Key highlights
- Dealer finance is convenient but usually tied to one funder
- On-the-spot rates are rarely tested against the wider market
- A broker compares many lenders to find sharper pricing
- Compare the dealer's offer against 80+ lenders before signing
Dealer finance is convenient because it is offered on the spot, but it is usually tied to a single funder, so the rate is rarely tested against the wider market. A broker compares many lenders on one application, which often uncovers sharper pricing than the dealer's default option. At Overdrive, our broker Simon Kendrick compares 80+ banks and non-bank lenders, so before you sign the finance the dealer puts in front of you, you can see whether it genuinely stacks up.
How dealer finance works
Dealer finance is arranged through the machinery seller, often via a single funder or a small panel the dealer has a relationship with. Its big advantage is convenience: you can arrange the purchase and the finance in one visit, sometimes within minutes. The catch is that the dealer is motivated to close the sale, not to shop the market for your sharpest rate. The rate you are shown may be reasonable, or it may carry a margin, and you usually have no way of comparing it against what other lenders would offer for the same machine and the same buyer.
How a broker compares
A broker approaches the finance independently of the sale. Rather than one funder, you access a panel of banks and non-bank lenders, and the broker matches your profile to those most likely to price it keenly. Because lenders differ in appetite for equipment type, industry and credit profile, the spread of offers on one deal can be significant. A broker also negotiates structure and presentation, packaging your application to put it in the best light. You are not locked into the dealer's preferred funder, so you keep the leverage that comes from a genuine comparison.
Where the rate difference comes from
A dealer rate can sometimes look attractive, particularly on promotional or manufacturer-subsidised offers, but it is worth reading the full terms. Rates start from around 6.55% p.a. for strong, asset-backed deals; lower-doc, older or cheaper assets and weaker credit are priced higher, and these figures are indicative and subject to lender assessment. A low advertised dealer rate may come with conditions, a higher price on the machine, or fees that lift the overall cost. Comparing independently lets you separate the finance from the sale and judge each on its merits, rather than accepting a bundled figure at face value.
Keeping the sale and the finance separate
One practical benefit of arranging finance through a broker is negotiating power on the machine itself. If your finance is pre-approved independently, you can approach the dealer as a cash-equivalent buyer and focus purely on the purchase price. Terms typically run 1-7 years with balloon or residual options tailored to your cash flow. Having your financials, ABN and GST details ready speeds things up. For eligible applicants, same-day pre-approval and settlement within 24-48 hours may be available, subject to lender criteria, so independent finance need not slow the deal down.
Dealer finance is not automatically bad, and occasionally a subsidised offer is genuinely strong, but you only know by comparing. Before you accept the finance the dealer offers, let Simon run your deal across 80+ banks and non-bank lenders on one application and show you whether it can be beaten. Get in touch for a free, no-obligation quote and buy your machinery knowing the finance is as sharp as the market allows. It costs nothing to check, and the comparison need not hold up your purchase.
Frequently Asked Questions
Is dealer finance ever the cheapest option?
Occasionally, yes, particularly with manufacturer-subsidised or promotional rates. But such offers often carry conditions or a firmer price on the machine, so the total cost matters more than the headline rate. Comparing the dealer's offer against the wider market is the only way to confirm it genuinely wins.
Can I still negotiate the machine price if I use a broker?
Yes, and it can strengthen your position. With independent finance pre-approved, you approach the dealer focused solely on the purchase price rather than a bundled finance-and-machine deal. Separating the two often gives you clearer negotiating leverage on the equipment itself while your finance is handled elsewhere.
Does arranging my own finance slow the purchase down?
Not usually. A broker can move quickly, and for eligible applicants same-day pre-approval and settlement within 24-48 hours may be available, subject to lender criteria and documentation. Having your financials and machinery details ready helps, so independent finance can keep pace with a dealer's timeline.
What should I check in a dealer finance offer?
Look beyond the advertised rate at the fees, the term, any balloon or residual, the machine price and whether the rate is conditional on other purchases. Bundled offers can obscure the true cost, so compare the whole deal against independent quotes rather than judging on the headline figure alone.
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