Do car brokers earn their keep?

We have used dealfinder.ca several times and it was extremely worthwhile. We paid a low flat fee and the transactions were a pleasure compared to dealing with a salesperson at a dealership. You pick up the vehicle at a dealership within a reasonable distance from your home and the purchase is actually made through the dealership except that you get significant savings over anything you could bargain on your own. We have recommended the service to all our neighbors and friends and have heard nothing but positvie feedback. They save you money on all your options and extended warranty if you want it. It makes buying a new vehicle or leasing a pleasure and I wouldn't ever consider doing it any other way.

The 2 to 3,000.00 savings they claim is rediculous. The average mark up on new vehicles is 8%, do the math. A 20,000.00 car will at most have 1,480.00 in mark-up, after dealer profit and broker fees you might save a few hundred dollars. This very statement by a broker should make you question their credibility, "In addition to saving you the hassle of going from dealership to dealership, brokers who know the business say they may be able to do $2,000 to $3,000 better than you would on your own – even in today's economy." It seems that many do not appreciate that a dealer has to be profitable in order to survive. Who is going to fix your cars and honour your warranty? If you haven't been into a dealership lately you may be very surprized, most employ professionally trained and licensed product advisors. If the dealership you chose does not respect you ,find another one who values your time and business, the vast majority do! Dealers also contribute millions of dollars to the economy and charities each year. The average return for the millions they have invested? About 3% I wish I could buy all my products at an 8% mark-up but I realize that a business has to make money to survive.

Excellent point by Dan. What is it with people these days ? Too feeble minded to say no to a salesman ? Too naive to to know the difference between a good deal and a bad one ? Too inconvenient to go to a dealership but they'll spend time and money to go to a car show ! Probably the same people who pay $1. to get $20. out of the ATM ten times each week. Probably the same kind of people who pay to get their simple taxes done because they're too lazy or too stupid to do 'em themselves. Boogie Boogie Man used car salesman !!! Are ya scared yet ?

Dan and Richard got it completely wrong. Avearge markup 8 % is when you got honest dealers. Most of the times the New or used car marked up by 20-30 %. If you don't negotioate, you will be taken to the cleaners. I have seen Price negotiated down from 30000 to almost 22000!! where is your 8% markups??

1) if markup was always 8% it would be easy - some dealers start much higher hoping for an uninformed customer, who is not keen on haggling. these people would be better using a broker than trying to negotiate themselves and getting taken advantage of. they're not necessarily stupid or lazy, just don't want to bother "dancing" with a slimy salesman.
2) 2% sounds better than 8%, thats what my dealer was happy with for an easy sale - I knew the vehicle I wanted, tracked down the dealer invoice price and incentives. (The first dealer wanted his 8% and thought he was doing me a favour. I'll never go back there.)
3) APA is a great way to go - $25 membership if I recall correctly and they found me the best price on 2 cars I purchased recently. No haggle, no hassle, no problem. Again they let you know dealer invoice and how much the car is marked up. Obviously the dealer has to make some profit. And he gets my business for maintenance for years to come.

Dan: if 3% return, they are in wrong business. Sell and buy GIC's. I can speak on this as I am former dealer principle. I agree brokers overstate what they can save, but their claims are no more exagerated than your average dealers. The real savings comes from a US purchase. With the dollar at par and the far greater selection in US, it makes sense to buy there. Not for an econobox, but on higher end vehicles the savings go up exponentially. The process is simple, and can actually make a vehicle purchase satisfying-what it rarely is going through your local dealer.

30% mark up I'm in the wrong business.......with all the ads and the internet no way. Maybe a small independent but, not a franchised store.

Interesting is the way you reveled the actual points. In my opinion the car brokers don’t earn their keep instead they get the opportunity to earn only when there is any deal…

I am "surprised TransDeal.ca isn't listed here" I used them and they were great no fees charged to the consumer, myself, and the price of my car was far better, than what I got through car cost Canada.

If you are a buyer and you know you have the advantage in dealing, go for it. If you are the dealer having the advantage to the buyer, please the buyer so that he would buy your car.