Credit Intermediaries

In some markets, lenders provide finance through brokers or agents. This is particularly true in the motor finance market. More than half of consumers choose to buy their new cars though dealer finance using, for example, hire purchase (HP), conditional sale or personal contract purchase. In the non-motor sector, there are a variety of options to take credit in store. These include instalment credit, HP, conditional sale and store cards.  

The relationship between lender and agent or broker is based on partnership and, under the Consumer Credit Act, the lender is responsible for the conduct of the intermediary.

A report undertaken on behalf of the European Commission (EC) in 2009 found that finance companies and retailers or dealers collaborated closely, for example, on training and IT systems. Credit brokers operate in the secured or unsecured credit and leasing markets. In the leasing sector they are often seen as an extension of the lessor’s sales force.