back to articles | May 23, 2023 | Moses Mwangi
Categories:   Tips & Insights For Car Buying    Vehicle & Buying Research
12 Tips for Choosing the Best Car Finance Broker
If you want to purchase a new car but have a money deficit, a car finance broker can help you get a car loan that aligns with your budget. A car finance broker acts as a middleman between you and the lending company.
If you want to purchase a new car but have a money deficit, a car finance broker can help you get a car loan that aligns with your budget. A car finance broker acts as a middleman between you and the lending company. The need to outsource for a car finance broker is that they save you the hassle, time, and money when looking for an auto loan. They can assess and get the best deal for you as the car buyer. Also, car finance brokers can give you expert advice, and most of them offer their services for free.
However, if you are not careful when choosing a car finance broker, you might be overpriced, get a low credit score, or fall into the hands of fraudsters. Here are 12 important tips you need to follow when choosing a car finance broker.
1. Understand what car finance brokers do
Most people get it wrong by not differentiating the role of a car finance broker from that of a car dealership and end up being conned. Car finance brokers do not sell cars. However, they help you get a potential lender to finance your car purchase. You need to research the roles a car finance broker plays in line with your specific financial needs.
2. Explore the available car finance brokers
With the recent growth in the car financing sector, most car finance brokers have also emerged. It is, therefore, important for you to conduct intense research before settling for a broker. You can also check their online reviews to determine their reliability.
3. Have a solid budget
Before you get a car finance broker, you need to plan a budget for the car you intend to buy. Your budget will determine the amount you have and the amount you need to borrow to purchase your dream car. When budgeting for your car, remember to include the running costs such as fuel, insurance, servicing and maintenance, and the licensing fee. You can look for budget planning tools to help you develop a proper budget.
4. Ask for license
With the rising need for cars and car loans, the law outlines that any person offering credit assistance services should be fully licensed. Therefore, you must ask for the license of your potential car finance broker before starting any negotiations. If they have a license, that is a green flag that they have a good reputation and that they are practicing legally. However, ensure that the license they use is valid to avoid falling into the hands of fraudulent brokers who use invalid licenses.
5. Check brokers accreditations
One of the greatest tips when choosing the best car finance broker is ensuring they are accredited by the lenders whose loan products they give. Your car finance broker should have a range of lenders you can choose from. This gives you a better chance of getting the best deal for your car loan.
Since every lender has different loan terms and conditions, accreditation confirms that your car loan broker stays current with each lender's requirements. A unique broker should have access to up to 30 lenders. With this number, you will surely have at least one lender tailored to your needs.
6. Consider the Level of experience
By researching the business, you should know how long the finance broker has been practicing in the industry. A reputable business should at least have an outline of what it does, who runs it, and for how long it has been in operation. This information should be displayed on the business’s social media platforms. Longevity expresses success and thorough knowledge about car financing, giving you extra confidence with the car finance broker.
7. Check online presence
Most things today, including car financing, revolve around digitalization. It would help to go for a broker with a strong online presence. The reviews given online give you a glimpse of the broker's reputation and the services they offer. If their work is praised online, it confirms that the broker is good for you. A broker with a strong online presence also portrays high openness and transparency. Pay attention to this factor when searching for the best car finance broker.
8. Determine the size of the brokerage
Most people do not pay attention to the size of the company. However, it would be best if you put this factor into consideration. A small business will likely give you a small range of lenders to choose from and, thus, a smaller amount for your loan. On the other hand, larger brokerages are likely to have access to many lenders and thus give out larger volumes of money. You need to check out the business size if you want better deals.
9. Consider the physical location
The best car finance broker is the one found in your country of residence. You must ensure you are dealing with a broker within your country, lest you work with fraudsters online. Ensure you confirm the location of the brokerage through google maps. You can also call the number on the business website and request to visit their premises; their response will confirm whether they are legit or not. A good physical location can ensure you have constant access to your broker and boost a company’s long-term performance.
10. Meet your broker
Though most people prefer approving the entire loan process online, you need to meet your broker in person. This will hasten the negotiation process more than when doing everything over the phone. It also gives you a better chance to know the kind of broker you are dealing with and whether they can be trusted.
11. Consider the ease of the process
The best car financing broker should keep the process fast and simple. Hence, it would be best to ask the broker how long it will take you to access car financing and what the process involves. Some brokers leave all the work to you yet charge you for their services. Some processes also involve a lot of paperwork, which can take time and effort.
12. Check the brokerage fees
Ideally, accredited lending companies pay most brokers a commission. However, you should be aware that some brokers will charge for their services. Some ask for up-front payment or add extra charges to your loan. When looking for a car financing broker, it is obvious that you are already facing a funds deficit for your car. It would be best to go for a broker who does not ask for extra charges. This is a way of saving your money.
A car finance broker can ease your process of securing the best car loan deal. Financing a car is essential, and the process requires you to be careful and to work with the right individuals. With the above tips, you can ensure you are working with the best car finance broker.