Would you use a broker to buy a car instead of salesman/dealer?

Hi all, long time reader that posted once before but have another question for everyone. Not trying to sell anything, just asked for your opinion if this a real option to move forward.

Ive spent several years in the cars sales industry working for one brand, out of 2 locations. I've been the top 1% in sales for that brand every year, including the first year I started. But I would prefer to be able to sell ANY brand to my customers, as to not lose them when they switch from my brand to another, or when they buy their children cars. Being an 'Auto Broker' gets my attention, but with ALL the information available online about buying cars, does anyone actually think they need an autobroker? I could argue the case that yes, for most people, a broker gets them a better deal, and has higher odds of getting them the car they want (color and options) instead of being forced into buying. But most people wouldn't realize that, and thats a weird position to convince people to work with you from. Everyone thinks its just the time savings, which sure it could be.

If you were introduced to the idea of a car broker, either in person, or in advertising, would you be inclined to work with them? What are your overlall thoughts on working withone someone else other than the car dealer to buy your car? You'd probably want to test drive the car at your local dealer anyway. Would you as a customer feel OK working with a broker even though you used the dealers time to research?

Thanks in advance, Rick

rickr84 wrote: If you were introduced to the idea of a car broker, either in person, or in advertising, would you be inclined to work with them?

No.

In reply to Woody:

Could you expand on why not so I might now what Id be up against?

Not unless I was in the market for a very high end exotic and didn't want to go on a waiting list. I am not in that market.
As far as salesmen go, I'd rather not deal with them either. Ever. For any reason.
Edited to add: The reason I don't want to deal with salesmen in the first place is that they don't add any value to the transaction for me. I've never had one that knew more about any car I was looking at. Then when we're haggling over price they can't give me an answer until they get it approved by their sales manager. Why the hell is part of my money going to that guy? Why don't I just ask the sales manager what the price is for this down payment and that financing? Salesmen make it harder for me to purchase a car, not easier, and I can't really see how a broker would be any different unless the car I was looking for was exceptionally difficult to source and he had connections that were unavailable to the general public. I wish you the best of luck though.

I do my own research, take my test drives and negotiate my own deals. The last thing that I want to do is add another party into the mix.

I'm not everybody, but I don't think there's a huge market for this kind of thing.

I actually know someone that is a car broker and am kinda impressed with his operation. He markets towards luxury, sportscars, and race cars but will find anything. He has a fixed fee on purchases. I don't know how he does it, but it works.

Edit: His average purchases are dealer auctions of lease turn-ins of BMWs & MBs.

In reply to mazdeuce:

If you'd really like to avoid a salesman, I can't think of a way to do that other than a broker if you plan to buy a new car. A used car you can always go private party of course, which I have done all my life.

Ps salesman arent that bad. It's only peoples fear of paying more than 'the best price ever seen' that gets them to worry if the salesman is lying to them about 'this being the best price Ive ever seen'. Pay MSRP (a fair price decided by the manufacturer that you've put enough faith into to own their car for several years), or pay the price you found online from a reputable site such as edmunds or cars.com or truecar or whatever you like. Oh ya, make sure you know what the best interest rates are around. Ive seen more people screwed on interest rates than sale prices by far.

Anti-stance wrote: Edit: His average purchases are dealer auctions of lease turn-ins of BMWs & MBs.

Thats actually someone running a smaller used car dealership and using the term 'broker' to explain why he doesnt have as much inventory as the automall. It's a good gig too, but most auto brokers deal with finding only new cars since most dealerships will not 'broker' a used car. A new car auto broker could also do a few used car sales to keep one extra employee busy with auction cars and tradeins.

I've edited my comment above to add more information about my salesman hate. The reason I always end up talking to the sales manager anyway is because I can do interest rates in my head faster than the sales guy can do them on a computer and it confuses the hell out of them. I'm sure there are good salesmen, I've actually met a few nice ones, but still not one that adds anything but pain and cost to a sale. I really can't see a broker being much different for anything but very very odd/rare cars.

rickr84 wrote:

Anti-stance wrote: Edit: His average purchases are dealer auctions of lease turn-ins of BMWs & MBs.

Thats actually someone running a smaller used car dealership and using the term 'broker' to explain why he doesnt have as much inventory as the automall. It's a good gig too, but most auto brokers deal with finding only new cars since most dealerships will not 'broker' a used car. A new car auto broker could also do a few used car sales to keep one extra employee busy with auction cars and tradeins.

This guy has zero inventory.

Woody wrote: I do my own research, take my test drives and negotiate my own deals. The last thing that I want to do is add another party into the mix. I'm not everybody, but I don't think there's a huge market for this kind of thing.

Not to discredit anything, but being in the industry right now I can tell you this is the reality.

Option 1: Mr. Woody walks in to me the salesman at Ford about a new GT mustang. He negotiates right down to the best deal I have done all quarter on a GT mustang by showing me website quotes, other dealer quotes, twisting my arm a bit, and telling me hed take it right now. OK fine he gets a great deal.

Option 2: OR, Woody test drives, walks out, calls a broker (they obviously exist already), and that broker calls me and gets our best deal of the quarter INCLUDING already paying him. Yes, in the end, gross wise, we did better for the broker than a customer (industry insider deal is an industry insider deal, live with it). Mr. Woody gets that deal without the time he would have spent.

Option 3: Mr woody does the process JUST like Option1, but he was misinformed, or missed a new rebate, or didnt know about an increase in production coming this month allowing us to sell at a bigger discount, and agreed to a price $1000 higher than if he just went an called Option 2. Happens ALL THE TIME.Not everyone gets bottom dollar, but then again not everyone cares to.

And then, lets just add one more variable to Option1, where woody got a great deal.

Woody was so into getting a good price, he missed the part where the rate was 1.9% for 60 months, and he aggreed to 2.9% (still a good rate). That only cost him $1000 over the 5 years. No big deal, he doesnt care, hes not the guy that would ever ask for help to save money.

Dealers on average make $650 in just interest rate profit. Take out the CASH deals that have no potential, take out credit unions, take out the few people that really DID know the best rate, that means the average person that DOESNT know the best rate gets taken by about $1,200 Id say. A broker solves all that 100%, in minutes.

Just my 2 cents.

rickr84 wrote: or missed a new rebate,

Say what?!!

I sold cars, in a Ford dealership no less, and we NEVER hid rebates from someone. If it was available, we showed it to them. Wow, that is all kinds of E36 M3ty right there.

mazdeuce wrote: Then when we're haggling over price they can't give me an answer until they get it approved by their sales manager. Why the hell is part of my money going to that guy? Why don't I just ask the sales manager what the price is for this down payment and that financing?

Most of the 'ask the manager' thing is just a game or show, because the manager said to do it just like that. Also, here is my favorite part:

The sales manager in a dealership is often the BEST salesman, negotiator, closer, profit maker, in the entire dealership. Some good salespeople turn down offers to salesmanagers, but eventually owners find a great closer to control all the weak salespeople and that guy is made the manager.

A managers job is to HELP salespeople get you to pay as much as possible. By asking to see this guy, you are asking to go direct to the guy which was chosen for his role because he is best at not giving away cars, and getting customers to pay the most.

A great salesperson is great when he listens, calls people back, asks for referrals, and is a nice person overall.

A great salesmanager is great when his gross profit is higher month over month. Thats the guy you want to see?

Your odds are better getting a great deal by just being nice and asking the salesman to do it for you, and then he can go and convince the salesmanager to do that deal. If they like you, thats how it often goes. If they dislike you, or are neutral, they work together on how to get you to pay more than your offer.

Datsun1500 wrote: A broker is not legal in 17 States. You might want to check that. I think most people would have the opinion that since you are making money on the deal that they could have done better by not having your markup in the way as well. With online shopping, its easy to just get a price from a few stores and go to the closest one and have them match it.

It's legal in California which is where Im at, so thats fine.

Also, it seems like thats the biggest challenge then, showing people that they CAN get a better deal, or atleast equal to the VERY best possible deal, by using a broker and the dealer pays the fees on top.

It boils down to, if your broker is half decent, youll probably not find a way to pay less than buy using him. But you run the chance of not arriving at that same deal, and paying more. (theres no way every decent shopper managers to get to bottom dollar.. I can attest that less than 5 a month do out of the 30 cars a month I sell..)

In reply to Anti-stance:

Unfortunately, that is the sort of behavior that gives certain dealers a bad name. I'm not saying that there aren't good dealers out there, but there is a certain percentage out there that can make the purchase process rather unpleasant.

I've been flat out lied to by a saleslady when I was about to plonk down $27k on a car. Oddly enough, I didn't buy the car. Note to saleslady - don't try to BS someone who works in the financial industry (albeit on the fringes of it) and has done his research.

To the OP, I probably wouldn't buy through a broker unless I was looking for more car than I can realistically buy. That said, I can see something like it make sense if you as the customer is set on a specific model and is short of time.

Anti-stance wrote:

rickr84 wrote: or missed a new rebate,

Say what?!! I sold cars, in a Ford dealership no less, and we NEVER hid rebates from someone. If it was available, we showed it to them. Wow, that is all kinds of E36 M3ty right there.

Not every dealer is totally honest. Many dealers will give that rebate to the finance guy and say "he doesnt know about this yet, use it to sell a product!". Or theyd back it out into the sale price and say "of course, we arrived at that sale price by using this rebate, just like the quote in your emails did". Happens often, sorry to say.

And what you describe is the horse and pony show that we all hate. I find it very hard to believe that introducing another person into the chain that wants to take another piece of the pie is a good idea. The next thing you know some guy will be here telling us that for some small fee he can sort through the brokers for us and find us an honest one.

rickr84 wrote:

mazdeuce wrote: Then when we're haggling over price they can't give me an answer until they get it approved by their sales manager. Why the hell is part of my money going to that guy? Why don't I just ask the sales manager what the price is for this down payment and that financing?

Most of the 'ask the manager' thing is just a game or show, because the manager said to do it just like that. Also, here is my favorite part: The sales manager in a dealership is often the BEST salesman, negotiator, closer, profit maker, in the entire dealership. Some good salespeople turn down offers to salesmanagers, but eventually owners find a great closer to control all the weak salespeople and that guy is made the manager. A managers job is to HELP salespeople get you to pay as much as possible. By asking to see this guy, you are asking to go direct to the guy which was chosen for his role because he is best at not giving away cars, and getting customers to pay the most. A great salesperson is great when he listens, calls people back, asks for referrals, and is a nice person overall. A great salesmanager is great when his gross profit is higher month over month. Thats the guy you want to see? Your odds are better getting a great deal by just being nice and asking the salesman to do it for you, and then he can go and convince the salesmanager to do that deal. If they like you, thats how it often goes. If they dislike you, or are neutral, they work together on how to get you to pay more than your offer.

Everything you said right here is so spot on I think I just had flashbacks.

mazdeuce wrote: And what you describe is the horse and pony show that we all hate. I find it very hard to believe that introducing another person into the chain that wants to take another piece of the pie is a good idea. The next thing you know some guy will be here telling us that for some small fee he can sort through the brokers for us and find us an honest one.

Obviously Im not asking for any business here, and Ive been pretty straight forward.

Thus, if you read my posts, do you simply think Im LYING when I say using a broker will get you the VERY best deal possible?

Its clear that misconception is the biggest hurdle to this thing, but the fact that someone still doesnt see the benefit of using a process to get the BEST price, without accidentally paying more since they arent in the business years like the rest of us, when there isnt anything to risk, shows how tough this could be ;)

rickr84 wrote:

Woody wrote: I do my own research, take my test drives and negotiate my own deals. The last thing that I want to do is add another party into the mix. I'm not everybody, but I don't think there's a huge market for this kind of thing.

Not to discredit anything, but being in the industry right now I can tell you this is the reality. Option 1: Mr. Woody walks in to me the salesman at Ford about a new GT mustang. He negotiates right down to the best deal I have done all quarter on a GT mustang by showing me website quotes, other dealer quotes, twisting my arm a bit, and telling me hed take it right now. OK fine he gets a great deal. Option 2: OR, Woody test drives, walks out, calls a broker (they obviously exist already), and that broker calls me and gets our best deal of the quarter INCLUDING already paying him. Yes, in the end, gross wise, we did better for the broker than a customer (industry insider deal is an industry insider deal, live with it). Mr. Woody gets that deal without the time he would have spent. Option 3: Mr woody does the process JUST like Option1, but he was misinformed, or missed a new rebate, or didnt know about an increase in production coming this month allowing us to sell at a bigger discount, and agreed to a price $1000 higher than if he just went an called Option 2. Happens ALL THE TIME.Not everyone gets bottom dollar, but then again not everyone cares to. And then, lets just add one more variable to Option1, where woody got a great deal. Woody was so into getting a good price, he missed the part where the rate was 1.9% for 60 months, and he aggreed to 2.9% (still a good rate). That only cost him $1000 over the 5 years. No big deal, he doesnt care, hes not the guy that would ever ask for help to save money. Dealers on average make $650 in just interest rate profit. Take out the CASH deals that have no potential, take out credit unions, take out the few people that really DID know the best rate, that means the average person that DOESNT know the best rate gets taken by about $1,200 Id say. A broker solves all that 100%, in minutes. Just my 2 cents.

Mr. Woody used to be in the car business. He'll take his chances...

Datsun1500 wrote: I can get the best price with a few emails and clicks. A broker needs to get paid somehow. That money comes from the deal somewhere. I think most people will not understand the value a broker "might" bring, and that's a tough hurdle to get over. That being said, you being a car salesman for a few years does not make you an expert on the business either. You asked for opinions, then disagreed with all of them, so I say go for it. Get a license, insurance, etc. and get the word out. You are obviously an expert and will make a lot of money. We need you, we just don't know it yet

Ok maybe I did come on a bit strong, but mostly because it was a bit shocking to see "no Ill end up paying more" as a reason, and some hostility, when I expected "Oh no Id feel to guilty to back out on my salesman after test driving with him" OR "Id feel guilty walking back into the same dealership but using a broker"... which are the two things I see when I DO work with customers that go with brokers today.

And true I dont know everything, but in a few years I outsold just about everyone in the country, from a small dealership. If I was in a larger metro dealership with a bit more inventory anda bit more customers, I'd probably be Top 3 in the country for a brand that has 2200 salespeople.. so Im not bad.

Thanks for the input, and if anyone has any more, please feel free to post.

Woody wrote:

rickr84 wrote:

Woody wrote: I do my own research, take my test drives and negotiate my own deals. The last thing that I want to do is add another party into the mix. I'm not everybody, but I don't think there's a huge market for this kind of thing.

Not to discredit anything, but being in the industry right now I can tell you this is the reality. Option 1: Mr. Woody walks in to me the salesman at Ford about a new GT mustang. He negotiates right down to the best deal I have done all quarter on a GT mustang by showing me website quotes, other dealer quotes, twisting my arm a bit, and telling me hed take it right now. OK fine he gets a great deal. Option 2: OR, Woody test drives, walks out, calls a broker (they obviously exist already), and that broker calls me and gets our best deal of the quarter INCLUDING already paying him. Yes, in the end, gross wise, we did better for the broker than a customer (industry insider deal is an industry insider deal, live with it). Mr. Woody gets that deal without the time he would have spent. Option 3: Mr woody does the process JUST like Option1, but he was misinformed, or missed a new rebate, or didnt know about an increase in production coming this month allowing us to sell at a bigger discount, and agreed to a price $1000 higher than if he just went an called Option 2. Happens ALL THE TIME.Not everyone gets bottom dollar, but then again not everyone cares to. And then, lets just add one more variable to Option1, where woody got a great deal. Woody was so into getting a good price, he missed the part where the rate was 1.9% for 60 months, and he aggreed to 2.9% (still a good rate). That only cost him $1000 over the 5 years. No big deal, he doesnt care, hes not the guy that would ever ask for help to save money. Dealers on average make $650 in just interest rate profit. Take out the CASH deals that have no potential, take out credit unions, take out the few people that really DID know the best rate, that means the average person that DOESNT know the best rate gets taken by about $1,200 Id say. A broker solves all that 100%, in minutes. Just my 2 cents.

Mr. Woody used to be in the car business. He'll take his chances...

Random example.. not everyone can be in the business. Also, the customers that say "Oh man I used to sell cars back in the day.." are the best customers, not the grinders, so Im all for the people that used to sell cars. They pay a fair price and dont waste your time. But Ive yet to see a previous car salesman get the same price he would of if he just called one of the brokers our dealership uses. We sell about 150 cars a month, with about 10-15 coming through brokers. Always our biggest losers, and we always ask ourselves why we keep doing it.

If anyone cares, this was me last year on this forum, and yes I did go back to another dealership and make it back to the top 20 in the country, even taking 2 months for 2012.

http://grassrootsmotorsports.com/forum/off-topic-discussion/life-advice-from-racers/49217/page1/

After

In reply to rickr84:

Sorry wish I could edit that. I just realized there's about 100,000 new cars sold in California every month.

I currently make a good living selling 30 cars a month. Id need broker 40 a month to equal my income since they make less. If I could broker 50 a month I'd be happy.

So maybe a DIY auto forum isn't the exact 0.05% of the market I'd be targeting.