Auto Brokers vs. Auto Dealers

Many consumers think or feel that if they buy a new vehicle from an auto broker they get their best deal, well…Not necessarily true. The Auto Broker will mark up the cost and charge it to the consumer, mark up the rate or money factor (if a lease), or charge a “Broker Fee”. The broker fee is the only fee that must be shown on the contract; all other fees can be hidden within the deal itself (payment etc…). Now, an auto broker can save you the time of searching and negotiating with the Dealer, but at a cost. Years ago, when buying a vehicle was so stressful, and you never knew what the lowest price was or could be, auto brokers made sense (before the I-Net). When you tossed in your trade in, the stress level skyrocketed, what is my car worth? How much should I expect to get on a trade in, etc.? Today, after years of regulations by the Government, Auto Dealers must follow strict laws and processes, they kind of brought this on themselves, but it was due and good for consumers. With a plethora of information at the consumers fingertips (I-Net/Google, that web thing or as Richard Rollins says, the Interweb) consumers can easily find the price range on a particular vehicle in about one hour (if the I-net dept. are doing their job, 15 minutes - this is another blog upcoming). You can easily send 5-10 e-mails or leads in about 30-45 minutes to several dealer in your area, or even better, send a few outside your area (this will give a greater view of reality). Why would you go to an auto broker and pay a fee? By the end of the day you will have a much better idea of what you should be paying for the vehicle you want. Next, send out an e-mail or lead asking what your payment will be? You can also reach out to any credit union or your bank and ask what your payment will be, here is the kicker, based on your portfolio or credit report/score. Once you have secured all this information, you can go into your local dealer, I like buying local because the taxes help build better roads and improve our schools, and show them your research, if they want to sell a vehicle, they will match or, even beat the prices you got on line. Why would you pay the fee from and auto broker? One last note on this, you can even reach out to an auto broker and ask them for their price and payment, then, get it it writing (always) and show this research to your local dealer. Lastly let’s discuss the trade in? What is my vehicle worth? What can I or should I expect for my current vehicle? Again, before the Interweb, you had to rely on the dealer or auto broker for the value; now you have the ability to search values on your own. You can go to any Dealers website that signed up with KBB (Kelley Blue Book) instant cash offer product (ICO). Please understand, this is a bit different then going to KBB for a value. ICO asks more questions regarding the condition, if there is or were any accidents or damage, whether it was ever a rental and maintenance history. This deeper dive allows KBB to give a more realistic value; KBB has algorithms built in to properly appraise without view or driving your trade. In addition, KBB-ICO is a product that the Dealer has agreed to utilize (if they are a member) and will give you this value (the price/value is e-mailed to you in a certificate form to bring to the Dealer) as long as you have imputed the information and condition accurately (this is always a interesting part of the equation, as the owner seems to think it is nicer than the Dealer). Once again, with this information available to you, why would you pay a broker fee? Always remember, an auto broker is "NOT" a dealer. They can't sell you a car cheaper than a dealer because they must buy the car or get the price from; you guessed it, a Dealer. The Dealer must sell the vehicle to the auto broker, or give the price to the auto broker (so they can figure out the structure and quote you a price or payment) before you can utilize the auto broker. With that said, why would you not go directly to the Dealer? Save the broker fee, buy direct. Delivery of your new vehicle is something that should be and must be remembered! An auto broker is not trained or certified to deliver your vehicle; remember, they broker all makes and models. When you buy or lease from a Dealer, you are getting qualified or certified employee of that brand, they understand the options and safety features of that vehicle and can demonstrate, properly, those features. I can't begin to tell you how many clients, which purchased from a broker, stop by my Dealership and ask "how do you operate the Bluetooth streaming product"? How do you use Apple Car-play? How do you, etc... I even have had several clients that did not know they could send a call to roadside assistance for a lock out, battery jump or gas? Nearly 99% of the time, they purchased from some broker who thought they had "Car-Intelligence", but quickly realized, they were wrong! Again, armed with this knowledge alone, why would you pay the broker fee? Most important, you can always get up, walk out and go to a Dealer of your choice, they will most likely be within a few dollars of each other, or, you can get up and go to the broker. Now that you have this information, and 20+ years of education in the automobile business, what do you think, Auto Broker or Auto Dealer?

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