The world of car selling is changing, and it means good news for car buyers. The traditional way of buying a car from a dealer’s shop has been online forever, and it’s really a game where the playing field is tilted heavily in the dealer’s give preference used cars to. The dealer knows all of the numbers involved much better than the purchaser, and so knows exactly where margins can be increased and reduced to maximise their profits while still appearing to provide a good deal.
It’s a bit like a casino; the punters at the tables may have a few individual wins occasionally, but overall the house always wins. Buying a car from a dealer is similar, in that you might cause them to drop the car’s price slightly or throw in some extras, but they get it all back again on the finance package or the other extras you we hadn’t awakened to the fact you even needed (but were convinced by the salesman that they were absolutely essential).
The internet is now some way to helping buyers, in that you can easily check prices from distinctive motorbike shops in every state. But that’s still just a starting point; a dealer can be happy to cut the price on a car if they makes it up elsewhere, and it becomes very difficult to stay on top of the discussions when you have a new car, your part-exchange (trade-in), finance, insurance, options and accessories all getting back together the final numbers. The dealer is expert at balancing all these golf balls at once, and they know how much they are making from each the main overall deal. The customer, usually, is utterly in the dark as to how much of a deal they are really getting.
More and more car buyers are now turning to a car buying agent or car broker to help them manage their car purchasing. Here the purchaser gets to play on a level field with the dealer, as the car buying agent or car broker usually has the same knowledge and expertise as the dealer to be able to negotiate on every part of the deal to the main benefit of the purchaser.
The other benefit from using a car broker or car buying agent is that it saves you an enormous amount of time. Researching cars and traipsing all over town to visit motorbike shops, getting quotes from different dealers on different types and comparing all the information is a tremendously mind-numbing exercise. A car buying agent or car broker can take car of all the playing around and allow you to concentrate on your job or enjoy your recreational time.
So what exactly does a car buying agent or a car broker do?
Let’s explain the difference between a car buying agent and a car broker.
With a car broker, you provide as much detail as you can about the car you are looking for, and the broker sources a vehicle which matches your desired specification as closely as possible.
A car buying agent offers a more comprehensive overall service, usually involving specific advice and recommendations on choosing a car and its specification to suit your needs, as well as the sourcing of the chosen vehicle. If you are uncertain on the best sort of car for your needs, a car buying agent’s advice can be far more valuable than the savings he or she may be able to get from the dealer. Choosing a a lot better car can be worth a large saving over all of your ownership period, even if the deal on the car’s price is not as significant. Many people have purchased a car completely improper for their needs, and using a car broker won’t prevent that. A good car buying agent, however, will help you ensure that you are going for a car which will do solutions for as long as you keep it.
Fees
Brokers and agents make their money from the fee charged to the client for their service, and/or a payment or commission from the dealer. This is an important point for you as a buyer; if your broker is being paid by a dealer, they are ultimately earning a living for the dealer rather than for you, meaning they may not be acting in your needs to secure the best car available at the best price possible.
To ensure that your agent is acting in your needs and not the dealer’s, you should always look for a car buying agent or car broker who has a clear fee structure and does not take payments or commissions from the selling dealer. The fees should be clearly explained, easily understandable, and relate to the service provided. If a broker markets their services as being free, then it almost certainly means they are being paid a commission or ‘finder’s fee’ by the dealership. If a representative or broker offers their advice as free, it is unlikely to be a properly detailed and analytical report which covers every part of your driving needs.
A car broker will normally charge a fee based on the value of the car they are sourcing. If this is the case, you should be clearly aware of their fee structure before you commence — for example, if the relevant price limit on their fee structure is £30, 000, a car costing £30, 001 may mean a much wider fee for the broker than the usual car costing £29, 999.
Some agents or brokers will charge an appartment fee for their services, and some may charge a fee based on the level of discount they achieve from the advertised price. This means that the more money you save, the more they will make and provide you some confidence that they are acting in your needs.
With a car buying agent, there will normally be a fee for their advice and expertise, and a separate fee for sourcing a vehicle. Again, you should know of how their pricing works, but don’t be put off by the idea of paying for expert advice as it may save you thousands ultimately. You may even use a car buying agent for advice on choosing a car but handle the purchase yourself. This is often the case with company car drivers, who have renting arrangements in place at their workplace but don’t know which car to rent.
To sum up, a car broker or car buying agent can make the process involving a car much more appealing and advantageous to the average consumer, saving a lot of time and potentially a lot of money.
Stuart Masson is founder and owner of the Car Expert, a London-based independent and neutral car buying agency for anyone looking to buy a new or car.