More drivers are choosing to use car finance brokers to help sort their finance over leaving it to the dealership. A car dealer may be limited to the lenders on their panel and they may not be suited to your situation. People with an adverse credit history or benefit income could struggle to get approved with a mainstream lender or finance from the manufacturer. Brokers tend to work best on used cars and can help you to find the best finance deal with the lowest APR rate. If you’ve never used a finance broker before, the guide below looks at how they work and why it’s great choice for both you and your wallet.
What is a car finance broker?
A finance broker is essentially the middleman between the customer and the lender and don’t directly offer any financial products themselves. The broker has a number of lenders on their panel who offer different finance packages. When you apply with a broker, they help you to find the most suitable car finance deal from the lenders on offer. If you receive more than one approval from the car finance company, they can help you select the cheapest rate. With your finance secured, you can shop for the car you want from any FCA approved car dealer in the UK and get a vehicle within your budget. They then introduce you to the lender and the lender will take it from there. You will then make your agreed monthly instalments back to the lender until the term is up.
Are car finance brokers free to use?
It can be worth checking before you apply but usually brokers are free to use. Brokers instead can charge the lender a commission for the introduction if you take out a finance deal with them.
Why choose to finance a car with a lender?
There are many reasons why drivers are choosing to finance their next vehicle through a car finance broker.
Save money.
Brokers can help you to save money by finding you the best finance deal from a range of lenders. Instead of applying with multiple lenders and trying to find the cheapest deal, the broker will do the leg work for you and select the best deal. The cheapest finance deal will have the lowest interest rate and monthly payments which suit your budget.
Get the car you want.
Buying a car through a finance broker means you can choose one within your budget. You’ve sorted your finance first so you can walk into the dealer just like a cash buyer but knowing you’ve got the best finance deal already secured. You can then buy a car within your financial budget and pay for it over the agreed term. Most brokers only as you to use a UK ca dealer who is reputable and have been verified by the Financial Conduct Authority.
Protect your credit score.
Did you know your credit score be harmed when you apply with lots of different lenders? This is because having multiple credit checks performed on your report at once can damage your score. Instead of making applications and credit checks with each lender, you instead only apply the once with the broker and they do the rest of the work for you! The lender you are matched with may want to perform a hard search on your credit and initially your credit score could take a hit when you take out finance. However, it should return to normal once you start making payments on time and in full.
A more personalised experience.
Brokers work on your behalf to get you the best finance deal possible. You will be assigned your own personal finance expert who helps to find the most suitable finance package. You can receive a more personalised experience when using a broker as they want to help you find finance.
