If you are ranked above CPL, married and in quarters, over 30, based in the UK, and have a good credit history, you probably don’t need to use a broker.
Car dealers, especially new car dealers, are under significant pressure often to firstly sell cars, but also to keep registering new cars. This means that they can often have very attractive finance offers, and often these are subsidised by the profit from the sale of the car to show very low APR figures. This means that the dealer actually pays the finance company in some cases to provide a very low APR figure to encourage you to buy a new car, and the money to do this either comes from the profit of the car, or the manufacturer will pay this money as a bonus payment to the finance company or dealer, to compensate them for this cost.
The margins on these type of deals can be very tight for the lenders, and they want to be absolutely sure they are going to get their money back. This in turn means that your personal application needs to be very strong to be approved for these types of schemes. This is where a broker can often really help.
Lenders usually have one product, and you either fit, or you don’t. If you do not fit for any reason, they will simply decline your application. When you are in the Forces, some of the circumstances you have that are directly related to work can mean that you do not meet the credit score requirements that a lender may have. Firstly, and probably most importantly, serving members who are not married and living in barracks have the greatest issue. A barracks is not a normal civilian address, and even if you have registered you bank, phone, and other credit agreements there, it can be really difficult to get accurate credit search and score information back. It is similar to you being a mechanic and giving the workshop you work at as your home address. Credit search systems are not designed to work with commercial or work addresses and will often not give an accurate credit score. The same happens if you have been abroad, you can’t credit score a foreign address.
Another thing that happens is that if you have had many addresses as a result of changes at work, although this is perfectly normal if you are in the Forces, it is not viewed positively from a credit score point as a civilian who moves often is perceived to be less stable, and harder to locate in the event of a problem, therefore presenting a greater risk, and therefore producing a lower credit score.
All of these issues come about as the credit scoring systems are designed for the civilian majority, not the Forces minority, and these days many lenders accept or decline based on score alone.
If you are in the Forces and you make an application to a lender, they usually have one product, and if they take issue with any of the above mentioned issues Forces customers face, often they will simply decline your application. A broker, and in particular an Armed Forces broker as we are, will understand the unique circumstances Forces personnel have, will have access to many lenders, and send your application to the lender most likely to approve you, and give you the best deal for your personal situation.
As mentioned above, if you are ranked CPL or above, you live in married quarters or your own civilian property, you have a good credit history, and you have lived in the UK for over five years, chances are you don’t need a broker as you will look no different to a normal civilian application, and you may well be lucky enough to have lenders fighting over themselves to have you as a customer. But if you do not fit their criteria, a broker can be really helpful in giving you access to a wide range of lenders who will consider different circumstances, and get you the best deal available to you at the time.
Many of our customers come to us because they have been declined for finance elsewhere. Many of those customers have done nothing wrong and their applications have been declined purely because they have a low risk score due to their circumstances. For these customers we are able to provide low rate finance options that will often be better than available to civilians of similar age and employment level. Some of our customers have had issues with credit in the past such as defaults or CCJ’s, we can also often assist these customers although the offered rates of interest are sometimes higher to account for the poor previous history and increased risk you present.
Whatever your circumstances, we offer a lowest rate guarantee to all our military customers, please see the website for details of our guarantees and services.