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Why Use a Car Broker?

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A good car broker should assist you with your car choice decision, and save you money, time, and frustration in the purchase of a new car. Here’s our analysis of the brokering process.

A car broker works in the same way as a mortgage broker who looks for the lowest interest rates, though a car broker’s job is to help you buy a car for the best possible price.

The car broker acts as the middle man between the car seller and buyer, and the service is often very handy.

Even so, car brokering is somewhat unknown to the public in Australia, but its ability to guide a buyer through the buying process shouldn’t be discounted for even the most mundane of car purchases.

What services does a car broker offer?

In general circumstances, car brokers are usually tasked with finding a specific type of car for a client. After being commissioned, they’ll tap into their wide-ranging database of dealers and wholesalers to look around for the car at the right price.

Not only is it convenient for the car buyer who barely has to lift a finger, it’s also quicker having someone do the running around for you who can utilise existing relationships to procure a car.

Car brokers are often associated with ‘fleet pricing’ which sounds enticing, but in reality it’s a little more complicated than that.

Part of their job is the negotiation phase in which they exploit their repeat business, which is a tool used to screw down the price, rather than buying in bulk. Another benefit is they spare you the responsibility and hassle of finding the right car and haggling for a good deal.

A car broker is only as good as their connections, which could lead to further discounts on things like insurance, servicing, finance and roadside assistance.

Do car brokers save you money?

Much of a car broker’s results depend on the type of deal they’re brokering, but in most cases they can save you money on a new car purchase – frequently measured in the thousands of dollars.

They can also work out deals that save money on accessories, options or add-ons which are indirect savings to a buyer.

They often use their negotiation skills to pit wholesalers and dealers head to head in a price battle, which ultimately means a lower price for the end buyer.

How much does a car broker charge?

A broker’s commission is typically built into the price of the car they secure, or paid by the vendor itself. This means you’re unlikely to ever see a bill from a car broker. Some do charge a fee up-front as a method to ensure that the buyer is genuine.

They can charge the dealer between $250 and $1000 for a single procurement. Sometimes they charge on a percentage basis, and prices can be even higher for valuable cars.

It’s best not to get caught up in what a broker charges, as long as the overall price of the car is less than you would find in a dealership.

Is it worth using a car broker?

A car broker is like any other service in the free market. They serve a purpose and can often save you both time and money. But a lot of the equation rests upon personal preference and whether you think you could get a better deal yourself.

While a broker might go off and find you a car, in some circumstances this can mean a ‘sight unseen’ buy without you actually being able to inspect it yourself – especially if the car comes from interstate.

The performance of a car broker can also be hard to judge, they won’t give you a scorecard to show how they’ve done – leaving you to wonder if you could have negotiated a better deal yourself. They should have connections with fleet managers and dealership management that remove that doubt for the purchaser.

By Tom Fraser, 07 Sep 2020 Car Advice
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