Warning about high car loan fees in Australia

Car loan fees are very high.

The report came out on June 24, 2026.

Holly Reid borrowed $22,000 for a car with a 22% interest rate.

In short, car loans can be expensive.

A new report warns about traps in car loans, like high interest rates and fees.

The report says some lenders use high-pressure sales tactics and charge high fees.

What's next for car loan customers?

Financial counsellors hope the report will lead to action against bad lenders.

Holly Reid gets stressed when her car payment is due.

She pays $339 every two weeks.

Holly says she gets anxious about paying her bills.

She worries about having enough food for her kids.

Holly borrowed $22,000 in 2024 with a 22% interest rate.

Even though she never missed a payment, the interest rate is very high.

Holly has fallen behind on other bills to keep her car.

The car is important for her growing family.

Holly thought the loan was $6,000 less than it actually was.

She didn't know about the $5,000 in fees until later.

Holly was emotional when she found out about the fees.

She was working casually and pregnant when she took out the loan.

Holly didn’t know her pregnancy wasn’t on the loan application.

She asked for help with her loan payments.

Rapid Loans said they didn’t know about Holly’s pregnancy.

The company said they told Holly about all the fees.

There are more complaints about lenders.

A report by ASIC warns about car loan traps.

The regulator wants customers to be careful of high fees and interest rates.

ASIC got many complaints about lenders.

The commissioner says the fees are very high.

The report looked at two years of loan data.

Rapid Loans had the highest interest rate at 22%.

Other lenders had lower interest rates.

The interest rates vary a lot among lenders.

ASIC says the interest rate reflects the risk of the customer.

Fees can be a big part of the loan.

There are many fees, including establishment fees and distributor fees.

Rapid Loans was singled out for charging high fees.

One customer was charged $9,154 in fees.

Holly was charged a $2,662 provider fee.

Her financial counsellor doesn’t know what the fee is for.

The counsellor thinks it might be a fee for no service.

Rapid Loans didn’t explain the provider fee.

ASIC says some fees are extremely high.

The regulator warns lenders to make sure customers can afford the fees.

Some borrowers were left with more debt after their car was repossessed.

This can happen if the car was over-valued or had high fees.

One woman owed $37,299 after her car was sold.

Do you have a story about a car finance company?

A financial counsellor hopes the report will lead to action.

He helped a man with a dispute involving Pepper Money.

The man was loaned $50,000 for a Toyota Landcruiser.

The vehicle broke down, and the man couldn’t pay.

Pepper Money denied his requests for help.

The man was sent a big bill after the vehicle was seized.

The matter was settled after a dispute.

The financial counsellor says people shouldn’t have to go through this stress.

The ASIC report looked at two years of loan data.

Pepper Money said they resolved the matter.

The company disagrees that they did anything wrong.

Pepper Money made changes after the ASIC review.

The company defends its high interest rates.

The report was a result of many complaints about lenders.

Rapid Loans had the most defaults.

Most defaults happened in the first six months.

Having a default usually means an extra fee.

Rapid Loans rejected many requests for hardship variations.

The lender approved many loans to people in casual work.

Many of these loans had defaults.

A financial counsellor wants more action against poor conduct.

He works in a community with high default rates.

He wants more action to crack down on bad lenders.

Rapid Loans made some changes after the report.

The company declined to be interviewed.

The executive chairman said they provide finance to everyday Australians.

The company will strengthen its lending processes.

The report also called out some sales practices.

Toyota Finance and AAAF were singled out.

ASIC found that these lenders used high-pressure sales tactics.

The lenders agreed to review their sales targets and training.

Toyota Finance will review the report and consider changes.

The report came out on June 24, 2026.

Promotion

Prática de escuta