Which is the best fit for you as you try to find your next car?

Quick notes

-Car buying services can be a great resource for busy people or those who aren’t really car savvy.

-Purchasing a car directly from the dealership allows a purchaser to cut out the middleman and reduce costs.

-Dealership purchases are better for those who are comfortable negotiating their own purchases.

Over the years, car-buying methods have changed. Times have moved from the one dealership in town to the online aggregation of all online car adverts, to online car purchases, to car buying services.

The method of car purchasing that is best for you will depend on how much car knowledge you have, whether you are comfortable negotiating your own purchase, and how much time you have to look around and research for yourself.

The deal with dealerships

The classically tested, tried-and-true method of purchasing a car is going to a dealership. A large parking lot or building with numerous models and colors, all available to be sat in, have their doors opened, have their hood popped, and be test driven.

Dealership purchases are great for being able to obtain the car information requested immediately, see what the car looks like in person, and take it immediately for a test drive. They’re also great if you are comfortable negotiating your own purchase contract.

If, however, you are tight on time, don’t know a lot about cars, or are not comfortable sorting out the terms of the purchase agreement, then a car buying service may be for you.

The real difference between these services is that at the dealership all of the information and assistance you get with learning about the car is provided by someone who obtains a financial incentive if you purchase the car.  Car buying services work for you.

Car buying services

There are different kinds of car-buying services that offer different types and levels of services. All at varying costs. Some of these services come as a courtesy as part of another service or membership already owned, some are independent services.

Generally, the three main types of car buying services are car broker, membership and concierge.

Car broker

A car broker will either work for a brokerage or independently. Generally, car brokers are paid by the company the purchaser eventually buys the car from. Their fees are usually paid for by the seller, but they may also charge small administrative and possibly a percentage of the money you saved using their service.

Who your broker is paid by will determine their allegiance so while they will provide you with the same facts on the car as anyone else, they may have a vested interest in pushing you towards a specific vehicle or seller.

Brokers can be found through your local search engine.

Membership

Other organizations and institutions of which you are a member may have a car-buying service that is included as part of the membership. This would be related to memberships such as credit unions, big-box stores such as Costco and credit card companies like American Express.

Photo Courtesy: [EveryCarListed P/Flickr]
These memberships will allow you to purchase at a price that is guaranteed for its members. There is no personal negotiation or other reductions though; the price is the price.

Additionally, car-buying services offered through memberships generally only provide for the negotiated price and advice or information about vehicles that are part of their arrangement. They do not deliver the car for a test drive, nor review or otherwise deal with the contract between you and the dealership.

Car concierge

A car concierge will generally take care of everything relating to a vehicle purchase. They will search, bring the car for a test drive, negotiate the price, handle the contracts and deliver the car to you.

This is elite service and is priced accordingly, but because they work for you they can often obtain savings that you may not have otherwise. The cost is generally $600-$1500 depending on the price of the car. Reviewers of car-buying services have indicated that through the use of a car concierge, they were able to find such a great deal that the savings more than paid for the service. Something to keep in mind.

Final note

The real difference between these services is that at the dealership all of the information and assistance you get with learning about the car is provided by someone who obtains a financial incentive if you purchase the car.  Car buying services work for you. They provide information from a more unbiased position, though some of them have allegiances and alliances with specific dealerships.

The method of car purchasing that is best for you will depend on how much car knowledge you have, whether you are comfortable negotiating your own purchase, and how much time you have to look around and research for yourself.

If you don’t have the time to research or you don’t know a lot about cars, a car buying service can be a real money saver in the long run. It will help prevent you from buying a car you may start to dislike after a short period of time, something that doesn’t really fit your lifestyle needs, or something that doesn’t have the features and specifications that you want or require. A dealership will take a new car back if you don’t like it or change your mind, but that usually comes at a substantial cost.

A deeper dive — Related reading from the 101:

-Wanna get the best new car price? Shop for the loan, then the ride | Finance101

Whether you buy your car through a dealership or a car buying service, it’s best to know beforehand exactly what your budget is. 

How to buy a dependable used car | Autos101

If you’ve decided that a car buying service is not for you, here are some tips and information on how to buy a used car directly from the seller.