Broker: Car Finance Jargon Busters
In car financing, you may encounter brokers who offer their services to make your car buying journey faster and more convenient. But what exactly is a car finance broker UK and do you need one? What can they do to make the process of getting car finance and buying your dream car much smoother? Let's find out in this car finance jargon buster guide.
What does a car finance broker do?
Car finance brokers act as a middleman between you and a car finance company. They help to find the perfect finance deal based upon your circumstances. If you are happy with the deal they find, the broker will then arrange it all for you. They work much like a mortgage broker, only specialising in car finance options.
Why Get a Car Finance Broker?
When you buy a car, you can buy it with cash or through car finance. If you choose to finance a vehicle, you may look for car finance online, go directly to a car finance company, or seek the services of a car finance broker to make the process easier for you.
The best car finance broker can help you get the best deal to fit your financial situation well. With a PCP car finance broker, for example, they will be the ones to deal with numerous car finance companies so that they can give you a shortlist of the best financing deals. This is great if you don't have a lot of time on your hands to research different deals from various lenders yourself.
Some car finance companies specialise in providing loans to a particular group of customers that have specific risk profiles. Having an online car finance broker might help you find the best lender for your specific financial circumstances so you'll have the best chance of getting approved for your car finance application.
What's important to note is that car finance brokers are not the ones who will lend you money to buy a car. Their services are as a third party and are limited to finding car finance deals and arranging the best agreement between you and the car finance company.
Car Finance Lenders vs Car Finance Brokers
Car finance companies often specialise in a particular group of clients. For example, a lender may cater to young drivers, applicants with low credit scores, or car buyers with excellent credit ratings. This type of risk profiling for their clients allows lenders to process applications more efficiently. They will also be able to predict which customers are most likely to fall behind in making payments. You can learn more about car finance for young drivers, and how to get a good credit score in our blog. We've even put together a guide on how to apply for car finance online you might find useful.
Dealing directly with a car finance company may take some work, especially if you don't know the specific group of customers that they cater to. Generally, you'll most likely be offered higher interest rates if you have a low credit score and a high-risk profile. This means taking out car financing might be more expensive for you.
Car finance brokers are familiar with different lenders and which groups those lenders can cater for. So if you get a broker, they can direct you to the right car finance company offering the best rates. This is one of the benefits of getting a broker. You don't have to guess which lender to get car financing from because you have an expert to guide you.
How Brokers Find the Best Car Finance Company
Brokers need several details about you to know which car finance company suits you best. For example, they need to know your credit score, how much you need to borrow, the type of vehicle you want to buy, and whether you're getting a hire purchase deal or a personal contract purchase agreement. Not sure the difference between the two? Check out our car finance hp and pcp guide.
Once they know these details, they will be able to assess your risk profile and find the most suitable lender to give the best rates. When you've chosen the best car finance company, the broker can help you by arranging the car finance agreement.
Always make sure you fully understand a finance contract before signing it. Since they are experts in car finance, you may ask them questions if there are things in the contract that are unclear to you. Of course, it's still best to ask the car finance company directly if you have more specific questions about your agreement.
Brokers can also offer soft searches on your credit profile so that they can examine your credit history. It will allow them to give you an estimate of what car finance companies would most likely offer you. Since it would only be a soft search, it won't affect your credit score like a hard search would.
Convenient and Time-saving Car Buying Journey
What's great about seeking the services of a car finance broker is you don't have to spend so much time researching the best car finance companies in the UK. Brokers specialise in car finance, so they can help you understand complex terms and concepts, help you prepare your documents, and guide you every step of the way.
If you don't feel confident about how to apply and process your car finance application yourself, it might be a good idea to get a car finance broker. However, bear in mind that since you're getting the services of a specialist, this means an additional expense for you.
Get Car Finance Fast with Carmoola
Carmoola is the modern way to get car financing, and by that, we mean quick, accessible and uncomplicated. With only your smartphone and the app, you can apply for financing in just a few minutes. You just enter your details and verify your identity using your driver's licence.
In under a minute, you'll immediately know the result of your application and how much you can borrow. It's as easy as that! No more paperwork or confusing documents to fill out. You don't have to wait for phone calls to know if you can get financing with Carmoola. Everything is designed to make car finance convenient for you.
Once your car finance application has been approved, you can use your virtual Carmoola card to buy your desired car! With Carmoola, you don't need to go to a broker because we've made things fast and easy and kept things simple for you!