An Alternative Buying
Strategy

A broker may buy a car from a dealer at one price and then sell it to a buyer at another price and pocket the difference between what he paid and what he received. In some cases the broker also tacks on a fee for his services to the buyer. There are also cases in which brokers are acting as a front for certain dealers. They represent themselves as a car-buying service and charge a fee for that service, but in fact serve as a "funnel" into specific dealerships who pay them a fee for having sent them a customer.

Brokers are often shunned by manufacturers because they do not represent themselves for what they really are, i.e., a reseller of cars. Keep in mind that once a broker has purchased a car, he becomes the original owner, and when he resells it, the customer is, in fact, buying a second owner or used car.

This does not mean that there are not times when a broker can be of value to you. What it does mean is that you need to fully understand with whom you're dealing, who's paying the seller a fee, and for whom he's really working.

Car-Buying Services
Car-buying services, by definition, provide an advocate service in that they become the agents for the buyer. For an up-front, set fee, they will do some or all of the following depending on the extent of their service. They will help the buyer decide on a car, locate that car, make the deal and establish an all-in price with the dealer, check all the paperwork, and then arrange for the customer to take delivery at a nearby dealership or, in some cases, have the car delivered to the customer's home or office. While the custom.er pays the car-buying service a fee-usually a few hundred dollars-the actual payment for the car, in most cases, is paid by the consumer directly to the dealer.

Reputable car-buying services are paid only by their clients and receive no compensation or commission from the dealers. If you find that they are getting a fee from the dealer, look out!