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Car Buying Services: What are they and how do they work?

Car Buying Services: What are they and how do they work?

 

Purchasing a new or used vehicle can often be a daunting task. They are expensive, there are loads of options available, and there are many places to buy them from. Whether it’s a business vehicle, new fleet or a personal purchase, getting the best deal is at the top of almost every buyer’s mind. As we know with finance, instead of dealing with lenders directly, using a business finance broker is a better choice. The same applies to buying a car.

Rather than visit multiple dealerships and negotiate deals back and forth between them, car buying services look to offer a convenient alternative. There are now quite a few car buying services on the market, all promising to get you a cheaper, fairer and smoother deal. Is this actually the case? Let’s take a look at what a car buying service actually delivers for you and your business.

What is a car buying service?

A car buying service (or agency) is effectively a means to connect car buyers with a range of car dealers. Most buying services promise to save you time, get you better prices and secure discounts on fleet purchases. How? They act as the middle person between keen car buyers and dealerships competing for more customers. By connecting these parties in high volumes, dealerships are willing to offer them competitive prices for their business. Of course, this drives down costs and makes for a superior purchasing journey for you – often saving thousands of dollars in the process.

“Lifes too short to haggle back and forth with overzealous car salesmen.”

There are different types of car buying services, from basic cost comparison and deal aggregation websites to full end-to-end services that facilitate purchases and new car deliveries straight to your business’s doors. Either way, they come at no cost to the buyer and save you the effort of negotiating with individual dealers and the all too common overzealous car salesman.

How do they work?

Getting an offer from a car buying service is extremely straightforward. Most of the major car buying services operate and advertise their processes in much the same way:

  • Submit what you’re looking for, such as make, model and price range. This is often done on their website, or via a convenient app.
  • Have a chat with one of their agents, so they understand exactly what you’re after, and to discuss potential (better) alternatives.
  • The buying service will tender your quote out to their range of trusted dealerships with the opportunity for them to win your business. This often occurs within the day.
  • You receive a range of offers to choose from – select the best price and terms. If you need to organise finance, you now have all the information you need.
  • Take delivery and enjoy your new vehicle or fleet!

Is it worth it?

Most of the standard service car buying agents do not charge a fee to buyers. Instead, these services generate revenue by charging the dealers a small ‘lead origination fee’. If the service is free, it’s hard to argue against at least giving it a go. Car buying service CARDEALS2ME claims to have saved their customers an average of $4,800 – quite a lot!

Even if you don’t manage to secure quite this level of savings, the convenience of shopping from home and knowing you got the best deal out there is all you really need. You don’t have to deal with salespeople, and it’s a great way to compare any current offers you’ve been given with the rest of the market – all from your phone or laptop.

Finding the right business car finance

When it comes to purchasing a vehicle or fleet for your business, making use of suitable financing is an excellent idea for your cash flow. There are a few different types of car finance commonly used, such as a chattel mortgage (where you own the vehicle from the start) and a finance lease (you do not own the vehicle, but have the option to at the end of the lease). Establishing whether you would want to own the vehicle on your books, how much you intend to use your new car and the price you’re willing to pay (to calculate your monthly repayments) are key to identifying your best option.

“Talking to an experienced broker is a great idea to ensure you also lock in the best vehicle finance.”

Similar to a car buying service, business car finance brokers use their network of lenders to source your business the best financing deals. After securing an offer from your car buying agent, talking to an experienced broker is a great idea to ensure you also lock in the best vehicle finance.

If your business is looking to secure suitable car or fleet finance, Capital Plus Finance is an experienced vehicle finance broker that has your best interests at heart. The team at Capital Plus Finance will do everything we can to help you secure a suitable finance solution for your small business. Please give us a call anytime to find out more or to have an obligation-free chat about your business’s funding situation.