MTF vs UDC: how the two car lenders differ

People searching for MTF against UDC are usually trying to work out which kind of lender sits behind a quote they have been given. This page does not rank them. We are a guide, not a lender, and we cannot say who will lend to you. What follows is what each company says on its own website, plus the legal floor that applies to both.

The short answer

There is no way to say one is cheaper without your own quotes. UDC publishes a narrower and lower range of rates for personal vehicle loans and a higher minimum loan. MTF publishes a wider range, a lower minimum loan and a local-office model. Those are differences in how each lender has set itself up, not a verdict on which loan will cost you less.

If you are being offered one of them through a dealer, ask whether the other can quote on the same car. Our page on dealer finance against a bank loan covers why that matters.

Who is behind each name

UDC. Its about-us page says UDC began in 1937 as Financial Services Limited, was bought by London-based United Dominions Trust in 1951, and was a wholly owned subsidiary of ANZ Bank New Zealand from 1980 to 2020. Since 2020 it has been part of the SBI Shinsei Bank Group. It describes itself as one of the largest finance companies in the New Zealand market and as the largest non-bank lending institution. So the common belief that UDC is bank-owned is out of date on UDC’s own account.

MTF. The company is Motor Trade Finance Limited. Its dealer pages say the model began in 1970 when a group of car dealers wanted a share of the profit that otherwise went to the finance company. Dealers in the network handle the application, approval and documents for their customers, subject to identity, affordability and background checks. The site also mentions franchise and recourse options for dealers. Customer-facing, it presents itself as “local money experts” with more than 50 offices.

What each says about the loan

Both state that approval depends on responsible lending checks. Neither promise applies to you until the lender has looked at your details.

Fees and early repayment

MTF’s rates and fees page lists, for secured loans: an establishment fee of up to $380, an agent fee of up to $250 when you are referred by one of its agents, a $7.54 monthly admin fee, a $10.35 PPSR fee, and a $17.00 early repayment fee with a further variable fee if market rates have moved. Penalty interest is 5% a year on top of your contract rate.

UDC’s own page states the rate range and says default interest is 5% a year on top of the contract rate. Its car loan calculator, which it labels an estimate and not an offer, includes a $249 establishment fee, a $10.35 PPSR fee and a 50 cent weekly maintenance fee. UDC’s fee schedule sits in a linked document that we could not read as plain text, so check it before signing. Its FAQ says early repayment brings a fixed settlement fee and a variable fee covering the cost of breaking the funding.

Both therefore charge a settlement fee and a variable amount. The numbers differ and the variable part depends on your contract, so ask for a settlement figure on your own loan.

How the application feels

MTF leans on a person. You can start online, but the page talks about a local lending expert reviewing your situation and a relationship with the same advisor. UDC leans on a form and a document upload: its FAQ describes a five-minute online application, then evidence of identity, address and income, and a bank-statement retrieval service for income and expenses.

If you like talking to someone in town, that favours the MTF description. If you prefer to finish at your own pace online, UDC describes that route. Neither preference says anything about price.

UDC also describes a conditional approval, valid for 30 days for consumer loans, so you can learn how much you could borrow before looking at cars. MTF says exploring your options and starting an application has no impact on your credit score.

The legal floor under both

Both are credit providers under the Credit Contracts and Consumer Finance Act, now overseen by the Financial Markets Authority. In practice that gives you the same baseline with either name:

• a written disclosure of the interest rate, fees and payments before you are bound
• a lender duty to make reasonable inquiries so that the loan suits you and is affordable
• membership of a dispute scheme you can use for free
• protection against unreasonable fees, including when you settle early
• a right to ask for help if unforeseen hardship hits your repayments

The detail of each is on the Consumer Protection site linked below. The point for this comparison is that you do not need to pick a lender to get the protections.

Choosing between them

1. Ask for the same loan from both. Same amount, same term, same repayment frequency.
2. Put the totals side by side. Look at the total repayable, not the weekly figure. The comparison rate guide shows how fees get folded in.
3. Check minimums. A loan under $5,000 is outside UDC’s published minimum, while MTF’s published range starts at $2,000.
4. Think about the car. If you are buying privately or at auction, check that the lender will fund it and ask what it needs from the seller.
5. Ask about the exit. A settlement quote on day one tells you what leaving early costs.
6. Keep a third quote. A bank or another finance company gives you a reference point. See bank vs finance company car loan.

A worked example

This uses invented numbers. They are not MTF’s or UDC’s, and no lender has quoted them.

You borrow $20,000 over four years, repaid monthly, and the establishment fee is added to the loan.

• Offer A: 12% a year, a $350 fee and a $7 monthly fee. The repayment is about $543 a month and you repay about $26,059.
• Offer B: 10.5% a year, a $250 fee and a $2 monthly fee. The repayment is about $520 a month and you repay about $24,982.

The gap is about $1,077 across the loan. A lower rate with heavier fees can end up costing more than it looks, which is why you compare totals and not headline rates.

Next steps

1. Decide your amount, term and the repayment you can carry with a buffer.
2. Request written offers from both. Ask for the rate, every fee and the total repayable.
3. Check each lender on the Financial Service Providers Register and confirm the dispute scheme.
4. Ask for an early settlement figure.
5. Read the disclosure statement fully before signing.
6. If you want help comparing, our /check form passes your details to a broker partner, who compares lenders for you and calls you back. Our car finance broker guide explains what a broker does.

Checklist

• You have two written offers for the same amount and term.
• The totals include every fee.
• You know whether the loan is secured on the car.
• You have an early repayment figure from each.
• You know which dispute scheme covers each lender.

Red flags

• A “from” rate with no way to see your own.
• A fee you only see at signing.
• Insurance added to the loan without its own price.
• Being told a loan is certain before the lender has seen your details.
• Pressure to sign today.

If repayments become hard, tell your lender early and call MoneyTalks on 0800 345 123.

Sources

• MTF: interest rates and fees
• MTF: car loans
• MTF: contact and complaints
• MTF: dealer ownership model
• UDC: car loans
• UDC: personal FAQs
• UDC: rates, fees and documentation
• UDC: about us
• UDC: make a complaint
• Consumer Protection: what lenders must do
• Financial Markets Authority: credit law changes