What Is Rate Loading in Car Finance?
Rate loading is when a broker adds a margin to your interest rate to increase their commission. A lender might offer 6.5% but the broker quotes you 7.5%, keeping the extra 1% as additional commission. Agent Finance doesn't load rates—you get the actual lender rate.
Written by Rob Carlile, former senior executive at Australia's largest car finance broker.
Detailed Answer
Rate loading is one of the least transparent practices in car finance:
How Rate Loading Works 1. A lender offers a wholesale rate (e.g., 6.5%) 2. The broker is allowed to "load" this rate up to a maximum (e.g., 8.5%) 3. The broker quotes you somewhere in that range 4. The difference between wholesale and quoted rate becomes extra broker commission
The Cost to You On a $50,000 loan over 5 years: - 1% rate loading = approximately $1,300 extra interest - This is on top of any establishment fees
Why Brokers Load Rates Some brokers argue rate loading covers their costs. The reality is many use it as additional profit on top of base commission.
Agent Finance's Model Agent Finance doesn't load rates. We charge $599 flat and show you the actual lender rate. Our AI has no incentive to push higher rates—it's programmed to find the most competitive options for your profile.
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