Sunday, September 22, 2013
How to Save Money Using a Car Broker
If you’re on the lookout for a new car, you might not have considered using a car broker. Car broking is a booming industry in Australia with a whole host of providers promising to make your dollar go further by negotiating great discounts. Some customer savvy and a little shopping around at different brokers could save hundreds if not thousands of dollars.
The main draw of using a car broker or a salary-packaging service (offering novated leases) is getting fleet prices on private purchases. The process is fairly simple: brokers and salary package firms will contact a network of dealers (not always locally though, sometimes across other states and outside main metropolitan areas) to find the best deal possible for you. That is to say the dealership that is most keen to unload some of their stock.
The savings can be impressive and different brokers can give better results. In a study conducted by Drive.com.au, there was a difference of over $7,000 between the lowest and highest deals on a Mercedes-Benz C200. In general, according to the survey, there wasn’t much difference however in the lower and mid-range models, with differences of a few hundred dollars in offers on the Holden Barina hatch auto and the Mazda3 Neo hatch auto.
Novated leases from the salary-packaged firms tended to get a better deal on more luxury models. For those who are new to the concept of a novated lease, it is a special way of obtaining finance for a car that is backed by an employer. Essentially, the employee, employer and a finance company enter into a three-way agreement, called a ‘deed of novation’, where the employer agrees to make the repayments on the car out of the employee’s pre-tax salary.
The benefits of a novated lease, in addition to the savings, are usually greater flexibility with choice of car and the option for the employee to own the car at the end of the lease of term. Businesses that offered novated leases like Fincar tend to specialise in areas of car insurance and have strong relationships with finance and insurance provides so that customers get the most competitive deal. You’ll have access to greater options than you would by going to a normal dealership and if you need a loan or insurance they can save you money too.
Although brokers should be able to negotiate a good deal at any point, there are times when it is better to consider buying a car. The end of the month is a point when dealerships are striving to meet targets; and, even better, the end of the quarter when dealers are under most pressure to sell their vehicles. At these times, your broker is more likely to have the opportunity to drive a harder bargain.
Finally, do your own research on the car brokers and always make sure you know exactly what you want when you go in. You have the potential to save a great deal, but always be sure to read the fine print and do your due diligence.