You’ve heard of insurance brokers and mortgage brokers — but how about car brokers?
Well, they’re out there, and the right one could save you thousands on your next car.
If you’ve ever felt intimidated by a fast-talking car salesman, or bewildered by all the financing options, you may want to hire a pro to do your car buying for you. Jim Davidson says his Toronto company, Car Smart Inc., can even your odds against a professional salesperson by sending in an experienced negotiator to do battle for you.
“When I founded this business in 1992 it was all about the savings, but as I’ve gone along it been become more about avoiding the hassle of negotiating your own price,” says Davidson, 43.
As a former car salesman himself, Davidson says he knows all the tricks of the trade. On the sale of a typical $30,000 vehicle, he says he can save between $2,000 and $3,000 by applying all possible dealer incentives and dealing directly with managers instead of commissioned salespeople. (The fee for his service is a flat $500.)
With savings like that, you’d think everyone would be using car brokers, but there are caveats. “Not all brokers are created equal,” says Mohamed Bouchama, director of the non-profit group Car Help Canada. “A good broker will put a lot of hard work into the deal, but some will just tell you where to go and excessive fees can eat into your promised savings.”
To make sure your broker stays honest, Brenda McIntyre of the Ontario Motor Vehicle Industry Council says you must have a written contract. It should include an itemized list of the broker’s fees, as well the details on how the broker gets paid. Some, like Davidson, charge a flat fee, while others take a commission from the selling dealer. Some brokers even take both, but new rules in Ontario forbid that kind of double dipping.
If you’re trading in a vehicle when you buy, that should also be detailed in your broker’s contract, along with the minimum value of the trade that you are willing to accept.
Finally, if you’re having trouble finding a broker you trust, keep in mind that there are several non-profit consumer groups, like Car Help Canada and the Automobile Protection Association, which will also negotiate on your behalf. Your only cost for using their services is an annual membership fee of $60 to $65.