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Buyers who go to a dealership
Buying a car through a dealer versus purchasing it online or through a private sale is a constant debate for consumers. To help make an informed decision Roy Morgan found that 67.6% of Aussies turn to the internet to inform them. In the end, 39% of consumers decide to head off to a dealer to help them finance their car.
Dealers could offer you a lower interest rate, but this could be limited to specific models. Not doing adequate research into purchasing a car at a dealership can have adverse effects on your finances. This can cause consumers to be sucked into a sales pitch to purchase a car that comes with additional add-ons that will have them forking out more.
Buyers who go to the bank
Buyers who approach a bank are more money conscious and have a budget in place. It can also be useful to approach a lender that already has your financial information, making it easier for them to see if you will be able to afford the car that you wish to purchase.
The benefits for people that approach a bank is that they are able to get access to a pre-approved loan. This, in turn, can help increase their negotiating power when purchasing a car. However, consumers also need to be aware that it could be harder to negotiate a lower interest rate with a bank.
Buyers who go to a broker
Brokers play a significant role when it comes to helping Australians purchase their new set of wheels. According to the Royal Commision, brokers form part of the 61% of other sources that provide financing for Australians that want to purchase a car.
Brokers offer consumers a wider variety in terms of competitively low loan rates. Brokers are able to connect you to lenders that are suitable to your credit profile and select the most suited loans with the best possible interest rates and features for you to choose from.
Always keep in mind that not all lenders are the same and not all loans come with features that are tailor-made for you, and this is why it is important that you compare your options. This also means that you need to take time when researching your options so that you won’t experience the pressure of having to make an uninformed decision later.
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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
Approval for car loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.
The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.