Tips on Using a Car Broker for New Car Buying

If you don't have the time or desire to deal with the hassle often associated with new car shopping, an alternative is to use the services of a car broker. A car broker is often a former car dealer who will do all the shopping, negotiating and administrative work for you for a fee, usually ranging from $200 to $1,000. Before choosing a car broker, some tips on using one may prove helpful.

Broaden Your Search

Don't just limit your search for a car broker to the local phone book. An online service such as CarsDirect.com provides access to more than a million cars and charges a relatively low fee for its services. Wholesale membership clubs such as Sam's Club and Costco also provide car broker services to their members.

Check Credentials

If you decide to use a private or local car broker, be sure to check out her credentials and experience. Car brokers are required to be licensed to sell cars in every state they do business. According to Edmunds.com, the most reputable car brokers are often former car dealers who know the ins and outs of the car business and dealership tactics. You can also contact local dealers to see if they've heard of the broker.

Be Clear About the Fee

Most reputable car brokers will charge an up-front fee for their services, so you won't have to worry about any surprises after the transaction is completed. If your broker uses another method, such as charging a commission based on a percentage of the sale price, be sure that you understand exactly how the process will work.

Watch for Dealer Affilations

Some brokers may actually be affiliated with certain car dealers or in some cases, be employees of the dealership. While this type of arrangement is not illegal, it could mean that the broker will be more concerned about the dealer's interests than your own. Before signing on the dotted line with a local broker, anonymously call dealers near him to see what they have to say about the broker.

Do Your Own Shopping First

Before hiring a car broker, do some preliminary negotiating online by using car dealers that offer Internet sales. This will save you the time and hassle of having to go to the dealerships in person, and you'll be able to get some initial prices. You can then compare what you can save by shopping on your own against the fee charged by the broker to see if hiring a broker is really worth your while.