most car loan brokers are paid a commission by the lender once your loan is approved and settled. That means you usually don't pay the broker directly for finding you a loan. However, some brokers do charge their customers a fee on top. If they do, they have to give you a written quote for it upfront, which you need to accept before they start helping you with your loan.
Every broker must also give you a credit guide, which explains how they're paid and any fees or charges that might apply. If a broker isn’t upfront about any of the fees being charged as part of your agreement, treat it as a red flag.
What to look for when choosing a car loan broker
- Credentials: check they hold an Australian Credit Licence (ACL) or are an authorised credit representative of a licensee. You can search both for free on ASIC's Professional Registers Search. If you can't find them, don't go ahead with them.
- Experience: look for a broker who regularly works with car finance and has helped people in a similar position to yours. Their website and reviews can give you a good idea.
- Communication: choose someone who explains things clearly and keeps you updated at each step. If you don't feel comfortable with them, it's fine to look elsewhere.
- Lending panel: a broker with a wide and varied panel can compare more options for you, so it's worth finding out who they work with.
- Reviews and recommendations: check independent review sites and ask friends or family who they've used. It's a good way to see how a broker treats their customers.
How to apply for a car loan with Savvy
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Complete our online form
Fill out all the required information, including the amount you’re after and details about your finances.
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Send through your documents
We’ll need to verify your identity and finances as part of this process, so you’ll need to submit the relevant docs.
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Speak to your broker
Your Savvy broker will give you a call to discuss the options available to you and answer any questions you may have.
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Find your car
If you haven’t locked in the car you want, we can help you do that with our in-house car broker service.
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Have your application submitted
Your broker will prepare your application for formal submission and send it off to your lender.
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Signed, settled, delivered
Once you’re approved, we’ll handle the settlement of the loan and you can start driving your new car before you know it!
Why apply for a car loan with Savvy?
Questions to ask a car loan broker
Once you've found a broker you like the look of, these questions can help you work out whether they're the right fit:
- Are you licensed? You can check this yourself, but if they give you a different answer to what the ASIC register tells you, walk away.
- How many lenders are on your panel? The more lenders available to your broker to compare, the better.
- Does your lender panel suit my situation? Some lenders are more flexible with things like bad credit, self-employed income or older cars, so ask whether the broker works with lenders who can help you.
- Why are you recommending this loan? A good broker can explain why they've picked it over the alternatives, rather than only telling you it's the cheapest.
- What are the interest rate and comparison rate? The comparison rate includes unconditional fees, such as establishment and monthly charges, so it gives a clearer picture of the cost than the interest rate alone.
- What fees come with the loan itself? Ask about establishment fees, ongoing fees and anything else the lender charges, separate from any fee the broker may charge.
- Can I make extra repayments or pay the loan off early? Some loans charge for this, so it's worth knowing before you sign.
Can I use a broker with bad credit or if I'm self-employed?
Yes, if your broker works with flexible lenders, as Savvy does, they can point you towards a provider whose requirements you meet, whether you're after a bad credit car loan or you run your own business.
Applying on your own can lead to declines if you aren’t fully across a lender's criteria. A broker, on the other hand, should know their lenders’ requirements inside and out and therefore be aware of those that are more likely to say yes.
If you're self-employed, lenders may ask for extra documents to verify your income, so a broker can also help you get these together. This can also help if you’re looking to finance a car for your business.
Is using a car loan broker worth it?
For many people, yes, but it depends on your situation. A broker tends to be most useful if:
- You're short on time or don’t want to be heavily involved: they handle the comparing and the paperwork, so you don't have to.
- You're not sure where to start: they can walk you through your options and explain anything unclear.
- Your situation isn't straightforward: if you have bad credit, you're self-employed or you're buying an older car, they can point you to lenders more likely to say yes.
Going direct to a lender might suit you better if you already know exactly which lender you want and you're confident in your application. Even then, it's worth comparing at least one other option before you commit.
