How to use a car broker to save thousands on a new car

If you want to save thousands on a new car, here’s how to use a brokerage and avoid the stress of face-to-face negotiation with a car dealer

ESSENTIAL CAR BUYER RESOURCES

Video Transcript

This report is only about how my car-buying service and how that works. I can't comment on other brokerage operations. So, if you’re watching from anywhere that isn’t what Her Royal Highness Elizabeth Regina the Second would call ‘Australia’ (and which we would call ‘Straya) then it might not be that useful and/or interesting.

I’m John Cadogan, the cultural attache for car dealer relations at AutoExpert.com.au. They just love me. (I don’t know why.) Most media businesses involve the systematic delivery of advertising. But in my case I’ve developed a commercial model for saving people like you thousands on new cars. It’s what I do , exclusively. Here’s how that works, under the hood.

WHO NEGOTIATES?

I am in a commercial partnership with one of Australia’s largest fleet management operators. They’re publicly listed. It’s a serious business. What that means, they manage the procurement, the disposal and the finance for large corporate fleets.

They buy, they sell and they finance thousands of cars every year - for big companies, government agencies - like that. It gives them tremendous buying power. And if you get in touch with me at AutoExpert.com.au, we leverage that buying power for you, and you don’t have to go face-to-face with a car salesman. Because nobody enjoys that.

We don’t go face to face with car salesmen either. We deal with fleet buying departments in major dealerships - and they’ve each got hundreds of sales annually, to us, forming collectively a very powerful incentive not to pull the kinds of retail coal face rip-off tricks that are so common if you just walk in off the street and say: ‘How much for the red one?’

STEP ONE

In detail the process starts here: You fill in my contact form. All I need is I need your name, your mobile number, e-mail address and your postcode (and the postcode is just so we don’t ring you at the wrong time in the wrong time zone). You can also flick me any questions as well or details on the vehicle (or vehicles) you want to buy. No problem.

My advice is free, and I give it to you one-on-one by e-mail. You might ask: ‘Should I buy a Volkswagen?’ I might say: ‘It’s probably a better idea to stop smoking crack.’ Like that. Petrol versus diesel. Safe car for the grandkids. Whatever. CX-5 versus Tucson. Mazda3 versus i30. You will get an e-mail back, and I’ll also refer you to my procurement team:

THE TEAM

Six people who sit in an office and they buy cars all day long. Next to a dozen finance specialists who organise everything from basic car loans to chattel mortgages and novated leases - all day long. It’s what they do. That many cars and that much buying power gives us substantial leverage with all the major brands - from Kia and Hyundai all the way up to BMW and Mercedes-Benz.

And the finance - well, there’s also a lot of leverage with some of Australia’s largest finance institutions. So we tend to drive interest rates down quite effectively.

BUYING THE CAR

Let’s say you want a Hyundai Santa Fe Highlander, or a Mazda3 SP25 GT - whatever. We call you to get all the details right - because ordering a car is actually quite complex - the colour, the powertrain, the interior trim, the options, the packs, the body style, the spec level. It all makes a difference to the price. And that’s why we need your mobile number. Just to get the granular detail right, efficiently.

Then we put that order for that specific vehicle that you want out to tender across several dealers near you. We do this, routinely, Australia-wide. And over the next few days we nudge those dealers around a bit - especially if we’ve got a big corporate order going into them at around the same time, as there often is - and we get back to you with the best price. There’s no obligation to you at this point.

COMPARATIVE PRICING

If you’re half smart, when we get to this point you would have taken the car you want for a test drive and talked broadly with the sales guy at that time about the price. And if we can then deliver you a price that’s a considerable saving not just off the recommended drive-away price, but compared with the price the dealer has essentially given you, then you know that what’s on the table from us is unequivocally a good offer.

DEPOSIT

So at this point, if you decide to go ahead, we’ll just take a small deposit over the phone, by credit card, we’ll give you a receipt, and we’ll facilitate the purchase of that car for you, from that lowest-bidding dealer. And we often get it delivered to your door, with a full tank, without you having ever to darken their door.

WARRANTY & SERVICE

Ultimately you are the one buying the car from that dealer, at that price we’ve negotiated for you. The car comes with the full new car warranty, and you can get it serviced wherever you want - there’s no obligation whatsoever to get that car serviced at the selling dealer. In reality, all dealers want your servicing business. There’s nothing Dealer A likes more than poaching some of Dealer B’s servicing business. They’re funny like that.

Warranty is the same thing. All authorised dealers want your warranty work. Every warranty job means a nice little invoice they send to the parent carmaker for getting a defective car back on the road. They’re hardly doing it for free. Warranty is not a love job. It’s part of the business model.

THE DEALER PAYS

And the best bit here - perhaps - is that we send the successful dealer a modest bill for finding him a sale that he would otherwise not have made. We do not bill you. Not one cent. Not ever. So that’s nice.

TRADE IN

If you’ve got a trade-in we can usually handle that by remote control. You just fill in a form and send us some photos - and you have to be honest about the condition of the vehicle. But I think you’ll find that this, too, is somewhat more pleasant and less stressful than trading a car in, in that awful showroom floor environment.

FINANCE

And the finance? Well, we can tender that out in a similar way to the new car and we can kick a goal for you there as well. Ultimately the interest rate you pay is determined by a lending institution’s risk assessment of you, and for most people, our finance works out like this: That nine per cent the bank was going to sting you? You get to tell them to shove it.

THE FINE PRINT

Now I know this sounds pretty good - but there are some realities. I looked around everywhere for Harry Potter’s magic wand earlier … still can’t find it anywhere. And that means if there’s a fire sale right now, and the car you want is magically reduced to $19,990 drive away with a free auto upgrade (normally $27 grand) - we’re not miracle workers.

If the car is already bleeding its profit all over the floor, take the deal that’s already on the table. Without a Glock 23, and a certain vengeful gleam in your eye, there are no further discounts to be had. Likewise, if you’re an ace negotiator and you hit the right dealer up, at exactly the right time, then you might very well do as well as, or even better than, us. Stranger things have happened - although not all that often. Except of course in the Oval Office.

DEMONSTRATORS & USED

Some other things you need to know: We don’t do demonstrators or used cars (same thing, really) - although we do handle the finance for them. You don’t need to wait until the end of the month if you use us - that’s something I advise extensively in my book on beating car dealers, and in other reports - but it’s really a retail thing. In the fleet buying end of sales, where we operate, every day is pretty much the end of the month.

BESPOKE PRICING

Finally, in practice, a lot of people just want me to e-mail them a quote. Unfortunately, it doesn’t work like that. Not wanting to be unhelpful, but there’s no price list for me or the team to refer to. Each of our deals is individually negotiated, and the same car is never the same price, twice. It depends on a range of factors.

We hit up our contacts individually in every deal and we see how far up behind their backs various arms can be twisted. That’s why the process often takes a few days. And you also have to realise that some brands just discount more than others, typically, and some vehicles, especially newly released darlings of the market, take months on sale before any significant discounts are available. Early adopters often pay through the neck.

CONCLUSION

If you ultimately decide that you really do want that Volkswagen, that Jeep, that Ford - well, if you’re a masochist, who am I to prevent you experiencing fulfillment at the hands of those sadists? It’s your money - my imprimatur and my assistance do not have to go together.

Basically I’ve designed this process so there’s nothing to lose, and - potentially - money to be saved, as well as a whole theme park of unpleasantness to be sidestepped. To make an enquiry just fill in the form. We’ll do the rest. I’m John Cadogan. Thanks for watching.

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