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Brokers who don’t offer vehicle finance are missing the chance to earn $300 per hour, according to one of Australia’s leading finance brokers.
Mildura Finance executive director Peter Schroeder said that brokers generally earn upfront commissions of about two per cent, which would equate to $600 on a $30,000 loan.
He added that car loans are turned around in one or two working days and usually involve just two hours of a broker’s time.
“Three hundred bucks per hour isn’t bad money,” he told The Adviser.
Mr Schroeder said that the average car loan lasts for 29 months, which makes clients more loyal because they return to the broker sooner than they would for a home loan.
Natloans director Mary Nebotakis said car loans were a good way to pick up extra income between mortgage deals.
“There’s a huge lead time when you’re writing mortgages and this is a good instant cash flow and a good way of keeping your customers sticky,” she said.
“You’re not giving them a reason to go into a bank to enquire about a car loan, because they might then be asked about their mortgage, and suddenly the customer is gone.”
Ms Nebotakis told The Adviser that the key to succeeding with car loans is for brokers to educate their clients to visit them before they go to the dealership and get offered vendor finance.
She warned that car loans could be intimidating for some brokers, because the fast-paced nature of deals means clients may walk away if they don’t get immediate answers.
Mortgage Choice Albury broker Karen Schneider said car loans were a clever diversification play because they meant more income for brokers and greater value for clients.
“There’s good commission for very little work. It also gives the client an added benefit – everything is all in the one place, and hopefully they will refer us to someone else,” she said.
