car loan broker
car loan broker

Should I Use a Car Loan Broker or Dealer Financing?

Thinking of buying a new car but don’t know whether to go with a car loan broker or dealer financing? If you are, then this article is something you should read.

There’s nothing quite like the excitement of buying a new car. Whether you’re looking for a reliable workhorse, a people-mover for your expanding family, or something a bit flashy to go with your recent promotion, buying a car can be exhilarating. But it can also cause a bit of anxiety. 

Once the thrill of that first test drive wears off, reality sets in and, somehow, you have to pay for the thing! And for most Aussie car buyers, that means you have to make a choice – do you apply for dealer finance or talk to a car loan broker?

Gold Coast Car Loan Broker or Dealer Finance?

According to the Royal Commission into the Financial Services Industry, 90% of all car buyers in Australia use some form of vehicle finance. Of those that use finance, almost 40% will opt for dealership finance, while the rest use a variety of other sources (including online lenders and car loan brokers).

What’s the main difference between dealer finance and car loan brokers? Typically, a dealer will have a standing arrangement in place with a preferred lender. So, the car loan that they offer you will be the same loan that they offer to everyone else. In contrast, car loan brokers will have access to a panel of lenders, allowing for more choice and flexibility. 

Obtaining New Car Loans Through a Dealership

Many car buyers opt for dealership finance purely for the on-the-spot convenience. It’s a fast and simple way to obtain new car loans. However, this speedy process doesn’t always allow time for an accurate assessment of your financial needs or a comparison of different loan products. So, before you decide between using a car loan broker or dealership finance, take a few moments to consider the pros and cons of both. 

Car Dealer Financing Pros

  • It’s fast and easy: You agree on a price, sign a few forms, and the dealer will sort out the rest. The dealer needs finance to be approved if they’re going to make their sale, so they’re highly motivated to push the loan through ASAP.
  • It’s an option for buyers with low credit scores: Obtaining a new car loan usually involves a standard check of a borrower’s credit history. If your credit history is a bit spotty, you may have issues securing finance. However, some car dealerships may be able to help you secure finance, regardless of your current credit score. 

Car Dealer Financing Cons

  • You have less power to negotiate: When you organise finance through a dealer, you have limited power to negotiate for a better price. The dealer knows exactly how much you can get approved for, so there’s no motivation to lower the price.
  • You have to put a lot of faith in your car dealer: How much do you trust the person trying to sell you this car? When they tell you this is the best car finance deal available and it’s in your long-term best interests, do you believe them? It can be hard to read between the lines when the person selling you the car is also the person organising your finance. 
  • You probably won’t get the best finance deal: When you apply for dealer finance, you’re missing out on an opportunity to compare loan products. This makes it almost impossible to ensure you’re getting the best deal to suit your needs, and it may end up costing you a lot more over the life of the loan. 

Using Car Loan Brokers for Gold Coast Car Finance

discussing terms with a car loan broker while car shopping

A car loan broker on the Gold Coast can also offer a fast and effective method for obtaining car finance. But by using car loan brokers, you’re eliminating a lot of the doubt and risk. At Professional Lending Solutions, we have a team of experienced finance brokers who can help you find a great car loan with a competitive interest rate.

Car Loan Broker Pros

  • An expert does all the hard work for you: By working with a car finance broker, you gain the support of a skilled industry expert who is willing to do all the hard work for you. We’ll take care of the research, fill out the forms, and chase up the lender to prevent delays. 
  • You get access to a wide panel of lenders: Car loan brokers use sophisticated software to compare suitable loan products from a panel of lenders. We’ll compare loan fees, interest rates, features, and the loan term. This enables us to find you the best car loan to suit your needs.
  • You have an advocate working in your best interests: Finance brokers are committed to working in your best interests. This means we’ll work hard to secure your loan approval, but we won’t compromise your long-term financial well-being. Instead, we’ll talk directly with your preferred lender, explaining any irregularities in your application and negotiating for the best possible loan terms. 
  • You can negotiate for a better price: By applying for a car loan pre-approval, you can find out exactly how much you can afford to spend on your new car. This gives you a lot more power when it comes to negotiating the final price of your car because your dealer knows you can’t be talked into paying more.
  • You get personalised service: A car loan broker won’t just offer you the “one-size-fits-all” approach to car finance. This means you’ll not only receive a new car loan tailored to your needs, but you’ll also have someone willing to answer all your questions, discuss various scenarios, and find workable solutions to any roadblocks you might encounter.

Car Loan Broker Cons

  • You need to plan ahead: The process for obtaining a car loan through a broker can be simple and fast, but it does require slightly more forethought (you can’t walk into the dealership and make a same-day purchase). This is why it’s a great idea to talk to us about pre-approval as soon as you start thinking about buying a car. That way, when you’re ready to make a purchase, you’ll have a faster turnaround time on your loan approval. 

Access Multiple Lenders for the Best Car Loan Deals

A car loan broker’s diverse panel of lenders gives you access to a broad spectrum of financial solutions. This makes it much easier to tailor the finance product to your unique situation and preferences. Because we have an extensive lender network, we’re able to match clients with lenders accommodating various credit scores, income levels and financing needs. Whether you’re looking for competitive interest rates, flexible terms or specialised loan features, we’ll be able to help you find what you need.

This versatility is what distinguishes car loan brokers from dealership financing. The power to choose your lender makes it easier to gain the best possible loan terms for your needs.

Car Loan Broker vs. Dealer Finance: Which is Best?

woman deciding between a car loan broker and dealer financing

To illustrate the benefits of using a car finance broker, consider the following scenario:

Sarah is a Gold Coast resident with an average credit score who wants to finance her dream car. With dealership finance, she would face limited options and a predetermined interest rate. In contrast, a car loan broker would assess her financial profile and provide access to a diverse network of lenders. By leveraging this panel, Sarah would be able to secure a competitive interest rate tailored to her budget and financial goals. The expertise of the broker would ensure transparency during negotiations with lenders, giving Sarah confidence that she’s getting the best possible deal.

The broker would also encourage Sarah to apply for pre-approval early in the process. This would not only speed up the purchasing process but would also give Sarah the confidence to negotiate a better price.

Talk to a Car Loan Broker for Access to the Best Deals

New car loans can help car buyers transform a dream into a reality. But finding the best new car loans can present a challenge. At Professional Lending Solutions, our experienced team of car loan brokers is committed to finding you the best car loans to suit your unique circumstances. 

We’ll compare a range of new car loans from our diverse panel of lenders and determine which loan products will be most suitable.

Don’t gamble on dealership finance. Book an appointment with a car loan broker at Professional Lending Solutions today for expert advice that you can trust.