Online car loan brokers
Get help and save time when finding finance for your new set of wheels.
A car loan broker can help you find and apply for car loans, saving you time and money (or some lending expertise if you’re new to the game). And since many brokers are fully-online, you might not even need to get dressed. But you’ll still want to do some quick research to make sure you’re working with someone you can trust.
How do loan brokers differ from direct lenders?
A broker acts as an intermediary between you and the “direct lenders” (the companies that actually fund loans), so you don’t have to fill out multiple forms online with different companies in order to compare your options.
A broker can be useful if you want a good deal but don’t have the time to get quotes from multiple direct lenders. A good broker works with multiple lenders to find its clients the best rates and terms they’re eligible for. They find loans from banks and other lenders that can meet your needs.
Warning: late repayments can cause you serious money problems. See our debt help guides.
What are the benefits of using a car loan broker?
An online car loan broker can help you in a variety of ways.
- Protect your credit file. Every time you apply for credit, the lender runs a full, “hard” search of your credit file. This leaves a mark on your credit record and has a slight (but usually short-lived) negative impact on your credit score. Most lenders now offer an “eligibility checker” facility, which runs a “soft” search allowing you to find out before you apply whether or not you’re likely to get approved. A good broker can go one step further, effectively checking your eligibility with multiple lenders, through a single soft search.
- Compare lenders and secure a competitive rate. Going through a broker means you’ll be able to receive different loan offers from different lenders from a single inquiry – in other words, you’re shopping around to get the most competitive deals you’re eligible for.
- Save your time. Comparing multiple lenders, checking your eligibility with each… that takes time, and for most of us is, well, a little dull. Hand the task to a broker that you trust, with systems that can do the job in seconds, and you can get back to what’s important.
How can I choose an online car loan broker?
Choosing the right broker can help make the car-financing process smooth. Find out what sets these companies apart and what important information to look for before choosing one.
- Check the extent of its market coverage. Broker’s tend not to scan the whole of the market – it’s much more likely that they have deals with a “panel” of lenders, so it’s possible that you could find a better deal outside of this panel. As a general rule, the larger the panel, the better the chances of being offered competitive rates.
- Check it’s legitimate. Credit brokers need to be authorised and regulated by the Financial Conduct Authority (FCA). You can search the FCA’s register to make sure that the broker you’re planning to go with is regulated.
- Check its reputation. Before you commit to a broker and its affiliated lenders, you’ll want to know what sort of company you’re working with. What do review sites say about it?
- Pick your broker based on its specialties. If you have bad credit, you may wish to work with an online car loan broker that specialises in this sector of the market and works with lenders that cater to your credit range. Whatever your needs, there is likely a broker out there that can meet your expectations.
- Ask questions. You don’t have to stay quiet during the loan process. If you have questions, ask them – a decent broker will answer with prompt, practical assistance.
- Check the fees. Most brokers get a fee from the lender, not from the applicant, but it’s smart to make sure this is the case.
What to expect when working with a broker
An online car loan broker is quite impersonal. You might never go to a physical office to discuss your loan options, and much of your business may be conducted over the phone or online. If you like meeting a lender face-to-face and want personal interactions, an online broker may not be the right decision for you.
Getting all the right information is vital when deciding which broker you’re choosing. It’s okay to ask questions before agreeing to go with a car loan broker. Having a list of your loan requirements will go a long way in showing the broker what you’re looking for.
Are there any risks in using an online car loan broker?
The main risk is brokers that don’t have your financial interests in mind, that will effectively sell your inquiry to the highest bidder, regardless of whether or not it means you end up with a decent rate. Some brokers might not be upfront about how carefully they scour the market on your behalf, in which case you can send them packing.
How do I apply through a vehicle loan broker online?
The process can vary depending on the broker, but will typically follow these steps:
- You provide some basic details about yourself and the vehicle you have in mind (if you’ve already found one).
- Usually, in less than a minute, the broker finds loans that you’re eligible for and presents you with rates, plus monthly and overall costs.
- You compare the offers-in-principle that you’re presented with.
- You can pursue an application with one of the lenders or simply walk away.
What do I need to apply with a car loan broker?
If you’ve already chosen your car and dealership, provide information about the seller and the car make and model. The further you are in the car-buying process, the better your chances of being approved by a lender.
Documents needed to prove your identity, address, etc, can usually be verified electronically through your credit record (we know, it’s a bit spooky, right?).
Pros and cons of applying with an auto loan broker
- Bad credit is usually considered. Bad credit borrowers might have better luck finding a lender through an online broker who knows what you’re eligible for. Most brokers will have a panel that includes market-leading rate providers for excellent credit ratings, but also specialist lenders for those with damaged or limited credit histories.
- Possible discounts. Online brokers may have access to exclusive rates.
- Quick and easy. Besides helping you with the application, the online broker does all the work when it comes to shopping around for the best loan for your budget.
- Impersonal process. If you prefer face-to-face exchanges with lenders, then this solution isn’t for you.
- May not cover the whole market. A broker might have a small panel of lenders, and if that panel doesn’t contain one that can offer you a competitive deal, the broker will rarely admit it. Instead, it might try to send you to one of its lenders despite the fact you’d be better served by another, outside its panel.
Is there anything I should keep in mind?
Buying a new car can be exciting, but before you commit to a loan, keep these points in mind:
- Be realistic. A car is one of the bigger purchases you’ll make. Go for one that’s good value for your money and that you can afford to maintain.
- Thoroughly check the car. Before signing any legal contracts, make sure that the car matches the seller’s description. Check the mileage, features and general condition.
- Don’t settle. You don’t have to sign or agree to anything if you don’t feel comfortable with the seller or broker’s recommendations. This is good advice for both choosing your car and choosing your finance provider.
When it comes to financing your next car purchase, an online car loan broker can be a great option if you want to avoid filling out multiple applications and waiting to hear back from each individual lender. Make sure to spend some time checking out the broker you choose though and don’t forget to compare your other car loan options.
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