Auto Broker: Should I Use One?

are car brokers worth it decision map

This question, are car brokers worth it gets asked often.  Should I use an Auto broker (otherwise known as a Car Broker)? 

Consumers also want to know if an auto broker will save them money, find them the vehicle they want, if they’ll do it without the typical stress and if there’s another solution or alternative to a car broker out there. 

To help you determine are car brokers worth it to hire, we’ll examine these questions:

Should I use a car broker to save me money?

Will an auto broker find exactly what I cannot find?

Will they rid me of the stress of dealing with the typical dealership experience?

And finally, is there an alternative to using an auto broker?

So let’s start with defining Auto Broker.

What is a car broker or auto broker?

Traditionally, you would call an auto broker because they could find you a vehicle either from a dealer, saving you the hassle of doing it yourself, or they could go to an auction and buy a used vehicle there for you. They would then negotiate and purchase the vehicle from the dealer or auction and sell it to you. 

In most states, auto brokers are required to have a dealer’s license and have a physical location (to display their cars). This allows them to purchase and sell vehicles regularly. An actual auto broker in today’s market is really just a car dealer.

Your Car Buying Advocate is commonly (and mistakenly) referred to as a car broker, but we are not. We will explain later what those differences are and why it’s important to know.

Will a car broker save me money?

When someone asks “are car brokers worth it,” often they really want to know, “Will a car broker save me money?” 

Here’s the truth. I don’t care what any car broker tells you.

There is no actual way to quantify what a car broker can save you; UNLESS, you go out and get a deal on a vehicle and then hire a broker to do the same and then compare deals. And this approach defeats the entire purpose, doesn’t it?

Any car broker or website claiming to save their clients on average X amount of dollars might as well be pulling that number out of their you-know-what.

The truth is, no-one can get any better of a deal than you can get yourself if you know what they know and do what they do.

To find out if a car broker is worth it or not you should ask yourself:

1. Do I have the time? 

Finding, negotiating and finally taking delivery of a vehicle is a time-consuming process. If you are strapped for time, then a car broker may be worth it.

2. Do I fully understand how a car purchase is structured and how to know whether a deal is a rip-off or a great deal?

If the answer is no, then enlisting the help of a car broker may be worth it!

3. Do I even want to negotiate a deal on my own? 

It’s a common occurrence that my clients say they hate the back and forth at the dealer. It is worth it for them to hire a car broker just so they don’t have to go through that.

Don’t misunderstand what I am saying. 

Can an auto broker save you money? Can our car concierge service save you money?

Of course, and we believe we save a majority of our clients’ money. Our clients believe we save them money; just read our reviews. But there is just no way to quantify it because in the end you could get the same deal we can get. So if you have the time, knowledge and you want to do it on your own, then a car broker might not be worth it to you.

Will an auto broker find exactly what I cannot find myself?

You might call an auto broker if you want to find a vehicle at an auction. Here, an auto broker can go to the auction and purchase the vehicle for you. They will then mark it up and sell it to you. That service can be valuable if they can find you a vehicle you would otherwise have no other access to or find a used car you want.

Will a car broker rid me of the stress of typical car buying?

They certainly can save you stress if the stress involved is related to negotiating with the dealership. It might also relieve you of the stress caused because of the time it would take if you had to do it on your own. However, if your broker is collecting compensation on both ends of the deal, you may not feel settled about the deal you get and whether it was “good”. This uncertainty causes most people stress to begin with, not knowing whether they made a good deal at the dealership. This is also one of the main reasons people are looking for help with a car purchase.

today's market

If you are in the market for a new car, a broker will negotiate a price with a dealership and earn a commission from the sale. Most auto brokers have a relationship with certain dealerships where they take all of their customers. They charge the dealership for bringing (you) the customer to them and then they charge (you) the consumer a fee for brokering the deal. 

Think about it if you were a broker. Wouldn’t you try to make as much money as you could for each customer you gain? When you hire a car broker, you have no idea how much the dealership is compensating the broker for bringing you to them. So they make money on both sides of the deal, from you AND the dealership.

The issue we see here is that the auto broker cannot have your full interest in mind since they are being compensated on both ends of the deal. They have two customers, the dealership and you. Additionally, if the service provided is “free” to you, you can be sure the real customer is not you because the broker is being compensated by the dealership.

With that being said, it may be more important for you to have a car buying experience where you just don’t have to deal with all the traditional car buying BS. You may find it worth it to pay a broker so that you don’t have to deal with the anxiety and uncertainty it brings.

If that’s the case, it’s totally understandable to want to enlist the help of an auto broker. We just think that there are better options. Let’s talk about the alternatives to an auto broker.

Is there an alternative to a car broker ?

Yes, there is an alternative to a car broker. And there’s also an alternative to having to pay a broker who you’re still unsure has your best interest in mind.

This is where a car buying service, car buying concierge, car buying advocate or car buying agent comes into the scene. We can use interchangeably these words to describe individuals who provide a service to the consumer only and work in a fiduciary capacity to help a car buyer find, locate, and negotiate a car deal.

We’re NOT talking about car buying services offered by memberships from Costco or other companies affiliated with car sites like Truecar. These services offer car deals they say are pre negotiated sale prices. That sounds nice but what they don’t explain is that you still need to negotiate financing, warranties and add ons, etc. Those items alone could add thousands of dollars onto the total cost of the vehicle, if you don’t understand them. And chances are, if you’re using a Costco buying service or similar, you don’t have the knowledge to negotiate those items effectively. Dealerships pay Truecar to be in their network. The service is “free” to the consumer, so we can know that the actual customer served is the dealership, and not the consumer.

Are car brokers worth it? 

We believe the better alternative to using an auto broker, when you want to save time, reduce stress and know that you’ve gotten a good deal, is to Hire an Expert with Your Car Buying Advocate. If you want to know whether we’re a good fit, we ask that you simply schedule a free strategy call to discuss your car buying goals. 

We’ll decide if you’re a good fit for our paid service where we handle the entire process of finding, locating and negotiating the purchase of a vehicle as well as helping you get the best deal for your trade-in. If we decide to work together, we’ll ensure that by the end of the transaction you’ve purchased the vehicle you want at a good price because we’ve stepped you through every part of the deal and presented you with multiple offers allowing you to make the best financial decision for your lifestyle and situation.

Why Trust Your Car Buying Advocate?

Watch this short video to find out why working with Your Car Buying Advocate makes all the sense in the world.

Frequently Asked Questions

What exactly does an auto broker do?

Car brokers are typically hired to purchase a vehicle and sell it to a buyer. They work with dealerships to source a vehicle for their clients. They are the middleman between the buyer and the dealership and are compensated by both dealers and their customers. This can often lead to a conflict of interest. Car brokers can also be hired to purchase vehicles from auctions because they hold dealer licenses.

How does an auto broker get paid - by me or the dealer?

Car brokers are typically paid by both dealers and their customers.

Will a broker really save me money on buying a car?

The only way to know if a broker saves you any money when buying a car is if you were to negotiate a deal on a similar vehicle and compare deals with the one they get you. That defeats the purpose of hiring a broker.

Can a broker help me find a specific car I'm looking for?

Yes, some brokers may help you source a specific vehicle at auction since they hold a dealers license. They can also do a search on your behalf to find a vehicle you want.

What fees or charges will I pay when using an automotive broker?

Some car brokers charge a percentage of the purchase price of the vehicle as their fee. This percentage can vary but is often in the range of 2% to 5% of the car’s price. Others may structure their payment with a flat fee ranging from $600-$2000 and most times dependent upon the vehicle’s purchase price range. 

Is negotiating with a car broker easier than at a dealership?

If you don’t like negotiating, then working with a broker will allow you to bypass negotiating with a dealership all together. A broker is not going to typically negotiate with a customer. They will source a vehicle, purchase the vehicle and agree to sell it to you for a price.

Do car brokers have access to better pricing than I can get?

The advantage a car broker has over the typical consumer is general negotiation skill, industry knowledge and purchasing power because of a significant volume of transactions they may do with a particular dealership. This could incentivize a dealer to give better pricing to a broker. However, if you have similar car buying knowledge and know how to negotiate a car deal the proper way, anyone can get the same deal.

How does a broker's experience help in the buying process?

If you care most about your time, a broker can make it a swift process.

What are the main benefits of using a car broker?

If you are looking for a particular car or a vehicle at an auction, a car broker can help you source the vehicle because they hold a dealer’s license.

Are there drawbacks or risks to using a broker?

The main drawbacks are that an auto broker does not work solely on the consumer’s behalf. They are paid by dealerships and consumers. This creates a huge conflict of interest. They are making money on both sides of the deal and are unable to advocate for the consumer.

How do I choose a reputable and trustworthy car broker?

The best way to choose a car broker, like any business, is to read real reviews and talk to previous customers. Find out how they are paid and ask them how they will advocate for you. If they can’t answer that question truthfully, you have your answer.

Should I use a car broker? Or Are there alternatives to using a traditional car broker?

The traditional car broker is simply a person who holds a dealers license. They buy and sell vehicles. If you want someone who can help you navigate the car buying process and advocate for you alone, car buying advocates are the only alternative.

How do car buying services or advocates differ from brokers?

Car buying advocates are only compensated by their customers, the consumer. This allows car buying advocates to advocate for their customer alone. They work in a fiduciary capacity and care about providing the consumer with a stress-free, transparent car buying experience allowing the consumer to make the best financial decision with regard to buying a new car. They never accept compensation from dealerships and work FOR the consumer.

Under what circumstances is a car broker worth the cost?

A car broker might be worth the cost if they can source a particular vehicle at auction you cannot have access to otherwise because they hold a dealer’s license.

Read Next: Should I Use an Auto Broker or Car Buying Concierge?

Mike Rumple

There is big difference between a traditional auto broker and independent car buying agent, like YCBA, for example.

Mike Rumple

Mike Rumple

Mike is founder of Your Car Buying Advocate and spends his time breaking the rules the auto industry has set for the car buying consumer. He loves to teach consumers the ins and outs of making great car deals.

This Post Has 3 Comments

  1. Linda and Chuck

    Mike, Can you provide us with an rate we could expect to be charged by the car advocate? Is it based on a % of the total cost of the car, or how is it determined?

    1. Mike Rumple

      YCBA advocates charge a flat fee. $799. We keep it simple.
      You can find brokers out there who will charge a percentage of the vehicle or sliding scales depending upon the type of vehicle.

  2. Carole Lombard

    I am looking for a used car in the Bay area of San Francisco. I want a 2020-2022 hybrid vehicle, light in color, leather interior with great safety features.
    I am frustrated by the process of looking for my self. I get inundated with texts and phone calls as soon as I show any interest in a car. I want to pay cash, not frinance the vehicle. I need to arrange this pretty quickly as my older vehicle is failing.
    Can your services help me?

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