Traditionally, getting a car on finance meant that you would head to your local dealer, find a car you want to purchase and apply for finance through the dealership. Whilst this can be a great way to save time, you may not be getting the best deal possible. Car finance dealers only have access to a limited number of lenders on their panel and you may not be getting the deal that’s most cost-effective for your circumstances. It can also be harder to obtain finance if you have a low credit score and your options may be very limited when apply at the dealer. Instead, more drivers than ever are taking the finance first approach and using a car finance broker to help sort their finance.
What is a car finance broker?
A broker is essentially the middleman between the lender and the customer. Brokers are often used to sort car finance, mortgages and insurance and work on behalf of the customer to find the best deal. Brokers will usually have a number of lenders on their panel and when you apply for finance with a broker, they will put your application in front of the lenders they think will be most suitable for your circumstances based on their expert knowledge. If you receive multiple finance offers, they can then help you select the lowest APR available help get you a better car finance deal. You then have the freedom to choose a car within your budget from any participating dealer in the UK!
Are brokers free to use?
It can be worth checking if the broker you’re looking to use charges any additional fees to use their services. However, most of the time car finance brokers are free to use and instead earn their money by charging the lenders. Brokers can get commissions from the finance lender for the introduction to the customer.
Top benefits of using a car finance broker:
There are a number of reasons why drivers are opting to use online finance brokers to get the best car finance deals UK instead of relying on dealerships to get finance for them.
1. Protect your credit score.
When you’re shopping around for the cheapest car finance deals, it can be tempting to apply with multiple lenders at once to see who will offer you the best finance. Or if, you’ve been declined by one lender, you may want to try others to see who would accept you. However, multiple applications in a short space of time can have a negative impact on your credit score and further impact your ability to get approved. Instead, you only need to apply with a broker once and if they use a free soft credit check UK, your score won’t be impacted and the application won’t be recorded on your credit report either!
2. Compare multiple agreements.
Car finance agreements can come in many different forms. The most popular in the UK are Hire Purchase, personal loans, and Personal Contract Purchase deals. All of which can also come with no deposit options, guarantors or may be bad credit friendly. It can be easy to get bogged down with so many finance choices to make so using a broker can make this decision a little easier. Appointed finance experts who work at brokers can talk you through the best options for your situation and help you figure out which one is right for your budget.
3. Get the car you want.
The finance first approach means you can get an affordable finance deal in place and then shop for cars within your budget! Using a car finance broker means you have the freedom to get the car you want from any participating dealer across the UK. As long as the dealer is verified by the Financial Conduct Authority and are happy to work with a broker, it gives drivers endless options when it comes to choosing their used car.
4. Better bad credit options.
It can be harder to secure a car finance deal when you have a poor credit history. Lenders may decline you if you’ve had problems in the past with meeting repayment deadlines as you’re more likely to default on future loans too. There are specialist bad credit brokers who work with bespoke lenders who can offer finance to those with bad credit. This means it could open up more finance approvals if you’ve previously been declined and means you don’t have to apply with multiple lenders.
5. Save time and money.
One of the biggest benefits to using a broker is the ability to save time and money. The finance process doesn’t have to be a slow one and soon as you have an approval in place from a lender, you can get the car you want from your chosen dealer! By allowing a broker to compare multiple finance agreements on your behalf, you can also get a finance deal with the lowest APR possible and save money!