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

What a Steady Rate Setting Means for Boat Buyers

17 Sep 2026: Paige Estritori

The Reserve Bank’s latest decision to keep the cash rate steady gives Australian boat buyers a useful moment to pause, but it should not be mistaken for a guarantee that borrowing costs will stay simple or uniform. For households looking at a first trailer boat, a fishing upgrade, a personal watercraft or a larger family cruiser, the lending market remains highly dependent on borrower profile, boat type, deposit size, loan structure and lender appetite. - read more

Why hardship support is now a bigger loan issue

17 Sep 2026: Paige Estritori

Financial hardship support is back in the spotlight across Australia’s lending market, with regulators and consumer advocates paying closer attention to how banks and non-bank lenders respond when borrowers ask for help. For households and small business owners already dealing with higher living costs, tax obligations, insurance premiums and uneven cash flow, this is more than a compliance story. It is a practical reminder that loan stress should be addressed before it becomes a missed-payment pattern. - read more

Card Spending Trends Keep Personal Loan Planning in Focus

17 Sep 2026: Paige Estritori

The Reserve Bank of Australia’s latest retail payments update offers another useful snapshot of how households are managing everyday spending, card use and short-term credit. While payment data is not the same as loan approval data, it can still tell borrowers something important: the way money moves through a household each month can affect how comfortable a lender feels about future repayments. - read more

Mortgage Arrears Put Household Budgets Back in Focus

16 Sep 2026: Paige Estritori

Australia’s mortgage market is still showing resilience, but the latest banking indicators point to a household sector that has less room for error than it did during the ultra-low-rate years. APRA’s recent lending and asset quality data suggests that arrears remain an important signal to watch, particularly as higher repayment commitments continue to work through household budgets. - read more

Why More Australians Are Rechecking Their Debt Mix

16 Sep 2026: Paige Estritori

Recent consumer finance reporting has again highlighted a familiar pressure point for Australian households: managing several debts at once can become harder as everyday costs stay elevated. Credit cards, buy now pay later balances, car repairs, medical bills and overdue utilities can each look manageable in isolation, but together they may create a repayment calendar that is difficult to keep under control. - read more

Click for more Finance News