Should I Use an Auto Broker?

Auto brokers are becoming more and more popular because of the economy and consumers looking to obtain the most car for their hard earned dollars. The question is do you really save that much by using an auto broker or auto buying service? Yes and no, as there are many variables when it comes to savings and the type of vehicle you purchase.

Auto brokers can save you thousands of dollars and a substantial amount of time if you use them correctly. The unfortunate part of the auto brokers is one of their qualities, minimal overhead. Many auto brokers work out of their homes or have a small office and a skeleton staff.

This facet of the business will allow you to avoid paying excess fees and profits needed by the dealers to maintain operations. This trait may also become a difficulty for some car owners who have used an auto broker when having issues with the vehicle or more in particular the paperwork (financing, licensing etc.). Salespeople, F&I or product advisors are famous for helping their customers but neglecting the ones they don’t know. A question to ask yourself; Are you comfortable fending for yourself in the event of on forseen issues?

Auto brokers save you money, in most cases, but many times don’t have the capacity to assist you any further then the pricing. If you can save a substantial amount it may be worth while to use an auto broker and forgo the services provided by dealerships and their sales staff.

The savings you receive from using an auto broker can range from thousands less than what the dealerships charge, to actually costing more then what the dealers may offer, with a little negotiating. How can this happen? Easy. If you are able to save $500 off the sale price of a new car with a broker, and then are charged $500 for his services, your savings are effectively negated.

Auto brokers sometimes are able to purchase vehicles for the same or near what the dealers pay, and then pass the savings on to you for a fee. The most common brokers though only arrange a discounted price from an actual dealer. A brokerage or auto finder fee can range from a hundred dollars or so to upwards of a thousand dollars or more. The rate which you are charged is based on vehicle type, distance for delivery and of course size of discount they can obtain.

The other form of savings you can obtain from an auto broker is time. Most consumers spend an average of 22 hours researching vehicles they may wish to purchase. The actual dealership visitations will on average take approximately thirty two percent of that time or seven hours. What happens in those seven hours? Vehicle presentations, test drives and of course pricing / negotiations. Auto brokers many times cannot supply a consumer with any of these services except pricing / negotiations. Although, this can still save you on average 1 – 2.5 hours and of course the relief from a headache, which many can feel after being shown this offer and that offer, countering those offers and then finally agreeing to a compromised price.

The one facet of the pricing process that many times cannot be handled by an auto broker though, is the trade in vehicle value. Many brokers work from a remote location and are not able to physically appraise a vehicle and therefore are not able to give you an accurate value. If you are able to find a broker that is able to appraise trade in vehicles, they may come with a caveat for consumers. Is the value they are offering the true value, or are they trying to make a profit from that as well as charging you their fee? Some dealers do it why can’t they.

The only way to know for sure is to do your own research. Visit a few dealers and have appraisals done. What is the average value you have been given? That is the true wholesale value and probably the only surefire way for a consumer to be sure of a fair value. By doing this you may have also been able to begin a trusting relationship with a dealership and may not have to pay an auto broker after all, if you don’t see the value in their services anymore.

Whether you choose to use an auto broker or just rely solely on the sales people at a dealership, research is key. If you truly spend 20 hours compiling your researched information and because of that you save $800.00 off the price of a vehicle and another $600.00 on your trade in, combined you saved $1400.00, which equals $70.00 per every hour spent researching in your pocket. Even if you use an auto broker to save some aggravation and pay their fees of $250.00 that still means you made $57.50 per hour. Not a bad rate of pay by any standard, in my opinion.

Auto brokers work well for some and lessen the buying experience for others. It is truly up to the individual consumer which route best suits their needs and wants. By being diligent and not taking all advice at face value, will allow any consumer the advantage of deciding the proper way to save the most money and aggravation in their next car buying experience.

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