Many people think the easiest way to finance a car is through a car dealership but what if you sorted your finance first through a car finance broker? The definition of a broker is ‘an independent person or a company that organises and executes financial transactions on behalf of another party.’ In this instance, a car loan broker takes your finance application and puts it in front a range of lenders. Brokers help match you up with the best finance deal, but they don’t directly provide the loan. The lender who you are matched up with provides the loan for you and that’s who you will pay back each month. Car finance brokers make money by charging the finance lender and not by charging the customer too! Let’s take a look at the ways that a car loan broker can save you money!
Compare a range of finance lenders
The biggest benefit of using a car loan broker is the ability to compare many lenders at once. Brokers only work with trusted and reputable lenders who offer a range of finance packages. Brokers can also compare different finance agreements such as Hire Purchase and Personal Contract Purchase to see which is best for you. Many lenders have different acceptance rates and criteria so it’s important that you shop around for the best deal but why not let a broker do the leg work for you!
Protect your credit score
Shopping around for the best finance deal is crucial but making multiple applications for finance in a short space of time can affect your chances of getting approved. It can also harm your credit score. You can protect your credit score by using a car finance broker who will only require you to apply once! Hard search credit checks are recorded on your credit file and allows can have a negative impact on your credit file. Many car finance brokers only use a soft search which isn’t recorded on your credit file upon application. You may be required to pass a hard search when you agree to proceed with your chosen lender.
Fast and easy service
Many people think the easiest way to get a car is to find the car you want a dealer and then apply for finance there. However, dealerships only use a limited number of lenders. You can apply online with a car finance broker and have a finance decision within the same day! You’re then able to get the car you want from any dealership that is verified by the Financial Conduct Authority. This means you can get the car you want within your financial budget!
Find more bad credit options
It can be hard to get accepted for any type of finance with a low credit score. However, many brokers work with lenders who can provide bad credit car loans with affordable monthly repayments. Having a lower credit score can mean you are offered a higher interest rate than those with a better credit score. This is because people who have a history of missed payments are seen as more of a risk to lenders. If you can, you should try to increase your credit score before you apply for finance as it can save you money in the long run. However, people with bad credit can also get affordability interest rates if they can prove their affordability.