Brokers warn car buyers to have finance pre-approved before purchasing

The peak body for Australia’s finance brokers is urging car buyers to do their due diligence and use a reputable lending professional when accessing finance for motor vehicle purchases.

Executive Director of the Finance Brokers Association of Australia (FBAA) Peter White said buyers should always have finance pre-approved in principle before entering a car yard to assist them in comparing different terms and conditions.

“There has been wide publicity recently about the risks of motor dealership finance, particularly in light of the BMW decision to refund customers who were victims of irresponsible lending decisions.

“Car buyers who use dealer finance have to make sure the person providing the finance is professional and is governed by a strict code of conduct and audit measures. It also provides security if they are a member of an industry body like the FBAA.”

Mr White said it only takes a phone call or a simple online search to see if they are a member of a professional industry body.

“Some motor dealers wrongly believe they are exempt from responsible lending guidelines, and the result is borrowers being given loans with terms and conditions that are not in their best interests.”