Car Brokers

November 12, 2013

Car shopping is time consuming, so a car broker can be a major convenience. Learn about types of car brokers, fees, and negotiation tips.

Cars brokers are a relatively new development on the automotive landscape. Much like mortgage brokers or insurance brokers, car brokers offer buyers the option of taking a back seat during the buying process. In addition to the convenience of not having to personally interact with car dealerships, whether new or used, a car broker can often secure a price lower than that which the buyer could have negotiated on their own. This is due to the fact that many car brokers were formerly car salesmen or involved in the car sales industry in some form or another. Additionally, car brokers have the advantage of searching for deals on car prices every day, so they generally have much more experience than a buyer searching on their own.

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Along with the convenience and advantages of working with a car broker, there are some things to look out for. It is important to be sure that the car broker is operating independently and not affiliated with a particular dealership or brand. This is a conflict of interest that puts their interests in conflict with those of their client, you. To learn more about car brokers read through the many informative articles available here.

Should You Use a Car Broker?

If you want to buy a new or used car, and don't have a lot of time or patience to go out and find good a deal on a vehicle yourself, you might want to consider using the services of a car broker. More and more consumers every day turn to car brokers to find low prices on both new and used vehicles. However, it is important to understand what a car broker can and can't do for you and get as much information as possible on ways that car broker can help you.

The idea behind using a car broker is very simple: you're not a professional car buyer or negotiator, so why attempt to negotiate a car deal with those that are professional sellers? With all types of financing fees, taxes, add-ons, commissions, etc. that may be involved with a car or truck purchase, using a professional car broker can many times give you an advantage in the process.

Because car brokers are professionals at what they do, most of the time they will usually be able to get you a better price than you can get on your own. However, one of the biggest advantages that car broker can offer is peace of mind in the fact you no longer have to search for a vehicle or negotiate a good selling price.

For a flat fee, most car brokers will do all the hard work for you. They will do the research, they will contact the dealers and they will fight on your behalf to get the best pricing possible. Although car brokers will never be able to purchase a vehicle for less than the dealership paid, they will almost always get you a fair and low price.

Types of Car Brokers

One of the hardest things when working with a broker is trying to figure out what kind of auto broker you may be dealing with. If you search your local Yellow Pages or the Internet, you will find plenty of individuals and organizations that claim to be car brokers; however, not all of them work for the consumer.

A true car broker is consumer driven and will usually work out of his/her home or small office and may only have one or two employees. These types of car brokers charge a flat fee for their buying services to any customer that wishes to use them. You can choose to use car brokers in your immediate area or one that is thousands of miles away. With the power of the Internet, car brokers can just as easily find deals in your area as they can their own.

Car Broker Pricing

Depending upon the type of vehicle and how expensive it is, car brokers will generally charge a flat rate fee of $200 up to about $1000. Many times the fee is based on what type of car you're buying and whether it is a new or used model. Some types of used cars and rare or specialty cars will generally carry a higher-priced fee since it takes more research and legwork to locate a good deal. You will find even when paying several hundred dollars to a car broker, they will generally save you much more than the fee they charge.

Car brokers are professional car buyers, and they know how car dealerships work and do business. Car brokers understand almost every factor and variable that can affect a car deal. They use their knowledge to secure the best pricing and deals for their clients.

Most of the time car brokers network with many new and used car dealerships and are often aware of dealerships that are willing to make deals to quickly move inventory and turn over car vehicle units. Most car brokers will charge a retainer fee to begin the car buying process. As a deposit, most car brokers will typically ask for an amount of about $100. The car broker will then go to work and find your next new or used vehicle. Usually, a good car broker can find a vehicle that you're interested in at an affordable price within two or three days. Sometimes it may take a little longer if it's a hard-to-find used or specialty type vehicle.

How Much Do Car Brokers Charge?

When it comes to the way car brokers charge for their services, there are couple of different methods car brokers are paid. The first way (and best method for you) that car brokers are paid is a flat fee payment arrangement. Many car brokers will offer their car buying services for a pre-arranged flat fee.

Generally, a flat fee amount charged by car brokers will range between $200 and $1000 depending on what type of vehicle you're trying to purchase. Generally speaking, car brokers charge less money for newer vehicles than they do for used because the research related to finding some used vehicles can be much more extensive than with new model vehicles.

On the other hand, some car brokers will charge you a percentage of the amount of money you save on a new or used car purchase. For the purposes of calculating a car broker's rate, most brokers will use the Kelley Blue Book value of a vehicle first to see how much you actually paid for a new or used car truck. Then, the car broker will assess a percentage rate to the difference and charge you that amount as his/her fee.

Unless you have no other choice, you should always try to find a car broker that charges a flat fee rather than one that uses a percentage rate method. Working with a car broker that charges or uses the percentage method will end up costing a lot more money and you may find that the savings that the car brokers offer are not as substantial. The reason for this is quite simple: the Kelley blue book value on many types of vehicles can be much higher than the average selling market price. While it appears you are getting a very good deal, the actual price you pay may or may not be a really low price. Using a car broker that charges a flat fee will almost always result in a better service and a lower overall cost of ownership for your next new or used car.

How to Find a Car Broker

A professional car broker service can help you save a lot of time and money when shopping for a used or new vehicle. The job of car brokers is to simply help you find the vehicle of your choice and to help you find the best price. If you don't have a lot of time, and don't want to search for vehicles and prices yourself, then using a car broker will make purchasing a new or used vehicle a lot easier and less expensive. So, here's a quick guide on how to find the car broker.

Step 1 - Visit Online Car Broker Sites
If you want to save some time, and head straight to the best online car broker site, direct your web browser to CarsDirect.com. CarsDirect has more than one and a half million new and used vehicles listed for sale, and helps thousands of customers purchase vehicles every day. In fact, CarsDirect.com has guaranteed low, no haggle pricing on new vehicles and also offers very low pricing on used vehicles through its VIP network of dealers. So if you really want to save yourself a lot of time, head straight to the CarsDirect.com website and find the best prices now.

Step 2 - Visit Wholesale Clubs
Popular wholesale member clubs like Sam's Club and Costco also offer car broker services. If you're a member, simply visit the customer service desk at your local warehouse and inquire about services they offer for finding discounted prices on new cars.

How to Negotiate with a Car Broker

A car broker can help you find great deals on a new and used vehicle. Car brokers are very experienced in all facets of car buying and know all the ins and outs when it comes to getting the best prices. However, you never want to pay too much--even for car broker services. So, here is a quick how to guide on how to negotiate a better deal with the car broker.

Step 1 - Find Brokers that Offer Flat Rate Pricing
First off, you want search for car brokers that provide their services for a flat rate fee versus a percentage of the savings. While the car broker might be able to save you a lot of money, paying the broker 25% to 50% of the savings quickly eats up any real savings. You could have probably gotten a better deal by yourself--so choose a flat rate broker.

Step 2 - Ask For a Discount
Although this seems obvious, the most important step to negotiating with a car broker is to simply ask for a discount. If the rate quoted to you sounds a little high, don't be afraid to ask for a 20% discount. The broker may say no, but they will probably counter with a 10% discount. If they are insistent that their rate is already low, ask how you can verify that fact.

Step 3 - Agree to Help with Search
If you really want to save a few bucks on the services offered by the car broker, help them out in their search. Go online and search for deals on the vehicle of your choice. Then, direct the broker to sites or dealerships that have the vehicle so they can go to work negotiating on your behalf. If the broker uses a source you referred him/her to, they might be more agreeable to accepting a lower fee.

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