Hi everyone.

I saw a post about MBI (mechanical breakdown insurance) being added to your finance. So thought I'd post a few things I know as I used to work for a Car Finance company.

Firstly you walk into a dealership and like a vehicle. You go through the application process and the dealer/salesman say your weekly payment is $100 a week (keeping it simple) you saw cool let's do it. $100 a week over 3, 4 or 5 years.

That sales man and dealer ship will receive a fee called a dealer fee, normally a few hundred, also commission. This is calculated on the interest rate your getting charged.

So a dealer will go to a finance company and say hears the deal, they say cool, approved for X amount. The dealer has what's called a buy rate, say 5%. They (the dealer) give you the loan at 10%. The commission they earn is the extra 5%. That's what they want you to take finance instead of paying cash.

That's why if you say no $100 a week is to much, they'll reduce it a bit because they have 5% to play with, but also don't want to reduce their commission.

So make sure you haggle.

Another option is get go straight to the finance company, that way you'll get the best interest rate and the company doesn't make commission or charge you a dealer fee. They will pay the dealer for you and you may save more on your weekly payments.

Remember when getting finance through a dealer or broker, they are the middle man. Middle men always gets paid.

Hope that makes sense, feel free to ask questions.