Dealer Finance vs Car Finance Brokers
What is the Difference Between Dealer and Broker Car Finance?
You’ve likely heard of dealer finance and broker finance, but what’s the difference, and which is right for you? It all depends on whether you want convenience or savings.
Most dealerships have a selection of lenders they can send your application to, and it is usually a quick process that can be done there and then, and you could drive your car out the same day. But there is a chance the dealer might add a markup to the interest rate offered by the lender.
Brokers don’t have a physical garage full of cars that you can visit and peruse, but many have websites with plenty of stock that you can look through. They can send your application to many more lenders and search for a more competitive rate for your car finance. They also guide you through the process of sourcing finance, offering impartial advice to get you in the best deal for you, not based on commission.
Here’s a breakdown to help you navigate the landscape and help you with how to choose the best car finance…
Dealer Car Finance Benefits
Getting dealer car finance is seen as a more convenient option for many as it is a one-stop-shop for both cars and finance. If you prioritise a speedy and straightforward process, dealer finance might be suitable.
If you have a car you wish to part-exchange, then this is easy and dealerships will take that money off the price of your finance package, whereas most brokers cannot offer this option.
Broker Car Finance Benefits
When you come to a car finance broker, they tend to have access to a wider panel of lenders, increasing your chances of finding low APR car finance.
A good broker will also act in your best interest, negotiating with lenders on your behalf to secure the most favourable terms. It can take slightly longer as they are shopping around for the best deal.
If you are unsure about your credit score and whether you will be accepted for car finance, many brokers such as CarMoney work with specialist lenders who can offer you credit, even if your credit score isn’t great.
Brokers also offer a soft-search option which gives you an idea of what loan interest rates you will be paying, before a hard credit search is done on your account.
Brokers can also offer a wider variety of different types of car finance such as no-deposit car finance, bad credit car finance and many more.
What Should I Choose?
If you value speed over savings, and you know what type of car you are after, then a dealership visit should be where you start. You could be driving your new car tomorrow.
But if you want to get the best possible rate, if you aren’t sure where you stand with regards to your credit score, or you simply want a soft-search quote to give you an idea, then a broker is where you should go first. A broker works for you and not the lenders and are not driven by commission.
If you come to CarMoney, we can give you the best of both worlds! If you have been to a dealership and have found a car that you want, we can finance it. So long as the dealer is in the UK and is reputable, we can find you the best rate from our panel of over 20 lenders.
