By Alexi Falson, 24 May, 2022
Is It Better to Buy a Car From a Dealership or Car Broker?
AF By December 17, 2021
Purchasing a new car is one of the single biggest financial decisions you’ll make in your lifetime, and as a result, you want to make sure that you can trust the people that you’re buying the vehicle from.
While buyers have more avenues than ever before to make their purchase, this abundance of choice can also make it more difficult to know the best way to go about making your purchase.
We’re here to help you make an informed decision with confidence not only in your purchase, but those that are helping to facilitate the transaction.
While on the surface dealerships and car brokers appear to offer nearly identical services, once you start digging a little deeper, you may find that one service offers far more peace of mind than the other. With that in mind, we’ll help you understand the differences between choosing a car broker or going directly to the dealership.
Differences Between a Car Broker and a Car Dealership?
A car dealership is a business entity that acts as the retail point of contact between a vehicle manufacturer and the buying public. While this agreement can come in all shapes and sizes, in essence, the car dealership hires a team of salespeople that sell a customer their preferred vehicle out of the dealers stock, and also helps to organise finance and other services when the transaction reaches that point.
A car broker, on the other hand, acts as the customers intermediary or ‘bridge’ between a car buyer and the manufacturer, dealership or fleet manager that is selling the vehicle. The car broker provides a number of services, including finding appropriate vehicles, communicating with vendors, customer support (pre and post sale) and helping to organise competitive finance rates. For a better idea of exactly how car brokers operate, we’ve covered the topic in a previous post that you can access here.
What are the Pros of Buying a Car From a Dealership
The predominant benefit of purchasing a vehicle through a car dealership is the immediate access you have to the vehicles. The face-to-face benefits of visiting a dealership may be beneficial for those making the purchase, and can help give some buyers added confidence when making a large financial decision. Visiting a dealership also means that you’re able to take that vehicle for a test-drive potentially on the spot. Although it is worth considering, a car broker is able to organise all of the above experiences at their customer’s discretion.
Purchasing a vehicle from a car dealership can sometimes be faster than using something like a car broker, provided you’re in the position that you can easily obtain finance for the purchase.
Direct access to the vehicle for test-drives
Onsite staff to help answer any questions
Immediate physical inspections of vehicle
What are the Cons of Buying a Car From a Dealership
One of the most salient downsides of purchasing a vehicle from a dealership is that you, the buyer, are significantly limited when it comes to choice. While a dealership might offer everything from hatchbacks, sedans, SUVs and people-movers, they often remain limited to offering models from a single manufacturer, or in some cases a small handful of manufacturers. As a result, you’re limited in terms of choice when it comes to assessing all of your potential options on the market, whereas a car broker will help point you in the direction of your preferred vehicle.
Much the same applies to your options when it comes to financing the vehicle. Typically, a car dealership has previous partnerships with finance providers organised, meaning you can be limited in terms of your options for the best possible finance deals on your new car.
Another downside of purchasing through a dealership is the fact that they see the customer as a one time purchaser. This is because most people aren’t buying cars too often. Meaning, dealerships have the upper-hand, in that, they are professional salespeople selling to a person who might only be in that position once every three to five years. This can expose a buyer to being taken advantage of, which can be avoided if going through a professional car buyer, aka, a car broker.
Pressure from sales staff during negotiations
Options are limited to one, or small number manufacturers
Interacting with biased sales staff
Limited finance options
What are the Pros of Buying a Car From a Car Broker?
Using the services of a car broker gives buyers far more flexibility and choice when it comes to purchasing a vehicle. This is because a car broker isn’t brand loyal like a dealership is, which means they’re scouring the entire automotive market to find you the perfect vehicle, rather than choosing from an extremely limited list. This independence eliminates any bias or prejudice from the equation, so you can find your perfect car at the best price.
Another major advantage of using a car broker is the potential savings on offer, when compared to a car dealership. The best car broker services here in Australia have access to what’s known as fleet buying power, thanks to their connections and the bulk buying power that they retain.
A car broker also helps to alleviate the stress of purchasing a new vehicle and trading-in an old one, which allows you to spend more time on other activities than being bogged-down in the hunt, which is why they’ve become a popular option for those leading busy lives. This also applies to the negotiation phase, which often proves a stressful process for buyers interacting physically in a car dealership. With a car broker service, the broker will lead the negotiations for you, taking into account your budget and desire for any added extras.
Another benefit associated with car brokers is the customer care. This is because the broker is there to serve the customers best interests, that's it. Weather the customer has issues with their test drive, or the car doesn’t meet the customer specifications after delivery, their broker will be there to help them through the whole process.
Significant potential savings with bulk-buying fleet discounts
Organise trade-ins for your old vehicle
Expert knowledge from the car broker
Superior choice across all manufacturers; not just one
Eliminates bias and brand prejudice
Increased finance options
Easy price comparisons
Reduced stress through avoiding direct negotiations
Convenient test-drives and deliveries to your workplace or home
What are the Cons of Buying a Car From a Broker?
Depending on which car broker you go with, it may take time to get your new car. However, this is rarely the case, and when you go through OnlineAuto for example, buying through a broker only entails an initial phone call of 10 minutes and any time required to test drive. Compare this to the dealership process of hours spent on research and many weekends visiting dealerships to negotiate the deal.
Another consideration is the fact that the buyer cannot have the immediate physical interaction with a vehicle. However, once the buyer decides on a vehicle they want to test-drive, the broker would be able to organise it at their closest dealer for a time that suits them best. This can make the process more streamlined than the original rigmarole of visiting a dealer.
Finally, it’s essential that you consider the fees that the car broker is charging you for their services to ensure that it makes the purchase worthwhile on your end. Sometimes the fees attached to a car broker’s services may outweigh the savings they offer, so it’s important to do your research and ensure this is not the case. At OnlineAuto.com.au we charge no additional fees for our service. Our referral fee is paid to us by the winning dealer that we source your car from and is included in the price of the car, covering procurement and delivery management. It also ensures you have a dedicated car buying specialist from the beginning of the process to finally having the car delivered to your front door. To get a better understanding of the fees that car brokers charge, please refer to a previous article here.
May be a longer process compared to dealerships
Lack of immediate physical interaction with the vehicle
Potential fees attached to car broker services
Is it Better to Buy a Car Through a Broker or Dealership?
When it comes to which is better, it will always depend on the individuals circumstances and preferences. While some buyers embrace a good old-fashioned price negotiation with a dealership, others find this part of the process so stressful that they often cave to pressure and make an illogical financial decision. However, it is worth considering that if you find the right car broker, they would provide a better service, allow access to more vehicles, provide non-bias advice, source a better deal and deliver a smoother, stress free experience.
If you’re unsure, see for yourself and put our friendly car buying experts at OnlineAuto.com.au to the test and witness the results.
In short, the answer is something that only you can be sure of, so long as you have been presented with all the relevant information, and you’ve enquired about the potential savings on offer through a car broker compared to what price is available at the dealership. Click here to find out just how much OnlineAuto’s car-buying experts can save you on your dream vehicle.
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