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What is a car finance broker?

If you’re looking for your very first car or you’ve never had a car on finance before, you may be wondering what your best options are. Financing your car through a car finance broker may seem like the best-kept secret for some. This is because some people only believe the best way to get finance is at a car dealership. However, car finance brokers can get you a better deal, be more efficient, and have access to more cars than your local dealer! The guide below explains how car finance brokers work and why you should consider getting finance through them!

How does a car finance broker work?

A car finance broker is the same as any broker, they act as the middleman between the customer and the car finance provider. Car finance UK brokers handle customer applications on their behalf and put them in front of their wide range of lenders. They then choose the best lender and finance package for the customer. Brokers help to arrange the finance, but they don’t provide the loan themselves. With the customer’s approval, the chosen finance deal gets paid out and then the customer can get any car from any trusted dealership in the UK!

What are the benefits of using a car finance broker?

There are a number of ways sorting car finance through a broker can benefit the customer.

1.      Explore a range of lenders

The biggest benefit to using a car finance broker is the ability to compare a wide range of lenders with one application. Some lenders do only work with one lender so it’s best to check first but the majority of brokers have long-standing relationships with numerous lenders. By using a broker, you can assure you get the most suitable and competitive rate for you.

2.      Protect your credit score

Making multiple applications using a hard search credit check can negatively impact your credit score. Making multiple applications with different finance lenders may indicate to lenders that you are desperate for credit and influence their decision on whether they should accept you for finance or not. When you apply with a car finance broker, they will usually only perform a soft search credit check on your file to take a quick look at your score. This isn’t recorded on your credit file and won’t harm your score. You would only usually be required to have a hard search on your credit if you are accepted for finance.

3.      Save time and hassle

Whilst many people think it’s easier to get finance through a dealer when you see the car you like, using a broker can be just as quick and easy. You can even get matched up with a lender the same day and find the car you want! Your personal finance expert will take car off the paperwork for you and also liaise with the lender on your behalf too.

4.      Huge car choice

You can take your finance deal that was supplied by the lender to any trusted dealership across the UK! This means you have to freedom to get a car within your budget. You can use your broker finance package to get a car from a private seller and it must be from a dealership that is verified by the FCA.

Are there any disadvantages of using a car finance broker?

Whilst car finance brokers can help get customers the best deal possible, there can be some things you need to look out for.

Research your chosen broker

Car finance brokers should be verified by the Financial Conduct Authority. There are many car finance brokers on the market and it’s important you use one that is established and reputable.

Less popular option

Many people are still under the impression that the best way to get finance is through the dealer. Car finance brokers tend to be smaller names in the business, but they have access to the rates that large, well-known lenders offer. This means brokers have the resources to dedicate their time to your application and match you with the best option for you.

Do finance brokers compare other vehicle finance?

Yes, many car finance brokers use lenders who can offer van finance, scooter & moped, taxi, and caravan packages too! It works just the same as car finance and they can compare a range of finance deals on your behalf from trusted lenders. You can then go shopping for the van, scooter, or caravan of your choice!

Abubakar is a writer and digital marketing expert. Who has founded multiple blogs and successful businesses in the fields of digital marketing, software development. A full-service digital media agency that partners with clients to boost their business outcomes.