Car finance is one of the most popular ways for drivers to get a car and pay for it in affordable chunks. It can be hard for drivers to save up enough money to get the car they want with one lump sum payment. When you think of getting car finance, you may think of heading to the dealership where you’ve seen a car you like and then applying for finance with the dealer. However, you could be missing out and spending more money than you need to! Usually, car dealerships are limited to a small number of lenders on their panel. Choosing to use a car finance broker instead can help to save you time and money!
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What is a car finance broker?
A car finance broker is a third-party company who helps customer get a car finance deal. They act as the middleman between the customer and the lender and helps to find the best finance deal based on the customers situation and eligibility. A car finance broker has multiple lenders on their panel and helps to compare a range of finance products and select the most suitable. Brokers are usually free for the customer to use and instead make their money by charging the lender a commission if the customer decides to take out finance with the provider. Some brokers could charge an admin fee too so it’s worth asking before using their services.
What are the benefits of using a car finance broker?
Many drivers are still not considering using a car finance broker to sort their finance but they could be missing out on the best finance deal possible.
1. Save money
A car finance broker can save you money by helping you get the best deal possible. If multiple lenders on the brokers panel wish to offer you a finance deal, the broker will assist you in choosing the best deal with the lowest interest rate or monthly payment, helping you to save money in the long run.
2. Get the best car finance deal
When you apply for finance at the dealership, you can be limited to only a few lenders. If your credit situation is adverse, you may not get the best deal for your situation or you may even be declined a car loan. There are specialist bad credit brokers who work with lenders who want to make car finance as accessible for as many drivers as possible, no matter their credit file. Using a broker could give you access to multiple lenders at once and helps you to get the lowest rate of finance available to you.
3. Protect your credit score
When you are searching for car finance, you may be tempted to apply with multiple car finance lenders to get the best deal. And whilst this is a great way to shop around, you may be damaging your credit score in the process. When multiple finance lenders run a credit check on your credit report in a short space of time, it can have a negative impact on your credit score. Instead, you can protect your credit score by using a car finance broker. You’ll only need to apply once with the broker, meaning only one credit search gets performed!
4. Get the car you want
When using a car finance broker, you can get the best finance deal for your situation from a panel of lenders but which cars can you buy? Usually, car finance brokers deal in used cars but they give you the freedom to get the car you want. As long as the car is in your financial budget, you can get any car from any UK dealership! Meaning you can shop locally or further afield in the UK. Most brokers will ask for the dealership you choose to be verified by the Financial Conduct Authority which means no private sales or dodgy backstreet dealers.
