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How to choose a car loan broker

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There are dozens and dozens of car loan lenders out there. It can feel like you’re swamped with options. But there is an alternative to finding one particular lender. That’s going through a car loan broker. 

A car loan broker is a fantastic choice when looking for a car loan, as a broker’s primary goal is to find all their clients the best deals on car finance.

How lenders and brokers differ

What is the difference between a lender and a broker? A lender is the company or entity that provides car finance. This might be a bank, credit union, dealer financial service, car loan specialist or other financial institution. A lender can only offer you the products that they have. If a bank only has five different car loan products to choose from, then you must pick from those five products. 

During your “shopping around” process, you will have get quotes from each lender you find individually. This may delay your finding the best deal significantly.

Brokers sift through lenders for you

Brokers are companies of financial experts and professionals who specifically find car loan products from these lenders and present the best deals to their clients. Most importantly, brokers operate independently of lenders. Brokers do not provide funds directly to clients. Brokers deal with them on your behalf. They administrate your loan, meaning you pay them directly instead of the lender. The advantage brokers have is that many lenders are competing for your business at the same time, instead of yourself in isolation. This generally yields the best results for you.

How to choose the right one – accreditation and reviews

How do you know you’re choosing the right broker? First off, you must see if they have an Australian Credit Licence or hold membership in the Finance Brokers Association of Australia. If they don’t, walk away. Every financial institution in Australia must be licenced to provide credit services at the very least. You can find out more about credit licences at MoneySmart (www.moneysmart.gov.au)

Another sure-fire way to find impartial reports on brokers is through Choice magazine (www.choice.com.au) and to a lesser extent, CANSTAR ratings (www.canstar.com.au). It’s also worth looking at review sites such as WOMO.com.au and MOZO.com.au, the latter specifically set up for reviewing financial institutions. Naturally, if a broker has a good reputation through word of mouth, it’s a very good sign! 

Talk to a financial professional

Still confused about brokers? You should talk to a financial professional. They can break down the finer details between lenders and brokers if you have any questions. They are always happy to help!


Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Bill Tsouvalas

Bill Tsouvalas is founder and managing director at Savvy Finance. He has a been working in the vehicle & asset finance business for over 8 years. He also writes articles on car finance, chattel mortgage, insurance, consumer protection and insurance related topics. 

For further information,  visit www.savvy.com.au or call 1300 974 066

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