Car Loan - Broker Charges Service Fee, Is This Right?

easoweno on 20/10/2021 - 21:31

I want to get a car loan and this broker recommended to me said he can do it, and there are 2 fees involves.

  1. The financial institute charges $350 application fee.

  2. He (the broker) charges $350 service fee

Is it normal for this? I have never applied for car loan before and I thought they are like home loans and you don't need to pay anything? At least the broker receives a commission, so why do I still need to pay him fees? Does this sound dodgy?

By the way, it's non-bank institute and low doc (don't want to get into details why not going to big 4 etc….)

Financial Car Loan

Comments

  • bobbified on 20/10/2021 - 21:36

    Is it normal for this?

    How else do you suppose they make money? They're not operating a charity.

    By the way, it's non-bank institute and low doc

    Low doc also usually means high-risk credit, so they'll charge you more for that because those that require it often have little choice.

    • deme on 20/10/2021 - 21:39
      +1

      Commission…

    • easoweno on 20/10/2021 - 21:43

      yes but he will make a commission from my loan already?

      • bobbified on 20/10/2021 - 21:45
        +3

        Yes, they'll charge more because they can. Like I said, a low-doc loan is for people who have difficulty in getting a loan from the usual banks so they will charge you whatever and you have no choice. If you had a choice, you would've already gone to the Big 4.

    • MrThing on 21/10/2021 - 07:45
      +1

      low doc, high fees, high interest rate.

      check, check and check

  • deme on 20/10/2021 - 21:42

    By the way, it's non-bank institute and low doc (don't want to get into details why not going to big 4 etc…

    Why not any other bank?

    Do you really need to take out a loan for a car?

    • easoweno on 20/10/2021 - 21:45
      -1

      I said dont ask, lol….. basically we need the car for business and not enough docs (only really running it and registered GST not long ago).

      • deme on 20/10/2021 - 21:49
        +5

        Do you have enough cash?

        This seems like a half thought out scheme to buy an expensive car using a loan then get a deduction

    • deme on 20/10/2021 - 21:47
      +1

      Probably got them the loan

    • easoweno on 20/10/2021 - 21:48
      -1

      hahaha….. thanks for bringing this up….. situation has changed and we need this car for business purpose now (for R&D, not for everyday drive and get tax benefits anymore)

      • deme on 20/10/2021 - 21:50
        +11

        R&D 🤣

  • AutomationGuy on 21/10/2021 - 00:55
    +1

    Very normal (and that's pretty cheap). Often the providers with the best rates pay the brokers little to no comms. They need that to pay costs / make any money.

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