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Broker Vs. Dealership Finance

Tuesday, 09 June 2015

Broker Vs. Dealership Finance

When you’re buying your new car from a car dealership, it’s easy to be swayed into thinking that taking finance from the dealership will get you a better deal overall. Unfortunately that’s not usually the case, so here are four reasons to secure finance for your next purchase through a broker:

1. Lender vs Panel of Lenders.

Car dealerships are usually only accredited with one or two finance companies. This may restrict your chances of approval because not everyone meets those select lenders’ guidelines every time.  The business manager will probably only have experience in those one or two finance products too, and may not be able to tailor a package that is suitable.

Finance brokers, on the other hand, are accredited with a much larger panel of lenders, thus increasing your chances of an approval. The finance broker is experienced in dealing with a wide range of finance products and should be able to find a suitable finance deal for you.

2. Conflict of interest.

The business manager is working for the dealership and therefore may not be looking after your best interest.

Finance brokers work independently from the dealership and will assist you in securing the best deal for you. Regardless whether you purchase from the first dealership you walk into or the one down the road, the finance broker is always only looking after you.  

3. Better negotiating power.

By having a pre-approved loan through a broker, you can confidently negotiate the purchase price of your car with the dealership. Since the dealership knows that you already have finance ready, they know you are a real buyer and not a time waster. By organising your finance with a broker beforehand, you maintain control of the car purchase. And, if the dealership is not giving you the best deal on the vehicle, you can always take your business to another dealership or use our complimentary car buying service.

4. Things aren’t always as they seem.

Convinced by that 0% or low interest promotion? It pays to do your homework before signing up for one of these – literally! Usually these promotions require that the car is sold at its retail or “window” price, because the dealership is essentially paying the interest for you and absorbing this cost within the margin in the car. More often than not, it works out cheaper overall to take out finance at a normal rate, and negotiate a discount on the car instead.

If you’re looking for a new car and want a more competitive deal on your car finance than what the dealership can offer, contact us to explore all your options today.