Have you ever heard of a mortgage broker? Well there is a similar service in the car market that is becoming more and more popular in recent times.
A broker is possibly the worst nightmare for a car dealer but potentially a great thing for you the customer. Now, similar to the brokers in the housing market, they do not align themselves with one particular brand. Instead, they are usually able to provide you with any make and model of car in the market. This is because good brokers will have contacts in garages for all the major brands in the U.K and have a reputation of being able to deliver sales for the garage that they may not have discovered without the broker's involvement.
How does it work?
It's pretty simple to be honest. The dealerships have a special rate that they offer the cars to brokers on finance packages that they would never offer directly to the customer. Why do they do this? Because it allows them to access the client base that the broker contains and would otherwise never see. For example, a dealer that is based in Liverpool talking to broker that has a client based in Portsmouth would probably never hear from that customer if it wasn't for the relationship they had with the broker. So it is beneficial when the dealer is looking to expand its market and offering a special rate via the broker also helps to make sure that the business is won by the dealership in question. The brokers are also in many cases paid by the deal which the dealership puts together so there is no direct fee charged to the customer other than a small admin fee in some cases.
So let's imagine you are after a new Audi A3 Sedan and you are looking at personal lease as an option. You could look at all the comparison websites and visit your local Audi dealer, test drive the car and maybe even negotiate a deal with the dealer. If a broker was to call that same dealership on your behalf trying to buy the same car it is more than likely that they would be able to offer you a better deal because of broker agreements that are in place. Crazy I know but that is how the market works these days.
Can brokers be trusted?
Like almost every industry there will be rogues that will do things that they are not meant to, to make extra money but if you do your due diligence you will be able to find yourself a good broker. They should be regulated by the Financial Conduct Authority, (FCA) and it never hurts to compare quotes but again, even the lowest monthly payments do not always mean a good deal. So make sure that all quotes are in email for your records to avoid confusion and disappointment when your car is delivered.
Please contact us if you would like some information on the brokerage service that we provide here at Car Buying Guru.