|
Finding and negotiating for a car can be hard work. The good
news is there are professionals out there that will do if for you.
Is An Auto
Broker Right for You?
Author: Sheronde Glover
Women
hate buying cars. Better stated, women hate shopping for cars because most women
dislike the dealership experience. Not to mention the time and the energy that
it takes to buy a car. When I was shopping around for my car, it took me two whole
months and I was exhausted! I was overwhelmed and often frustrated and the experience
led me to where I am today, founder of Car-Buy-Her, so yes there were some pay-offs.
But
should it have to be so difficult? I don't think so. For those of you who embrace
the idea of negotiating and going to dealerships, Car-Buy-Her is working
diligently to make finding a good dealer an easier experience for you. And for
those others of you who just can't bear the thought of a dealership, I want to share
an alternative with you -- utilizing the services of an auto broker.
I've done a bit of digging and the first thing
I wanted to do was give you a better understanding of an auto broker, so I found
one (Josh Howell of 1Click Auto Brokers) and asked a lot of questions.
CBH: What's the difference between an auto
broker and an automotive
consultant? Are they one in the same? Provide different
services? An "automotive consultant" can encompass many different
things. It can
be a person who, for a fee, provides advice and guidance to
a potential car
buyer. It can be a person who actually performs the functions
of a
traditional auto broker, but prefers to refer to themself as a "consultant."
It is such a broad label that just about anything in the automotive field
could potentially fit into it. An auto broker usually is someone who assists
a consumer with the purchase
or lease of a vehicle. Often, the broker is the
one who locates, negotiates,
and procures the vehicle on behalf of the consumer.
The broker may actually
buy the car from the selling source and resell it
to the consumer, or the
broker may simply facilitate the transaction and,
ultimately, the purchase
or lease is between the seller and buyer. CBH:
Are most auto brokers licensed and bonded? Is this something a client
should
look for prior to engaging the services of an auto broker? I do believe
that working with a firm that is licensed (and preferably
bonded) has its
advantages. For starters, it demonstrates to consumers that
the firm has complied
with certain requirements designed to keep shady or
questionable people out
of the business. Most states that do have licensing
requirements do conduct
background searches on the applicants to ensure a
clean work and criminal
history. CBH: How does an auto broker become licensed and bonded? Each
state has it's own laws and certifications regarding auto brokering.
AUTO BROKERS ASSIST WITH LOCATING CARS
AND NEGOTIATING PRICING FOR NEW AND USED CARS
CBH
- What are the advantages and disadvantages to working with an auto
broker?
Why would someone work with an auto broker vs. just going
to the dealership?
Obviously, being an auto broker myself, I have a bias. I believe that
just
about every consumer benefits when working with a qualified, honest
auto broker
who charges a reasonable fee for his/her service. A good broker
not only saves
his/her client money, but also saves them the time and
aggravation that is
normally associated with buying or leasing a vehicle. I guess the only disadvantage
to using an auto broker would be to a person
who really enjoys the "grind"
of buying a new car. If a person enjoys
visiting multiple dealerships and
negotiating for hours at a time with each
one, they might find a broker's
approach a bit dull. But, if they truly care
about getting the lowest price
with the least amount of effort on their
part, then working with a broker
would result in a very positive experience. (As a side note, one way to
compare the results of working with a broker vs.
visiting the dealerships
directly would be to analyze their customer
satisfaction index (CSI). 1Click's
CSI is currently 99.1%. I can tell you
from experience that it is unlikely
you will find an auto dealer anywhere in
the country with a CSI in that neighborhood.)
CBH: What specific services do you offer?
We assist consumers with
the purchase or lease of their NEW vehicles.
We do NOT broker USED cars. We
will locate their desired vehicle through
one of the client's local auto dealers,
or, if necessary, we will
factory-order the car via an auto dealer. We will
negotiate the price as low
as possible utilizing our "fleet" discount
capabilities. "Fleet" discounts
are earned by "volume"
buyers such as us. The more cars you buy from a given
source, the lower your
price becomes.
If a lease is desired, 1Click will scan the market of potential
lessors
(this can include the factory programs such as Ford Motor Credit,
Chrysler
Financial Services, American Honda Finance Corp., etc., or independent
sources such as Wells Fargo Bank, US Bank, Bank of the West, etc.) to find
the source that will offer our client the best lease terms. If a client
has a trade-in vehicle, we will also gather bids on that vehicle
while we
are shopping the market for the new car. CBH - What are the average fees
for an auto broker? How do auto brokers
charge? What is a fair and reasonable
fee for an auto broker service? With regard to fees, this is where not
all brokers are the same. As I
mentioned earlier, some brokers will actually
buy the car from the selling
source (presumably the auto dealer) and resell
it to the client at a
mark-up. For example, the broker buys a car from a dealer
for $20,000 and
sells it to his/her client for $21,500, thus, making a $1500
profit. Many brokers will NOT actually buy the car but, instead, either
charge their
client no fee or a partial fee. In this instance, the broker
receives most
or all of his compensation from the auto dealer. The problem,
in our view,
with either of these types of arrangements is that there is an
obvious
conflict of interest between the broker and his/her client. In both
cases,
the more the client pays for the car, the more profit the broker has
earned.
Not to mention, in the first scenario, where the broker actually buys
the
car and then resells it, the client, technically, is buying a used car
because the broker was the original owner of record. This could affect the
client's rights under the lemon law of the state in which the transaction
occurred. If the state's lemon law only applies to the original owner of a
NEW vehicle, the client would have NO rights if, by chance, they buy a
lemon. As
stated earlier, 1Click Auto Brokers is a buyers agent. As such we never
buy
the car for resale and we never accept money from the dealer. We simply
negotiate
the transaction on our client's behalf and then charge a brokerage
fee if
the client buys or leases their new car through us. We calculate our
fee by
taking the vehicle's MSRP (Manufacturer's Suggested Retail Price),
a.k.a.
the "window sticker price," and multiplying that number by 2%. We
then "cap" that fee at $680. Mathematically, our cap is applicable whenever
the car's MSRP is $34,000 or more ($34,000 X 2% = $680). If the client asks
us to arrange the lease on the vehicle, we then charge an
additional flat
fee of $100. This means that our "absolute fee cap" would be
$780,
which would be for a lease on a car that had a MSRP of $34,000 or
more. Notice
our fee is calculated off of the vehicle's MSRP and NOT the vehicle's
ultimate
selling price. Why? To avoid any conflict of interest. It is
customary for
us to be able to negotiate prices far below MSRP and often
below the dealer's
actual invoice. If we based our fee on that low selling
price we would actually
lower our compensation with each dollar we saved our
client. Since we only
charge a fee if the client buys or leases their car
through us, it is in our
interest to get our client the lowest price or
lease payment possible. Since
our fee is based on the MSRP, the client's
savings does not affect our compensation
and, since we only get paid if they
buy/lease through us, we work hard to
earn their business so we do not end
up doing a lot of work for nothing.
CBH - What should a consumer beware of when selecting an auto broker? What
are red flags to look for?
If a broker claims to be licensed and/or
bonded, a consumer can verify
this by contacting the state's regulating authority.
In Colorado, that's the
Dept. of Motor Vehicles (Dealer Division). Another
great source is the Better Business Bureau. While I think it's a
definite
plus if the broker is a member of the BBB, even if they're not,
they will
likely have a record with the organization. Obviously, a brokerage
firm that
has a number of complaints with the BBB would be a red flag. I would not
recommend any broker that charges a fee regardless of whether or
not the consumer,
ultimately, buys/leases through them. If the broker wants
payment for his/her
"services," regardless of the outcome, there is no
incentive for
the broker to perform effectively for the client. Keep in mind, many brokers,
including 1Click Auto Brokers, require a
"retainer" or earnest deposit,
before they will commence the vehicle search.
This is okay provided the retainer
is fully refundable if the client is not
satisfied with the broker's results
(either in locating the vehicle or the
price the broker was able to negotiate). Lastly,
it's always a good sign if the company has a number of client
testimonials
either on their web site or some published data that they can
offer. This
would give prospective clients a sense of assurance that they
will have a
good experience with the firm. CBH - What's the best way to go about
hiring an auto broker? A personal referral from a friend or colleague
about a specific
brokerage firm is probably the best since you would know
the referring
source is reliable. You could also look at consumer advocacy
web sites. A consumer can also do a web search (i.e. Google, Yahoo!, etc.)
to find a
number of brokers. The consumer can then review the various companies'
web
sites to gain additional information for each one. Then, I would recommend
calling the company and actually speaking with one of the brokers to gain a
level of comfort. The company should have a toll-free number, a physical
address
(not just a P.O. Box) and should have live people answering the
phone. I would
be suspicious if when I called I always seemed to get someone
on a cell phone. The
firm should also accept credit cards. If they only accept cash and
checks
I would stay away because you would have no recourse should the
broker turn
out to be a scam.
CBH - What advice would you offer women when it
comes to working with an auto broker?
Quite frankly, I wouldn't have
any specific advice for women only. I
think ALL consumers should practice
common sense and diligence in searching
out and, ultimately, hiring a broker. ------------------------------------------------------------------------
So
that's it ladies, straight from the source. I want to thank 1Click Auto Broker's
Josh Howell for sharing invaluable information. I liked the company so much I
wanted to work with them. See our release Car-Buy-Her Selects 1Click Auto Brokers as its National Auto Broker for Female Automotive Shoppers to learn more about why we selected 1Click Auto Brokers.
Iif you decide you want to use the services of an auto broker, take a look at 1Click Auto Brokers. Say Hi to Josh and tell him Car-Buy-Her referred you. Remember 1Click Auto Brokers does NOT broker Used Cars. If you decide to use their services, please send us an email and let us know about your experience.
Josh shared a little more information about 1Click Auto
Brokers:
1Click Auto Brokers is listed
by www.TroubleShooter.com. The TroubleShooter
site is part of a national radio
show that highlights companies that are
good to work with and those that are
not. These type of sites are usually
pretty reliable because the source site
puts its reputation on the line by
referring its audience to these companies.
1Click Auto Brokers is located and licensed in Colorado and hold a "Buyers
Agent" license. This means, by legal definition, we assist consumers with
the purchase or lease of their vehicles in exchange for a fee that we charge to
our clients. BUYERS AGENTS ARE PROHIBITED FROM RECEIVING ANY COMPENSATION WHATSOEVER
FROM AN AUTO DEALER. This eliminates any potential conflict of interest with our
client since we only get paid by them.
| 
