Brokers - how and why?

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Mon 9 Feb 2004 15:56
Brokers - how and why? - MB
Can someone please enlighten me as to how this broker thing works? Why do manufacturers use them and how is it poss that they are able to offer much better deals than the manufacturers' own dealers?

Is this discounting on the quiet or simply buying in bulk and passing on the discount?

I'm talking UK registered cars here not imports.

Many thanks

MB

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Mon 9 Feb 2004 16:29
Brokers - how and why? - Welliesorter
I only have experience of using one (www.ukcarbroker.co.uk ) but the others I looked at seemed to work in similar ways. The broker negotiates the prices with, and introduces the customer to, the dealer. The identity of the dealer isn't revealed in advance because otherwise there'd be nothing to prevent the buyer trying to cut out the middle man.

For this the broker gets a cut of the profits. All money, including the initial deposit, is paid to the dealer rather than the broker. This is reassuring because the dealers tend to be companies you've heard of, the brokers often aren't. The broker's fee is paid by the dealer, not the customer.

Presumably the dealers are willing to give the discounts because a lot of custom is passed their way.

If you buy in this way, you are buying from a main dealer although it may not be a local one. Home delivery is therefore usually part of the deal.

It's no riskier than buying directly from a main dealer, unless the distance becomes an issue.
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Mon 9 Feb 2004 16:55
Brokers - how and why? - MB
Thanks for that - however, I'm still not quite sure how the broker gets so much of a better deal than a person who walks into the dealership...
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Mon 9 Feb 2004 17:15
Brokers - how and why? - trancer
A broker might arrange hundreds or maybe even thousands of car sales in a year, someone walking off the street may by a car every 3-5 years. Who would you want to make the happiest?.

Dealers would rather make 100 pounds each on 20 cars sold through a broker than 2,000 pounds on 1 car sold to a customer off the street willing to haggle for hours on end forcar mats and mud flaps thrown into the deal.

Money talks, a happy customer who may or may not return to buy another car(or even fill out the customer service postcard!!)walks.
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