ASIC Released a New Report on Car Finance Today. Here's What It Found — and What You Should Do Right Now

Why ASIC Is Suddenly Talking About Car Loans

ASIC doesn't publish 37-page reports for fun. The regulator noticed a rise in complaints from Australian car buyers about motor vehicle finance — and decided to dig in. What it found should make anyone sitting in a dealership F&I office very uncomfortable.

The report found serious shortcomings in the way lenders oversee the brokers and car dealers who sell loans on their behalf. In plain English: the people handing you a finance contract at the dealership are not being watched closely enough by the banks and lenders behind those products — and you're the one paying the price.

ASIC commissioner Alan Kirkland summed it up bluntly: "Responsibility for consumer outcomes cannot be outsourced." That's regulator-speak for: lenders cannot hide behind brokers and dealers when customers get hurt.

What Harm Actually Looks Like in Car Finance

The report doesn't just wave a finger — it cites specific examples of the damage being done to everyday Australians. These include:

• Large, unexplained variations in loan costs for borrowers with similar financial profiles — meaning two people buying the same car could end up on very different rates with no clear reason why.
• Repossessions after hardship assistance was refused — borrowers who fell behind, asked for help, were knocked back, and then lost their car. That's not a small thing. That's someone's life disrupted.
• Insufficient oversight of third-party distributors — the brokers and dealers selling these loans are not being properly monitored by the lenders whose products they're flogging.

ASIC studied data from over 350,000 car loans across eight of Australia's largest finance providers, covering loans written between March 2023 and 2025. This isn't a small sample. This is the market.

The Dealer Finance Problem Isn't New — It's Just Finally Getting Official Attention

Here's what's been happening in Australian dealerships for years. A dealer doesn't just sell you a car. They also act as a credit intermediary — effectively a broker — when they arrange your finance. And historically, that arrangement came with a financial incentive: the dealer earned a commission based on the interest rate they put you on. The higher the rate, the bigger their cut.

That model — called flex commission — was banned in Australia in 2018 for consumer car loans. But as ASIC's new report makes clear, the structural problem didn't disappear. Dealers and brokers still have financial incentives that don't always align with getting you the best deal. And lenders have been allowed to look the other way.

Research from Money.com.au found that nearly half of Australians (47%) who later regretted their car finance said their main mistake was relying on the salesperson at the dealership to guide them on the finance. Another 35% said they didn't compare other lenders before signing. Those two statistics, together with today's ASIC report, paint a pretty clear picture.

The Average Australian Car Loan Rate vs. What Gets Advertised

The other thing worth understanding right now: there is a massive gap between the rates you see advertised and the rate you're likely to actually get. As of 24 June 2026, the lowest advertised secured car loan rate in Australia sits at 5.66% p.a. That sounds pretty reasonable. But the Reserve Bank of Australia reports that the average fixed-term personal loan rate — which includes car loans — is running at 9.06% p.a. That's a 3.4 percentage point gap between the headline and reality.

Why the gap? Because advertised rates are the best-case scenario. Your actual rate depends on your credit score, your employment type, whether you own property, the age of the vehicle, and — critically — who is arranging your loan and what their incentives are. When a dealer arranges your finance, you rarely know which of those levers is being pulled in your favour and which ones aren't.

On a $40,000 loan over five years, the difference between a 5.66% rate and a 9.06% rate is roughly $3,800 in extra interest. That's not nothing. That's a holiday, a year of groceries, or a decent emergency fund.

What the ASIC Report Means If You're Buying a Car Right Now

The timing of this report matters. EOFY is here, dealerships are busy, and the pressure to sign quickly is at its peak. ASIC has now formally put the industry on notice — but that doesn't mean every dodgy practice stops tomorrow. It means the regulator is watching. It does not mean you're automatically protected.

Here's what you can actually do today:

• Get pre-approved before you walk in. When you already have a finance offer from a bank or lender, you have a benchmark. The dealer has to beat it or match it — they can't just invent a number.
• Ask for the comparison rate, not just the interest rate. The comparison rate includes fees and gives you a true cost. If a dealer can't or won't give you a comparison rate, that's a red flag.
• Ask what commission the dealer earns on your finance. They are legally required to disclose this. If they're evasive, pay attention to that.
• Don't let them bundle the finance into the car price negotiation. These are two separate transactions. Negotiate the car price first. Arrange finance separately.
• Check what happens at the end of the loan. Some products — particularly Guaranteed Future Value (GFV) loans — come with conditions that can cost you thousands at contract end if you're not paying attention.

The Bigger Picture: Why This Keeps Happening

Australia's automotive finance market is enormous. Industry analysis puts it at approximately USD 7.59 billion in 2026, with dealer-integrated financing accounting for around 56% of all loan originations. That's more than half of all car loans in this country flowing through the very channel that ASIC just flagged as problematic.

Banks hold around 54% market share, but it's the distribution channel — the dealer finance desk — where consumer harm is concentrated. The lender sitting behind the scenes gets paid. The dealer gets their commission. The person who ends up on an unsuitable rate or who loses their car when hardship strikes? That's you. Or someone you know.

The Australian Finance Industry Association acknowledged the report and said the industry must lift its standards. That's a start. But standards being lifted over months and years doesn't help you if you're signing a contract this week.

Where Milam Does Things Differently

At Milam, we don't use a dealer finance desk. There's no broker in the middle marking up your rate to earn a commission. You know your weekly payment upfront — and unlike a standard loan where you hand the keys back at the end and walk away with nothing, Milam gives you an equity payout when you return the car. The vehicle's residual value comes back to you, not to a financier's balance sheet.

The structure ASIC is concerned about — opaque distribution, misaligned incentives, consumers bearing the cost of poor oversight — is exactly what we built Milam to avoid. Transparent terms. Lower weekly payments. Money back when the contract ends. That's the opposite of what today's report is describing.

If you want to understand whether Milam is right for your situation, speak to a financial adviser. But at a minimum, read what ASIC published today before you sign anything at a dealership this EOFY.