FINCAR

Car Brokers: Spotting the Best Deals for Buyers

Tuesday, 21 October 2008 18:10

Awareness of car brokers is Australia is relatively limited, but buying through a broker can deliver major advantages.

Car brokers were originally 'spotters', contracted by dealers to attract customers. If the customer purchased a vehicle from the dealer, the 'spotter' was paid a fee. The business model evolved, and now car broker businesses are set up to help buyers find the right vehicle. Often, these are one-person operations, commonly run by former car salesmen. The first pure online brokers appeared in about 2003, and now it is common for car brokers to offer services via the Internet.

Car brokers sourcing new vehicles deal with an established network of new car dealerships. When a client requires a new car, the broker contacts dealers in their network to find the best price and terms of sale. The broker will often collect the car and deliver to the customer. The contract is almost always between the dealer and customer, and the broker charges the customer a fee or receives a commission from the dealer. Although many customers assume that including a third party in the transaction adds cost, the reality is that the broker is often able to negotiate far better deals than the end customer will be offered.

Used car brokers

• Purchase cars at auction and on-sell to the customers, accessing car auctions that are closed to private buyers.
• Have established relationships with auctioneers and sellers of end-of-lease and repossessed vehicles that enable them to secure excellent deals that may not be available to the private buyer.
• Buy a used car privately and on-sell to a customer who needs to buy through a dealer to obtain finance.
• Provide statutory warranties on used cars (not generally available if the car is not purchased through a dealer)

Advantages of buying through a broker include

• Time savings: Brokers do the time-consuming 'leg work' of shopping around to compare prices, taking vehicles for a test drive, arranging mechanical inspections of used cars, and collecting the vehicle.
• Cost savings: Brokers are experienced negotiators and have up-to-date knowledge of used car values and currently offered specials on new cars. They may be purchasing a number of similar cars at once, for different customers, and able to negotiate a 'fleet' discount, even though each car is ultimately purchased by an independent buyer. They can often negotiate excellent deals.
• Peace of mind: Car brokers are more likely to know the warning signs to indicate that a car has been poorly maintained, suffered severe accident damage, or has mechanical faults. They also know which dealers are reputable and provide good quality after-sale service.
• Financing: Brokers have relationships with finance providers and know their requirements. They are generally able to negotiate finance quickly and efficiently.
• Insurance: Brokers can organise car insurance for you before delivering the car to you. Often, their network of contacts enables them to source excellent deals.
• Extended warranties and accessories: Brokers are well-positioned to negotiate favourable pricing for extended warranties, rust protection, paint protection, window tinting, and other vehicle accessories. They will arrange for any accessories to be fitted or work carried out prior to delivery, and will inspect to ensure the work is done professionally.

Consider using a reputable car broker to buy your next car. While there may be fees involved, a broker will usually save you more than any fee charged through informed selection and aggressive negotiation. In addition, the broker is likely to save you a considerable amount of time and inconvenience. In many cases, it is as simple as advising the broker of your budget and the type of car you seek, and the next communication is when the vehicle is delivered to your door! Should you have any problems or complaints, the broker will often negotiate with the seller on your behalf to resolve them.