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What’s a credit broker and what should I look out For when financing a car?

what is a credit broker

When you’re looking for car finance, the chances are at some point; you’ll deal with a broker. But what’s a credit broker, and what do you need to know before dealing with them?

What’s a credit broker?

A credit broker is an individual or a company that helps people find credit by finding and putting you in touch with a finance company that can offer you a loan.

A car credit broker offers the same service – acting as a middleman between you and the finance or leasing company.

Many people find using a broker simpler than searching for finance themselves, as you can provide them with your details, requirements and budget, and they do all the legwork of finding the best deal for you.

What’s the difference between a broker and a lender?

The key difference between a broker and a lender is that a lender will be able to provide finance directly to you.

A broker will go between lenders to find the right deal to meet your needs before putting you in touch with the lender or even acting as a liaison.

What authorisation should I look for?

All legitimate credit brokers, such as Hippo, are authorised and regulated by the Financial Conduct Authority (FCA), who are there to protect consumers.

The FCA ensure that all credit brokers treat their customers fairly and ensure any communications are upfront and not misleading, such as making it clear that they are a broker and not a lender.

You can check the Financial Services Register to confirm that the FCA regulates a broker by searching the name (you should find the name on any communication such as a website, letter or email).

What to look out for

If you don’t fancy the idea of negotiating a finance deal in person, then a broker is ideal. However, you should always avoid any brokers that ask you for money up-front to find the best deal.

People at table discussing paperwork

It’s an FCA regulation that a credit broker must give you a written information notice setting out details of fees.

A reputable broker should also have good previous customer reviews, so it’s worth doing your homework first when choosing a broker.

Most brokers also won’t have the facility to take your old car in part exchange. At Hippo, we have the advantage of being both a dealer and a broker and offer a dual service.

How does a broker use personal information?

One big advantage of using a car broker is that you only have to make one application and submit your details once.

A broker will need your personal information to find a deal for you, as their role is not only to find you the best deal but also the deal you’re most eligible for.

Once your application details have been taken, any documentation you provide will go straight to the lender. The broker will not keep hold of these.

The General Data Protection Regulation (GDPR) also means that details, such as your email address for marketing, can’t be passed to third parties without your express permission.

Can a broker help with bad credit and other financial difficulties?

Financing a car can be hard work, especially if you’ve had financial difficulties in the past.

Some brokers, like us here at Hippo, will have access to specialist lenders who can offer finance to people with a variety of credit histories.

Lending money

We can help with whatever your requirements, saving you time and effort turning to a lender that may not be able to help you.

Read: Can I get a car finance with an IVA, CCJ or bad credit?

Reasons to get pre-approval from a broker

Yes, getting pre-approval from a broker will certainly save you a lot of time and hassle when it comes to applying for finance.

However, some brokers can do more than that by protecting your credit score in the process.

When you apply to a car finance lender for a quote, they usually conduct something called a hard credit search.

This not only leaves a record on your credit report, but it can also damage your credit rating if there are too many of them.

Piggy bank

Some brokers, like Hippo, will only ever use a soft search in the first instance to ensure pre-approval from the lender.

This way there will be no impact on your credit score and won’t affect your chances of borrowing in the future.

You can see if you’ll be approved for car finance quickly and easily by using our soft search Apply Now service. Just click the button below to get started.

car loan eligibility checker

Representative Example of Credit

We expect more than 51% of our customers to achieve this rate.

Loan Amount Total Cost of Credit Representative APR 60 Monthly Payments Deposit Amount Loan Term Total Amount Payable
£7,500 £3831 19.1% APR £188.85 £0 60 Months £11,331

All offers are subject to change at any time, you must be 18 or over and finance is subject to status, vehicle availability and terms and conditions apply. We can introduce you to a limited number of finance companies, a commission may be received. Failure to maintain payments may result in termination of your agreement and the vehicle being returned, this could affect your credit rating and make it more difficult to obtain credit in the future. All prices correct at time of publication.

We purchase a wide variety of vehicles from all over the country to ensure the best quality and value for our customers, all of our cars go through a thorough inspection process and if they do not meet our standards we do not sell them. We endeavour to inform our customers (where possible) the provenance of the vehicle they are buying and as such we will always inform you if the vehicle has previously been either an ex fleet or hire car. Should your vehicle be an ex hire/fleet car please do not be concerned as we would never value this vehicle differently when you come to part exchange it and there is no difference to the CAP valuation either.

You should try and estimate the distance you will travel as accurately as possible to try and avoid excess mileage charges at the end of your contract.

All pictures and/or photos and car descriptions on this site are for illustration and reference purposes only and are not necessarily the vehicle on offer. All offers are subject to change at any time and are subject to finance approval and vehicle availability. All prices correct at time of publication. E & OE.

Hippo Vehicle Solutions t/a Hippo Motor Finance is authorised and regulated by the Financial Conduct Authority. FRN 658076. We are a Credit Broker not a Lender and can introduce you to a limited number of lenders. Subject to status and to UK residents only (excl. the Channel Islands). Individuals must be 18 or over. Guarantees and indemnities may be required. We typically receive a fixed commission calculated by reference to the vehicle model, product or amount you borrow, for introducing you to a lender but this does not affect the interest charged on the agreement, all of which are set by the lender. Images for illustrative purposes only. Hippo Vehicle Solutions t/a Hippo Motor Finance is an Appointed Representative of AutoProtect (MBI) Limited for insurance distribution purposes. AutoProtect (MBI) Limited is authorised and regulated by the Financial Conduct Authority. Its firm reference number is 312143. You can check this at

We endeavour to ensure that all information including the specifications and finance availability are accurate. Whilst we make every effort to display correct information we are aware that errors may occur occasionally. We are not able, therefore, to guarantee the accuracy of all information especially when given to us by third parties. If you do require clarification of some information you have seen on our website, please email us at . This does not affect your statutory rights.

We are a broker not a lender and our registered office is Unit 26 Trident Park, Trident Way, Blackburn, BB13NU.