5 signs you're overpaying on your asset finance (and how to fix it)
The advertised rate on a finance quote tells you almost nothing on its own. Two quotes can have the same headline rate and very different actual costs. Two can have different headline rates and identical effective cost. The trick is knowing where the cost actually lives.
Below are five signs you're overpaying — and how to find out cheaply, before you sign.
1. Your comparison rate is far above your headline rate
The headline rate (sometimes called the "advertised rate" or "interest rate") is the cost of borrowing the money. The comparison rate is the headline rate plus the fees, expressed as an equivalent annualised cost.
If your headline rate is 7.95% and your comparison rate is 9.4%, the fees are doing a lot of work. That gap is real money — typically $1,000–$3,000 on a 5-year asset finance deal — and it ends up in the lender's pocket, not yours.
The fix: Always ask for the comparison rate in writing. If a lender quotes you a headline rate without a comparison rate, ask why. Anything more than ~50 basis points of gap should prompt a question about which fees are responsible.
2. The documentation fee is over $600
Asset finance documentation fees in Australia typically sit in a band of about $300–$595, depending on the lender, the deal size, and the asset type. Some are lower for repeat customers or sub-$50k deals. Some are higher for complex or specialist transactions.
If you're being quoted a doc fee of $900, $1,200, or higher on a vanilla asset deal, you're paying through the nose. Dealer finance is the most common offender, because the doc fee includes the dealer's referral commission. A broker-direct deal cuts that out.
The fix: Ask for the doc fee in writing as a separate line item. If it's above $600 on a standard deal, ask why and what's included.
3. There's a balloon you didn't ask for
Dealers love balloons (also called "residuals" or "final lump-sum payments") because they let them advertise a low monthly repayment. A $80,000 asset financed over 5 years with a 30% balloon has a much smaller monthly cost than the same asset with no balloon — because at the end of the term, you owe $24,000 in one lump.
A balloon isn't inherently bad. It's a structural choice, and it suits some businesses (especially if you plan to refinance, trade in, or sell at the end of the term). But if you didn't ask for one and you don't have a plan for the lump sum, you're paying for a feature you don't want.
The fix: Ask what the balloon is, and what your repayment would look like with no balloon. Then choose, deliberately.
4. The term is longer than the asset's useful life
A 7-year loan on a ute is probably fine. A 7-year loan on a piece of equipment that has a 4-year useful life is a problem — you'll still be paying for the asset after you've replaced it.
Lenders sometimes nudge tradies into longer terms because it reduces the monthly repayment (and locks you in longer, generating more interest). The total cost of borrowing rises in step.
The fix: Match the term to the asset's economic life. Vehicles, 5–7 years. General equipment, 3–5 years. Specialised equipment that depreciates fast, 3 years or less.
5. You haven't been shown the second-best quote
This is the quiet one, and it's the most expensive of the five.
If you walked into a dealership, the dealer ran their finance, and you've been shown one quote — that's not a finance market. That's a sales pipeline. Asset finance is genuinely competitive in Australia. There are 30+ lenders who actively quote on tradie deals, and the spread between the best and the median is often 1–2 percentage points.
On a $80,000 asset over 5 years, a 1 percentage point difference is roughly $2,200 in your pocket. On $150,000, it's $4,100. That's not a rounding error.
The fix: Always have at least two quotes in front of you before you sign. The easiest way to do that is to use a broker who shops your deal across multiple lenders — and shows you the comparison side by side.
What "good" looks like
A good asset finance deal in 2026, for a clean ABN profile with a sensible asset, looks roughly like this:
- Headline rate competitive with the current market (varies by deal — your broker should tell you what's reasonable for your profile)
- Comparison rate within ~50 basis points of the headline rate
- Documentation fee in the $300–$595 range
- Term matched to the asset's useful life
- Balloon you've consciously chosen (or no balloon, also a conscious choice)
- At least one alternative quote so you know you're in the market, not just in a pipeline
If your current deal misses two or more of those, you're probably overpaying. The amount usually surprises people.
If you want a second quote — no obligation, no impact on your credit file unless you proceed — tap any asset on the home page or drop us a line. We'll compare your current deal to what we can find across our lender panel, and tell you straight whether it's competitive.