The interest rate is the number most people compare, but car loan fees can change the cost of a loan by thousands of dollars. Some are charged once when the loan is set up, some every month, and some only if something goes wrong. Knowing what each one is for, and who is charging it, makes it much easier to compare offers fairly.
The short answer: the main car loan fees are an establishment fee from the lender, a broker or dealer fee if someone arranges the loan for you, an ongoing monthly fee, and default or early exit fees that apply in certain situations. The comparison rate captures most of these in one figure, which is why it is the number to compare.
Why car loan fees matter more than you might think
In June 2026 ASIC, the corporate regulator, published a review of more than 350,000 car loans across eight car finance providers, released as Report 832, Lifting the bonnet. It found the overall cost of car loans could vary widely and that total fees could be significant, particularly on smaller loans.
According to ASIC, loans typically carried two establishment fees:
- a lender establishment fee, ranging from $299 to $995
- a distributor establishment fee, charged by the dealer or broker who sold the loan, ranging from a flat $912 up to $2,500
In the most extreme example ASIC highlighted, one lender charged a third fee, and a borrower paid $9,154 in establishment fees on a $49,162 car loan, around 18% of the loan amount. ASIC's point was not that every loan looks like this, but that fees vary enough between lenders and sellers that comparing them is worth the effort. We covered the review's findings for credit-impaired borrowers in our guide to bad credit car loans.
The upfront fees
Moneysmart lists the common car loan fees. The ones charged at the start are:
- Establishment fee: a one-off fee from the lender for the administrative cost of setting up the loan.
- Broker fee: a one-off fee where a broker is involved in arranging finance. Moneysmart says this fee must be disclosed on the finance contract.
- Dealership or introducer fee: a one-off fee charged by a party that introduces you to a lender, which might be the car dealership, to cover the cost of helping with your application.
Upfront fees are often added to the amount you borrow rather than paid in cash. That feels painless on the day, but it means you pay interest on the fees for the life of the loan. Ask whether a fee is being financed and how much it adds to your total repayments.
The ongoing and situational fees
Other fees apply during the loan, or only in certain situations. Moneysmart names:
- Monthly service fees, charged for as long as the loan runs. A small monthly fee adds up over a five or seven year term.
- Default or missed payment fees, charged if a repayment is late or missed.
- Default interest, extra interest that may be charged when you fall behind.
Early repayment is another area to check. Moneysmart notes that variable rate car loans usually do not have an early exit fee, which may suit you if you plan to make extra repayments or pay the loan off early. Fixed rate loans may carry break costs or early termination fees, so read the contract before you sign. Our guide to paying out a car loan early explains how payout figures and break costs work.
Who is involved in your loan
When you arrange finance at a car yard, there may be more parties than you realise. Moneysmart warns that a car loan arranged at the dealership can involve fees paid to several people, and that there may be a broker involved as well as the lender. Its advice is to take your time and ask who is involved and what fees are included before you sign.
Two ASIC reforms are useful background:
- Flex commissions are banned. Since 1 November 2018, lenders can no longer pay dealers and brokers commissions that rise with the interest rate they arrange. ASIC said the lender, not the car dealer, is responsible for setting the interest rate, and the dealer cannot suggest a different rate that earns them more commission.
- Add-on insurance has a pause. Since 5 October 2021, the deferred sales model has required a four-day pause between the sale of a product, such as a car, and the sale of add-on insurance, although some classes of product are exempt. It gives you time to consider whether the cover is good value and to compare alternatives.
If you want to understand the differences between buying through a dealer, a broker or your bank, see dealer finance vs a broker vs your bank.
How to compare car loan fees properly
The simplest tool is the comparison rate. Moneysmart says a lender must give you the comparison rate for a loan, a single figure that includes the interest rate and fees, so you can compare one loan against another. Make sure you are comparing the same loan amount and term, because comparison rates only apply to the example they are based on. Our explainer on comparison rate vs interest rate goes into detail.
Some costs sit outside the comparison rate, so also check:
- the total amount you will repay over the full term, including financed fees
- whether there is an early exit fee or break cost if you pay the loan off early
- the fees charged if you miss a repayment
- whether add-on products such as insurance have been bundled into the loan amount
A checklist before you sign
- Ask for a written list of every fee, who charges it and whether it is being added to the loan.
- Compare the comparison rate and the total repayable, not just the interest rate or the weekly repayment.
- Shop around before you choose the car. Moneysmart suggests looking at loans before you find your next car, so you know what you can spend and can negotiate from a position of strength.
- Check the advertised ranges on our car loan rates page and how each of the lenders we compare structures its fees.
- Use our loan repayment calculators to see how fees and the term change what you repay.
- If you already have a car loan with high fees or a high rate, refinancing may reduce your costs, after allowing for any exit fees on the current loan.
Fees are not a reason to avoid finance, but they are a reason to read the contract carefully. A loan with a slightly higher rate and low fees can cost less overall than a loan with a sharp rate and a stack of fees.
