Buying a new car can be a notoriously long, tedious process. Even after you’ve done all your homework online and have found the make, model, color and features you’re looking for, there’s still the act of negotiating the deal and making sure you’re paying a fair price.
Today’s online world has made the process of buying a car more transparent, but it still can be an arduous and emotional process. As a result, some buyers choose to use a car broker. As with any provider of third-party services, the key to getting the most bang for your buck is knowing how to work with them. Here is a breakdown of what auto brokers do and how to find one.
What does an auto broker do?
Simply put, an auto broker is a third party whose job is to assist you, the buyer, in the process of buying a car. Even if you know what type of car you want, there’s a certain amount of research that goes into buying a new car, including researching prices to help you decide which features are most important to you.
Tom McParland of Automatch Consulting says a car broker can be a non-emotional, unbiased partner who can keep his or her eyes on the end result.
“I don’t recommend negotiating in person,” says McParland, adding that because you have an emotional interest in the vehicle, you may be less likely to strike a hard bargain. This emotional involvement may lead you to hear exactly what you want to hear, or not ask all of the questions necessary, and that can lead to making a deal you might regret later.
“As a broker, I can negotiate a better deal on behalf of the consumers because I’m looking at numbers on a screen; I’m not attached to the car, so it’s all about who can give the best deal.”
Instead of searching for your preferred model and negotiating a deal, a full-service auto broker can complete the entire process for you, from start to finish. This can include finding the car, negotiating the price and completing the transaction. A broker will take you along for test drives to make sure you’re comfortable with the handling and ride of the car, and he or she can even help you sell your existing vehicle.
The main reason people choose to use a car broker is to minimize the amount of time (and stress) spent negotiating and to get the most savings possible.
How much does an auto broker cost?
Of course, the amount you are paying for a service such as an auto broker should be calculated into the overall price. Broker’s fees generally range from $200 to about $1,000, depending on the availability of the model you’re seeking. Finding used cars will cost more than new models because of the extra legwork involved. While there’s no question auto brokers can save you time on negotiations, you may find that you can command the same kind of savings as the broker if you’re already a strong negotiator.
Buying through a club
Another option is to use an auto club such as AAA or a wholesale club like Costco, which provide services very similar to what a broker will do for you, working out special pricing. Be aware, though, that not all cars can be purchased by these clubs, and they often have a list of specific vehicles for which they can obtain discount pricing. So if the selection of cars does not include the particular model you’re looking for, these clubs may not be able to help. Always check first to see if the vehicle you want is on the list.
What to look for in an auto broker
Finding a broker has gotten easier over time because you can now do a quick online search for auto brokers in your area. It’s important to find a broker with a good reputation and, if possible, one who comes with a personal referral.
Once you’ve found a broker, it’s time to do a bit more homework before you decide to use the car broker. Here are some additional steps you can take to check up on your broker to ensure you’ll be treated fairly:
- Make sure the broker is licensed and can legally sell cars in your state.
- Look online for feedback about the company and see what kind of a track record it has.
- Confirm fees; make sure the fees are at a flat-rate to avoid surprise charges.
For the right person, a good car broker can save hundreds to thousands of dollars and many hours of your time. Taking time to do your research will ensure that you find the right broker to help you get the best deal.
For more help on purchasing a car, check out our Buy a Car resources that can help guide you through the entire process.