Auto Brokers: Can They Save You Time and Money?

Shopping for a new car can be a real pain in the trunk. Endless research, test drives, haggling with salespeople and digging through the fine print of sales contracts might leave you wondering if it’s better to just go around by bicycle instead.

One option, to take the stress and mess out of car shopping, is to hire an auto broker. These professionals specialize in locating cars and negotiating with dealerships to get the best prices for their clients.

Sounds like a good deal, right?

What is an auto broker?

An auto broker, simply put, is a person or company who does the work of buying a car for their clients.

They find vehicles, negotiate with dealerships, and may even deliver the car right to your doorstep.

Buying a car can be a long, confusing process for many people. Not only does it eat up a lot of time and energy, it’s hard for the average customer to make sense of all the fees, taxes and conditions. Many people would also rather not go head to head with pushy salespeople.

man in suit holding fist

If you look very cynically at the car buying process, it’s a duel of customer versus car dealer.

The customer wants to get the best car they can for as little money as possible. The dealer wants to get as much money as they can out of the customer.

The problem is that it isn’t an equal match. You aren’t a professional car buyer. But the dealer is a professional car seller. They know much more about the market and the technical details of purchasing, not to mention all the jargon, sales tricks and bargaining strategies.

This is where an auto broker steps in. An auto broker is someone who is on your side throughout the buying process, but who has all the knowledge and experience of a professional in the field.

Top reasons to work with an auto broker

A good auto broker can help you in a few essential ways.

  1. Save time and trouble.

Convenience and peace of mind are likely the most compelling incentives to hiring an auto broker.

Car shopping is a hassle. If you do it yourself, you’re looking at a long journey of researching models and comparing different car dealerships. With all the wheeling and dealing you’re likely to encounter at each dealership, it’s very hard to find out for yourself where you can actually get the best deal.

An auto broker can take the whole mess out of your hands. They will do all the dirty work and just come to you with offers that you can understand.

  1. Save money.

Auto brokers know the market. Even more important, they know how to cut through the hidden fees that dealers usually slip into the fine print of any sales contract. This means that brokers can often get much cheaper prices on the same car than you could get on your own.

Brokers will also help you take advantage of any rebates, incentives, warranties and other programs offered by the dealer, which otherwise you might not know about or realize you qualify for.

You might save hundreds or even thousands of dollars by working with a broker, though of course, you will have to weigh this against their fee.

  1. Be sure you get the right car.

Sad to say, most car dealers aren’t really interested in getting you the car you really want and need. They have more stake in selling you the most expensive car they can persuade you to buy.

An auto broker (at least a legitimate one; see the next section) has nothing to gain from upselling you on a luxury vehicle. Their business is simply to find you the best deal on a car that’s actually right for you.

Drawbacks of working with an auto broker

An auto broker can save a lot of trouble, but working with one isn’t always the right choice.

Hiring an auto broker means going through a third party, with potentially more expense and complication.

A good broker will typically charge from $300 to $500 for their services. Even if they find you a good deal on a car, you might still end up paying more.

You also have to be careful and find a trustworthy broker. Some companies call themselves brokerages but receive commissions or compensation from dealerships, or even work directly for a dealership. So you have to do your own research and find one who is really in line with your interests.

Auto brokers vs. the Internet

man working on laptop

Before the advent of the Internet, hiring an auto broker was the only way to avoid the trouble and uncertainty of car shopping on your own. Today, you can do your own research and comparisons online.

This definitely has reduced the demand for auto brokers. However, you may still benefit from brokers’ help negotiating with dealerships and simplifying the buying process.

How to find the best auto broker

As I mentioned earlier, it’s important to find an auto broker who is reliable, experienced and well connected. Don’t just go for the first one who promises a great deal. If it seems too good to be true, it probably is.

So what should you check for?

  • Make sure that the broker is licensed to sell cars in your state. Because auto brokers are legally defined as auto dealers, they must have a license from the state bureau of motor vehicles.
  • Ask the broker about his or her background, the history of the company and relationship to local dealerships. Especially check if they receive money from dealerships for making sales. If you want to be certain you’re dealing with an independent agents, call around to some dealerships and ask if them about the broker in question.
  • Look for online reviews from previous customers.
  • Ask about their fee structure. You want a broker who charges a flat fee, agreed to before purchase. (That said, you can expect to pay more if you’re in the market for a used car or a rare vehicle, since these require more work to locate than new models.)

In your first meeting with a broker, you will tell them what type of car you’re looking for and what your budget is. While many brokers and customers prefer to do this in person, there are some brokers who work online, finding deals for clients around the world.

You can also check out alternatives to auto brokers. Wholesale clubs like Costco, auto clubs like AAA and even sites like Carsdirect.com offer what are essentially brokerage services, but for free or very low rates. These services typically have an arrangement with one dealership to get special prices for members.

Conclusion

young woman in car receiving keys

Working with an auto broker is the most convenient, hassle-free and time-saving way to buy a car.

There are a few drawbacks, such as the fee, which might cost more than you save by the deals the broker finds, and the fact that you have to be careful choosing a broker you can trust with such an important transaction.

But in general, despite how the Internet has changed car shopping, it helps a lot to know an experienced professional has your back.

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