Auto brokers can help take the hassle out of car-buying

When Indianapolis resident Matt Maddox was in the market for a new car, he found the process of juggling a vacation, moving, and making several trips to dealerships too much. To lessen the burden, Maddox hired an auto broker to find him the vehicle he was looking for at the right price without ever having to leave his home.

"I felt like I was getting a very competitive price, and it just took hours of complexity out of it," Maddox said. "And to me, that was worth the little money I maybe would have saved."

While auto brokers may provide relief to someone's hectic schedule, some dealers say they're needed less today because of all the online car-shopping options and price-comparing websites.

An auto broker essentially does all the car-buying work for the customer.

The broker first meets with the buyers to find out what type of vehicle they're looking for and their price range. Judy Kilburn, owner of American Chariots Auto Brokers in Miami, prefers to set up a meeting in person, if possible, to better connect with the buyer.

"I try and get their choice of vehicle and see how close they are to making a decision on the car and cost," she said. "Some might give you seven or eight choices."

Once the brokers have this information, they work with the dealerships directly and attempt to negotiate the best possible deal for their clients. That can even include negotiating the trade. When a deal is reached, the broker delivers the vehicle directly to the customer's door, along with the car's paperwork and keys. The customer will then complete any paperwork needed to complete the deal.

Kilburn said one of the biggest advantages of hiring auto brokers is they can work to eliminate any unnecessary dealership fees.

Allen Lee, general manager of Shack Findlay Honda in Henderson, Nev., said the rise of Internet shopping and various price-comparing tools had made auto brokers less necessary in recent years.

"Everything is so readily available to the consumer," Lee said. "If a consumer is knowledgeable and works with a reputable dealer, I don't think they're going to get a better price."

Lee adds that a dealership can offer hundreds of different options of cars and can offer services and bodywork.

A customer "can develop a relationship with a dealership," Lee said.

Kilburn doesn't charge the customer directly but works with dealerships to eliminate certain fees in exchange for a broker fee. However, she adds: "Some brokers may charge the fee up front."

Kilburn said the broker charge typically costs between $300 and $500.

Dean McBride, a representative with Members Auto Source in Indianapolis, said the average price for his services was about $350, which goes toward the total price of the car that the buyer pays.

"You're not going to negotiate a whole lot better pricing," McBride said. "If a dealer beats me, they beat me by 50 bucks or whatever it is. It's not like they're going to crush my pricing."

Because auto brokers are defined as auto dealers, they must be licensed by their respective state's bureau of motor vehicles in order to operate.

Kilburn says people should check that the company has a license before hiring a broker.

"I would ask a lot of questions," she says. "Ask how long they've been doing this. See if they have a legitimate website."