By: Sarah E. Sanuth, is an insider in the automotive industry  with many years of experience in the car dealership and repair business

A car or auto broker is much the same as a broker in any situation, such as real estate and mortgages, who serve as a middleman between the consumer and the dealer, and sometimes the financial institution. They usually have many years in the industry, and many were once dealership owners.

While it is sometimes nice to have someone do the legwork for you, is it really beneficial to you the consumer? Here we explore the advantages and disadvantages of using such a broker with your next car purchase.

Advantages

1. Auto brokers know the ins and outs of the car buying process, even the behind the scenes stuff that you probably don’t know. They truly know how much a dealer can move on their price.

2. While car brokers may not know everything about a certain make or model, they can get advice from colleagues, which provides them with all available information at their fingertips.

3. Most charge a flat fee. This means if car brokers don’t deliver, they don’t get paid.

4. Auto brokers have a larger buying power, which can equate to a better deal.

5. Prices of vehicles range regionally, they have the power to buy a car that is farther away, which means you could save money.

6. Auto brokers will arrange delivery of the vehicle to your doorstep, usually fully reconditioned with all proper manuals for no extra charge.

The fee is small, usually between $200 and $1,000; with higher end and exotic cars costing the most The fee is typically between 1-2% for new cars and 1.5-3% for used cars. A $20,000 used cars should only cost about $350.
7. Even if you don‘t save money and just break even with fees, car brokers can save you valuable time and headache.

Disadvantages

1. Some auto brokers work on commission. This means the more you pay, the more they get paid.

2. There’s a high likelihood the auto broker knows the dealer. Personal involvement can equal conflict of interest.

3. They may not shop around. Sometimes used car brokers use a single or a handful of dealers. Some are employees of a dealership, which means they don’t work for you and aren’t looking out for your best interest.

4. Depending on your state laws, an auto broker may not be required to be licensed or bonded. This means they may not be regulated by the state.

5. Some car brokers get paid by the dealership, not you.

6. Many car brokers only handle new cars.

7. You may not be physically able to check out the vehicle yourself. You will have to rely on pictures and their word. Some don’t have a mechanic or mechanic experience to properly check out a used car.
8. There is usually no guarantee included with the vehicle. If you purchase it and it dies, you have to foot the bill.

9. Some discount clubs like AAA or Checkbook.org offer car buying services for little to no cost. So, check with them before looking for a broker.

Whether you decide to use a car broker for your next purchase, or do the foot work yourself; there are a few things that you need to do to protect yourself. If you decide to use one, ask these questions to ensure you’re dealing with an honest broker:

1. How do you get paid? Flat fee or commission?
2. Who do you work for? (A real broker will not have any association with a dealership.)
3. How do you find the vehicles?
4. Are you licensed and bonded? (You can check your local government’s website as well.)
5. Do you have a mechanic to inspect vehicles?
6. What is the guarantee? (A reputable broker will allow you 72 hours to have the vehicle inspected by your own certified mechanic and if there are issues, fix it. But anything after that period is on you. Make sure you read the fine print.)

And always check consumer review websites to see how others experiences have been with any specific auto broker you’re considering. You can even go a step further and call dealerships in the broker’s area to see how well they know the broker.

If you have a question you’d like our experts and community to answer, please ask your question at  http://forum.iseecars.com.  To start your used car search, visit http://www.iSeeCars.com  

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