When you buy a new car, it is often the case that you will take some for of finance on the vehicle. The usual route always used to be a hire purchase agreement through your motor dealer, and this certainly became the rage in the 1980’s. However, the introduction of competition from the High Street banks, offering low rate personal loans as an alternative did cause motor dealers to re-group.
Motor dealer finance deals
The answer came with the introduction of Personal Contract Purchase plans, or PCP agreements for short. These gave a distinct advantage to motor dealers as they allowed a ‘deferred’ payment that traditional bank loans did not. The motor dealer was fighting back!
The introduction of PCP agreements in the 1990’s saw motor dealers regain lost ground in the car market. Suddenly the motor dealer had control of the consumers again, as they knew exactly when to approach the replacement of the current vehicle.
So how has the market changed in recent years, does the dealer still hold sway in the market? Well by and large yes, but that is not to say that there are not alternatives to consider. Today you can find independent finance brokers who specialise in consumer and motor finance. The offer independent lease and contract hire deals, that directly challenge the motor dealers offering. These deals can mean the car finance broker will supply the vehicle also, but quite often you can find the broker will arrange the finance for you, and pay the funds to your nominated dealer.
Independent Motor Finance brokers
The background of these independent finance brokers is quite often from the motor trade. They have either worked within car dealers or finance companies, and their knowledge of the industry is vast. Importantly they are not tied to one particular lender, which can mean they have access to a range of products and offers.
So all in all, the motor finance market has changed with more and more choice on offer. As with every other aspect of your car purchase, searching around for a deal on finance can also save you a tidy sum.