Should I Use a Bank or Broker For My Car Loan

Should I Use a Bank or Broker For My Car Loan?

Filed under Information Centre

What's the difference between bank and broker car finance?

The big difference between a bank and a car finance broker is that the broker can't actually lend you the funds to purchase the car.

Here's a closer look at why this can be an advantage, and some reasons why you might still choose to arrange your car loan directly with a bank:

Broker car finance

A car finance broker will connect you with the lender who will offer the best deal on your car loan after comparing 15 to 20 different lenders options, and make the application and all of the arrangements for your car loan on your behalf.

Rather than allowing you to apply for just any loan and possibly be rejected, a car finance broker will assess your financial profile first, before discussing your loan options. An application will be made on your behalf once you give permission to go ahead.

Bank car finance

A bank will arrange your loan on the spot if you meet their lending criteria. Usually, when you apply for a loan with a bank, there's no preliminary assessment, and your credit file will be checked straight away.

A bank will usually offer just one or two loan choices, and they will provide the loan money to you directly. If you need information about your loan, you can contact the bank directly for your loan details.

When would you choose a bank?

If you have an ongoing history and have all of your banking and loans in one place, you may choose to stay with your bank. Your loyalty might be rewarded with a lower rate than you can get elsewhere.

Loyalty can pay off

If you've had your accounts with your bank for some time, and you can demonstrate a consistent income and savings history, getting a car loan with your bank could be to your advantage.

Research & Negotiate

If you are planning to take your car loan out with your bank, you should get quotes from other lenders that you can use as a bargaining tool. You may even find that a car finance broker can get you a better car loan at your regular bank than you could get through a retail outlet.

When should you choose broker car finance?

Broker car finance is good for two key reasons:

1. You can compare car loans from the local market and choose the best one.

2. A pre-assessment of your financial profile means you won't apply for car loans that you aren't eligible for.


Using broker car finance instead of a bank can give you an advantage in preparing your application and having it approved.

A car finance broker will take care of all the back and forth with the bank or lender, and guide you to apply for an amount that you are likely to be approved for.

This can take all the stress out of the loan process, because you've got a professional taking care of the communication process, and it's generally free of charge.

Make your car loan arrangements out of work hours

A car finance broker will usually be willing to work with you to arrange your car loan when it suits you. With the option to provide your information and documents using SMS or email, you will be able to make your car loan arrangements outside your work hours, when you have the time.

Choice of lenders

Rather than taking out a loan at a bank, where you may only be eligible for one type of car loan, you can compare the loan options from 15 or more lenders. This means that if there's a niche lender who can offer you a great deal, you'll hear about it, and you don't have to rely on your own research.

Get insurance - and include it on your car loan

A car finance broker will be able to arrange your comprehensive car insurance when you settle your car loan. Your premium can be included in your loan payments, meaning there's one less expense to worry about. With access to wholesale car insurance, you could get a better rate of insurance than you might through retail.

Get all the information up front

Perhaps the best thing about using broker car finance is that you don't have to decide on your car loan until you've found out all of the different options.

Once you've got your car loan quotes, you don't have to arrange your loan with the broker, you can still go directly to the bank on your own if you decide that's the better option.

To speak to someone who'll listen to your situation and what you need, and then give you some options to think about, you can get a car loan quote from a friendly Positive car finance broker.

Quick Quote

By clicking Get My Quote, I acknowledge and accept the Terms & Conditions.

Did you enjoy this article?

We can deliver articles like this one straight to your inbox. Simply enter your email address in the box below and we'll take care of bringing you the best content.

Email Sent!

Please enter a valid email.

We make finance a Positive experience