9/5/01--Featured in the Los Altos Town Crier

An auto broker is more than a middleman
By Robert Hammer and Stefanie Kelly

Your neighbor just purchased a new Mercedes-Benz CLK430 cabriolet, and as the car sits gleaming in his driveway you notice the license plate inserts: they're not from a dealer, but an auto broker. In fact, you've seen this broker's license plates before... in the grocery store parking lot, in your office garage, on the freeway, and in front of your child's school.

Eventually you begin mentioning to friends that you're preparing to buy a new car. Several people, including your neighbor, refer you to the same auto broker. The referrals are uniformly enthusiastic: many people you know have saved time and money buying or leasing new vehicles through this broker, who conveniently is located right around the corner.

It doesn't get much easier than this - nor the signs much clearer. But there are skeptics among us. Most people who have not already worked with an auto broker are wary of doing so because they don't have a clear understanding of the role a broker plays.

Contrary to one popular misperception, an auto broker is not merely a used car dealer - although many used car dealers call themselves auto brokers. Unfortunately, more often than not, these enterprises are of dubious repute, and they have a negative impact on the mystique already surrounding the auto brokerage business.

Another misperception, typically perpetuated by new car dealers, is that a broker is merely a middle man who costs the consumer extra money by charging a fee on top of the purchase or lease price of the vehicle. Given the role a reputable new car broker actually plays, it isn't surprising that dealers work hard to discourage consumers from going through a broker.

A new car broker works for the consumer, as the consumer's agent, in the consumer's best interest, to find the exact vehicle the consumer is seeking at the very best possible price. This means, among other things, that the broker does not allow dealers to take advantage of the consumer. The broker protects the consumer throughout the car-buying process.

The question is, how can a broker save you money? A good broker does enough volume to have access to wholesale prices - through high-level executives at conglomerates like Auto Nation and Penske, to name just two - that you as a consumer cannot obtain on your own.

So how does this process work? Before engaging the services of a broker, you should know exactly what vehicle you want. You also should have done some preliminary investigating so you have an idea of what the market is like.

Once the broker takes your order, as it were, your work is done; the broker then does all of the legwork by locating your vehicle, negotiating the best possible price - which includes passing on to you all applicable rebates and warranties - and, once you have confirmed that the specifications are correct and the price is right, acquiring the vehicle on your behalf.

A few tips: (1) Be sure to check references before hiring a broker. (2) When working with a broker, you should have the details (or specs) on the car and the exact purchase or lease price in writing prior to consummating a deal for your new vehicle. (3) You should not have to pay anything for the vehicle or the broker's fee - which is a flat fee, not a percentage or commission - until you pick up your new car. (4) The sale contract or lease agreement you sign for your brokered vehicle is strictly between you and the dealer - the broker's name does not appear anywhere on the paperwork, nor are you buying the vehicle from the broker.

By hiring a broker you guarantee yourself the best price, and ensure that you don't leave any money "on the table" - meaning that you don't put one extra penny in the dealer's pocket. A good broker can assist you in locating any make and model vehicle that is available in the United States - be it hard-to-find or garden variety. So... any further questions?!