While most people love getting new cars, nearly everybody hates buying them.
In fact, a 2016 Harris Poll found 87 percent of Americans dislike the process of purchasing a vehicle at a dealership. This is largely because today’s car buying experience is still firmly rooted in the back-and-forth negotiations of the horse-trading era.
Fortunately, a car-buying cottage industry has sprung up to relieve this pain. However, car-buying services can have their pros and cons too. Let’s examine a few of them.
What Is a Car-Buying Service?
These organizations do all of the hunting and gathering (so to speak) so you don’t have to. You tell them what you’re looking for and what you’re willing to pay, then they’ll find the car at a price as close as they can get to what you need.
You have full approval over the deal, so you don’t have to worry about being blindsided with unexpected costs. What’s more, the better services do everything for you, including bringing the car to your home or office with all of the documentation you’ll need to sign.
Types of Car-Buying Services
These businesses typically fall into one of three categories.
Car Broker: Goes out and finds the car you specified. Handles all the hassles and brings the car to you ready to close the deal.
Membership Program: Organizations like Costco, AAA, the USAA and some credit unions get cars for their members. Pricing is pre-set based upon the deal the group has already negotiated.
Car Concierge: These people work in much the same fashion as brokers, but they provide more personalized service and — as you might imagine — tend to charge considerably more.
Car-Buying Service - Pros
You’re spared the irritation and anxiety that go along with buying a car at a dealership. In other words, you get all of the joy of the new car experience, while avoiding the headache of buying a new car.
Further, you’ll save yourself a lot of time and energy, as you’re spared the experience of going from dealer to dealer trying to find the best deal. In most cases, these service providers already have below-MSRP pricing baked in with the dealers they use, so you’ll get a discounted price without having to push for it.
Car Buying Service - Cons
You might have to settle for something just a bit different than what you wanted with a membership program, especially if you buy online.
What’s more, each of these services has costs of their own.
You’ll have to compensate brokers and concierges. If you’re a member of AAA, USAA or Costco, you’ll pay annual membership dues. Granted, the savings you can achieve usually offsets these costs, but if you’re thinking they’re free, you need to reconsider. Whichever route you consider, it’s always a good idea to run the numbers through a car finance calculator to be certain you’re getting the best possible deal.
Furthermore, you can often get an arrangement that’s just as good — if not better — on your own. You just have to be willing to hold your nose and suffer through the process. The good news is it’s much easier today than it was in the past. There are all sorts of resources online now to help you find pricing information, identify the closest competitive models and get advice about conducting negotiations.
In other words, taking the time to research your purchase carefully will tell you what you should expect to pay. If you persevere, you can often make a better deal for yourself. Ultimately though, the decision is yours. Now that you know the pros and cons of car buying services, you’re positioned to make the best possible decision for you.