Action Sought for Toyota's High Finance Costs

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The legal challenge claims that from 2010 to 2018, Toyota Finance Australia and its affiliated dealers engaged in secretive practices allowing dealers to inflate interest rates, thereby earning higher commissions. This scheme, according to the firm’s analysis, resulted in customers paying more than what was necessary for their vehicle purchases, without their knowledge.

A flex commission structure worked on a basic level, wherein the finance company set a base rate, but permitted the dealer to hike that rate at their discretion. Consequently, the higher the interest and the longer the repayment term, the more lucrative the commission for the dealership. Importantly, this mechanism was employed without the customer's informed consent.

The outlawing of flex commissions in 2018 was a step forward in consumer protection. However, the legacy of their use has led to various class actions aimed at recovering undue expenses borne by customers, with Echo Law's decision to sue Toyota as its latest instance.

Joining Echo Law are fellow claimants represented by Maurice Blackburn lawyers, who have taken action against numerous finance institutions including ANZ and Macquarie Leasing, suggesting a widespread need for consumer redress affecting over a million Australians to date.

Car owners who financed their vehicle through Toyota Finance within specified periods and had their loan facilitated by a dealership may qualify for this recourse. Echo Law’s Andrew Paull expressed that the financial repercussions for those subjected to these commissions are substantial, running into the substantial sums.

While registration for the class action is complimentary via Echo Law's portal, the broader sentiment within the industry remains cautious regarding dealership-facilitated loans. Founding expert Julian Finch of Finch Financial Services warned that dealers often bypass stringent lending parameters, which could disadvantage buyers in various forms. These could include a slew of service charges and marketing-related fees that inflate the cost of borrowing directly from dealerships.

In contrast, competitive financial offers from other lenders are spotlighted for their straightforward and cost-effective car loan terms-featuring interest rates as low as 4.99% and devoid of numerous ancillary costs typically levied with such loans.

Published:Saturday, 24th Feb 2024
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Finance News

Clear

Australians Turn to Personal Loans as Living Costs Soar

12 Jun 2026: Paige Estritori

In the first quarter of 2026, Australians have borrowed a record $5.1 billion in personal loans, according to the Australian Bureau of Statistics. This significant increase is largely attributed to escalating living costs, prompting many to seek additional financial support. - read more

Cigno Australia Penalised for Unlawful Payday Lending Practices

12 Jun 2026: Paige Estritori

The Federal Court has imposed a $7 million fine on Cigno Australia and BSF Solutions for operating an illegal payday lending scheme that breached Australian credit laws. Each company was fined $3 million, with their respective directors, Mark Swanepoel and Brenton Harrison, receiving individual fines of $500,000. - read more

The Hidden Dangers of Rolling Personal Debt into Your Mortgage

12 Jun 2026: Paige Estritori

As living costs and interest rates rise, many Australians are consolidating personal debts, such as car loans and credit card balances, into their home mortgages. While this strategy can offer lower interest rates, it carries significant risks, especially in a declining property market. - read more

Australian Credit Card Debt Climbs to $18.3 Billion: What You Need to Know

05 Jun 2026: Paige Estritori

Recent data reveals that Australian credit card debt accruing interest has reached $18.3 billion, marking a significant increase and underscoring the financial pressures many households are facing. This rise is particularly concerning as it coincides with elevated interest rates, making debt management more challenging for consumers. - read more

Key Takeaways from the 2026-27 Australian Federal Budget

29 May 2026: Paige Estritori

The Australian Federal Budget for 2026-27, announced on 12 May 2026, introduces several significant changes that will impact the financial landscape for many Australians. Key highlights include: - read more

Click for more Finance News