Why Not Use a Car Broker?
How would you like to have an expert negotiator in your corner when you go to the dealership to buy a new or used car? It would be like walking into a really tough bar with a professional fighter. When someone starts trying to shove you around, just say, "Talk to my guy here."
Yesterday I had lunch with just such a person. Oren Weintraub, president of Authority Car Buying Specialists, spent years as a top car salesman and later a sales manager. It's safe to say he knows every trick in the car salesman's book...
But a funny thing happened to him. "As the years went by and my (negotiating) skills improved, it was hard to sit in front of these people I had a great rapport with and see them spend way more money than they had to," Weintraub said.
He decided to sit on the other side of the desk -- on your side.
Unlike most car brokers, Weintraub charges a fee to the client, not the dealership. Taking money from the dealership would be "a huge conflict of interest," Weintraub said. In his years as a sales manager he's seen car brokers present a good deal to their clients but not as good as it could be -- because they are secretly getting a percentage from the dealership.
Weintraub charges a flat fee based on the price of the car you're shopping for. Or, if you already have a deal in motion, bring it to him and see if he can improve it. If so, he will charge you 35 percent of whatever he saves you. He can also handle trade-ins by shopping your used car to his network of buyers.
One client who was negotiating for a BMW brought the deal to him. He saved her $6,000.
"We get great word of mouth," Weintraub said.
I'll be doing a longer interview article with Weintraub soon. But in the mean time, consider using a car buying specialist to save you time, hassle and money.
- Posted by
- Philip Reed May 30, 2008, 7:43 AM
- Permalink
- Categories:
- Buying New Cars
How easy is it to find car brokers? I've never heard of them....
Easy to find. Search under car brokers. They can really get some amazing deals.
I started a similar service back in 1987. Prior to that I had worked briefly at a multi-line dealership as a salesman. I was a young car fanatic, a serious car expert, and just wanted to be around cars. But I wasn't really aware of the oftentimes ugly side of dealership sales practices -- hence my brief stint as a salesman.
Apart from that, I was always advising friends and relatives on what new cars to consider (and what ones to avoid) based on their target price. I often went to the dealership to negotiate on their behalf, armed with invoice and pricing information I gleaned from printed (this was waaay before the internet) sources.
So after years of doing this I started "Good Buy" auto consulting. As with Mr. W, I also charged a flat fee, knowing that getting a bird-dog fee from the dealership would be a huge conflict of interest.
I didn't have much to invest in advertising and attempts at getting a financial backer proved futile, so it was a part-time business driven chiefly by word-of-mouth and a few features in newspapers.
whole thing smells, I know there can be honest people. But even with the buyer paying, who knows if you are really getting a good deal?
And why would the flat fee be different for buying a 10k car, or a 40k car? the transaction is the same.
Opfreak asks, "And why would the flat fee be different for buying a 10k car, or a 40k car? the transaction is the same."
Because there is a difference in value delivered to the buyer. A broker might save a $40k buyer $4k, but a $15k buyer $1000. You cannot charge these different buyers the same price, or else it won't be worth it for the low price buyer to pay $900 to save $1000 (or even worse pay $1500 to save $1000). And, you might then wonder why offer the service to the low price buyer: 1. Establishes relationship that might bring higher transaction price later; and 2. Spreads word-of-mouth.
Differential pricing helps different sets of consumers have access to goods & services they otherwise would not, and it also helps sellers extract more money. As long as the higher priced buyers are willing to pay the higher fee, who is hurt by this?
I think the key aspect here is that you have the option of going out to make your best deal, and if the broker can't save you more than their fee, you don't pay. If the broker saves you money, after paying the fee, then it is a win-win for everyone: you save some money you would not have otherwise saved and the broker makes some money and has a potential return customer.
I would give them a shot, nothing to lose.
dbt your looking at it backwards:
if I was the buyer of the 40k, I'd wonder what I was reallying paying for.
esspically if I used a broker for a 15k-20k car, Its not like car buying is THAT complicated.
i'd be miffed that a guy doing the same amount of work is getting paid 2x as much.
This is another reason why I'm not a fan of the real estate agent... in general the amount of work to be done is the same if you are selling a 100k house, or a 300k house. yet you expect to get paid 3x as much?
The guy fixing cars, in general, gets paid per hour, no matter what car you are getting fixed.
We make Car Dealers compete for your business...
www.yourcarneg.com
opfreak, you'd be miffed at paying more for something on a luxury car? Um, that's all luxury car buyers do. :)
Right now, luxury cars sell quite a bit better than non-luxury cars (a screwy situation, considering the down economy). Non-luxury brands are selling with very narrow margins, while luxury brands have very high margins and are less willing to budge. The luxury car broker does have more work to do.
It's also the way it works in every industry. The more you pay for a house, the more the agent gets. The bigger the loan, the bigger fee the bank gets. The more you put in the market, the more your investment banker gets. The nicer the watch, the more the salesperson gets. There's nothing special about the car industry.
I agree there is more margin in luxury vehicles, but there are sizable margins in some non-luxury brands as well. The car broker/negotiator is there to make sure the buyer doesn't get taken on the front end or the back end of the deal. I know from experience that not all brokers/negotiators do both, but there are a few that do. Without charging more. Your car negotiator is flat fee, without any hidden charges. We make car dealers compete for your business!
www.yourcarneg.com
bn, no i'd be mf'd at paying more for a broker.
for example, buying a honda:
Fit: 15k
loaded accord: 30k.
Same dealer, same sales guy, at the end of the day, how much more work is there for the broker to 'buy' me a fit vs an accord?
is it double?
Or BMW,
1 series: starts at 28k, can be loaded up to ~50k.
what added value do I get from a broker buying the 50k car vs the 28k car? or a high end 7 series closing in on what 80k?
In my eyes NONE.
Just like I said, I dont get realestate agents, the fee structure is stupid.
Look at the down turn in some housing markets. a house that was selling for 500k, is now selling for 250k.
2yrs ago the agent would make 30k, Now makes 15K.
What difference in service have you been provided? when the house was 500k, did you really get 15K more in services? NO.
Just because people pay it, doesn't mean its not stupid.
I suppose yourcarneg can voice their opinion, but can they stop posting friggin free ads???
I guess it’s good to have a car broker. Having a car broker saves the consumer time and effort of having to car-hunt at dealer lots, an activity which most people find to be less than desirable. Car brokers are essentially professional car buyers and the entire sale process is typically seamless and straightforward. I’ve got also some information about car broker at autopartswarehouse.com.