Finance Broker
vs
Dealer Finance
5 reasons you can save money with a broker
Buying a car can be a fun but daunting experience and the entire process of visiting dealerships, negotiating a deal and payment for the car can be confusing and overwhelming for many. In many cases, a person can find a good deal on a car but when it is all finalised they can be left scratching their head wondering why it all cost so much more. The Car Dealer usually will push you into their dealer finance quickly, don’t forget, that you have another option in the form of Car Finance with a Broker.
So why speak to a finance broker before discussing finance at a dealership?
-
Flexibility and options
A broker can offer a range of car finance options including:
- Secured
- Unsecured
- Consumer loan
- Chattel mortgage
- Novated Lease
- Finance Lease
- Personal loan
-
Dealers are target driven
One of the major differences is that dealers are focused on monthly targets and on generating income from every vehicle sold. A big portion of this income comes from Finance and Insurances sold to a customer. When a dealership has to maintain this benchmark for income generated per vehicle, it results in higher rates, unsuitable loan structures such as high balloons/residuals (that will show lower repayments but cost more) and insurances that pay large commissions to the dealer.
A brokers business overheads in most cases will be much lower than a dealership and many individual brokers don’t have any KPI’s or targets to maintain or insurances to sell, resulting in a more transparent approach when quoting.
-
Access to more lenders
Most dealers are limited to 1-2 lenders and unless your particular application fits within that dealer’s guidelines it could result in a decline.
A broker is an intermediary between yourself and a larger panel of lenders, each lender offering a special Niche that they cater to. If you have a lower credit score, a new business, prior defaults, just started a new job, casually employed or are self-employed, a broker can give you a variety of options and lenders to consider.
-
Consistent Service / faster approvals
A dealership is a large business with many staff, varying rosters, and regular turnover. The person you see on the day of purchase may be different to the person that works on your loan and different again to the person you see when you sign up the paperwork.
A broker can offer consistency and 1 point of call from start to finish. You will generally have direct access to them and will receive real-time updates and faster approvals.
-
Supporting local family business
Many finance brokers are locally owned small businesses and care about the final outcome of your experience. Although a good dealership would also care about your customer experience, with such a high volume of customers it is difficult to maintain a personalised customer relationship with each buyer.
Your local broker will be there when you call back in a year’s time to refinance your home-loan, they will be there in 3 years’ time when you have a question regarding your loan, they will be there in 5 years’ time when your loan is finished and you are looking at financing a new car. By supporting local business, you are helping that person provide for their family and contributing to a local small business economy.
At SB finance we offer property and asset finance with a specialisation in car finance. With years of experience in new and used car dealerships, we assist our customers in understanding the process of purchasing a car through a dealer. We can help them source, negotiate and finance the vehicle and aim for a fast, stream less and positive outcome every time!