Auto Broker: Friends Or Enemies?

Buying a new car but have no time, experience or interest in dealing with car dealerships? An auto broker may be your answer to get the best car deals, hassle-free and promptly. But is this fact or fiction?

Auto brokers promise to eliminate the dealership-hopping you’d have to go through if you’ll like to find the best bargain. They have the expertise to get the best deals and those hard-to-get cars you might be looking for.

The procedure is fairly simple. You tell them the new car you want and within a few days they get quotes from multiple car dealerships and present you with the best options. All of this, of course, for a fee. Their argument is that buying a new car can be a long process, and doing it right may take more time or experience than you possess, so why not hire an auto broker to do it for you?

Seeing the good side

Any auto broker will tell you that he’s more than a middleman. His role is to make sure car dealers don’t take advantage of the consumer. They’re familiar with car terminology, financing, add-ons, insurance, taxes, fees and know the best automobile buying tips by heart. They are also aware of all manufacturer and car dealer incentives, how well the vehicle is selling, how many new cars dealers have in their lots and how long they’ve been there.

A major advantage is that their car market isn’t restricted to one particular area; a professional will perform nationwide searches for your perfect new car and best new car price. Auto brokers may also purchase vehicles in high volumes, so they’re able to get wholesale prices from car dealerships. Others may do business directly with fleet departments, giving them the edge to negotiate better deals. If you have a trade-in, a broker can also get a fair value for it, although it’s likely it won’t be higher than wholesale.

The price of broker services is usually a flat fee between $100 and $1,400, depending on the new car you want. Used, rare or very specific car requests are usually the most expensive. You’ll not only be paying for the time you’ll save and your piece of mind, but also for the better deals that you might not have been able to get if you had done it yourself. It’s not uncommon to hear of satisfied consumers that save a few hundred bucks on the original quoted price of a car by hiring a car broker.

If car dealers intimidate you, hiring an auto broker is definitely a good automobile buying tip you should consider. Or if you simply don’t want to deal with car salesmen and the negotiation process, it’s also a good option. Having this help definitely makes for a more pleasant car shopping experience!

Reality Check

However, auto brokers aren’t always the heroes they make themselves out to be. Some critics would say it’s just another mouth to feed that interferes between the actual cost of the new car and the margin of profit. Others say that with an auto broker you’re more than likely going to get a mid-range price, not the promised rock-bottom deals that an informed car buyer would get if he follows all the automobile buying tips.

Another disadvantage is that you have to know exactly what new car you want before you engage their services. You would miss the chance of finding a different car that would fit your needs and even surpass your expectations if you would personally visit the car dealerships.

Keep in mind that many brokers are former car dealers, so be sure that they are not receiving any type of commission from car dealerships. Although this practice isn’t considered illegal or unethical, it truly makes you wonder if he has your best interest at heart.


To avoid questionable brokers, follow these guidelines:

  • Ask lots of questions about their fee structure, background and history of the company.

  • Find out if the company receives anything of value from manufacturers, lenders, car dealers or advertisers. Of course, if they’re on a car dealership’s payroll they won’t admit it, so be prepared to read between the lines.

  • Word of mouth and references from people you know is the safest guide.

  • Call random car dealerships and ask what they know about auto brokers in your area.

  • Make sure your broker is licensed and bonded. The National Association of Buyers’ Agents and the Association of Automobile Buyers’ Agents establish guidelines that can give you some reassurance.

  • Don’t pay anything in advance (fee or vehicle) until you have possession of the new car. Make sure the broker agrees to this from the get go.

  • Before you sign a commitment to the auto broker, know what the new car price is so you’ll have a point of reference to confirm you’re getting a better deal.


Do It Yourself

A J.D. Power and Associates survey found that buyers who rely on the Internet to research the car they want, read reviews, follow automobile buying tips and use auto finders, often save between $300-$500 on their car purchase. Knowledge is power they commonly say, but in this day and age knowledge becomes profit. If you are up for the challenge, go out there and do it yourself.


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