8/20/2012 2:15 PM ET|
Take the hassle out of car buying
Oren Weintraub, the president of Authority Auto, calls himself a "car concierge" to distinguish his car-buying service from that of car brokers who accept commissions from dealerships. Authority Auto typically charges a flat fee of $595 to $1,595, depending on the price of the car, although it will also review a car deal you've negotiated. If the company can wrangle you a better deal, it keeps half of the savings.
Weintraub said he much prefers his business model to that of his previous profession: He was the general sales manager of a large Ford dealership for 12 years.
"We were an ethical car dealership. We didn't have to lie, cheat or steal like many dealerships do today. But we were professional negotiators," Weintraub said. "Most people didn't stand a chance. . . . I got tired of developing good rapport with my customers and then out-negotiating them."
Weintraub said his company bargains over every aspect of the car-buying experience -- not just the price but the financing, the trade-in and any add-ons. That helps distinguish his company from the club car-buying services, such as those offered by Costco, AAA and Consumer Reports.
The club services promise transparent, upfront, discount pricing and connect members with participating local dealers. Once on the lot, however, people may discover the car they want isn't there, or if it is, they still have to negotiate financing, their trade-in and any add-ons.
"They may be caught off guard," Weintraub said. "They may get a good deal from Costco, but . . . the dealer will make all the money on the back end."
Still, the club car-buying services have their advantages. I tested Costco's "Build and Research" tool, for example, and found it clearly laid out the invoice and sticker prices not just for car itself but for all the available options. Consumer Reports' "Build and Buy" tool was a bit trickier to navigate but provided contacts with more dealerships (three, to Costco's one).
USAA's car-buying service, meanwhile, used a similar tool but offered a sweetener: a low-price guarantee that promised to refund the difference if you found the same car for less within three days of your purchase.
The dealership contacts were all in the companies' Internet departments, which Reed said tend to offer a better customer experience. Many of the initial emails I got from these dealers invited me to "come on down" to their lots. Once I made it clear I wouldn't be doing that, though, each salesperson responded to my requests for more information and firm price quotes.
Another option for those who want more personalized service is an online car-buying service: AutoNation Direct, which represents AutoNation's network of 200 dealerships, and Carsala, which primarily negotiates used-car deals.
Carsala positions itself as a consumer advocate, saying it's "not on the dealers' payroll." Instead, the service takes 20% of the savings it wrangles off the cars' asking price, with a $399 maximum fee, and offers a lowest-price guarantee.
AutoNation Direct makes clear it "is not acting as an agent of the consumer" but is instead a sales and leasing "facilitator." What that means is that it's working on behalf of its dealerships, but that doesn't mean you can't get a good deal, Reed said.
AutoNation offers "pre-negotiated competitive pricing." You're hooked up with a personal consultant who searches AutoNation lots for the car you want and gives you a firm price on it as well as a "true market value" price for your trade-in.
My consultant assured me he would provide prices only "on a car that actually exists" -- not a small thing, since some dealerships pretend they have the car you want just to get you on the lot. The value he offered for our trade-in was, in fact, about $1,000 above Edmunds.com's True Market Value for similar trade-ins.
For those who don't want to step foot on a lot, AutoNation Direct can deliver the car to your home or office and pick up your trade-in.
Most car-buying services offer a trade-off. You'll probably pay a few hundred bucks more for the car than the rock-bottom price a skilled negotiator could manage. But you also opt out of the hassle. And that can appeal to many a haggle-weary buyer.
"A car-buying service is going to save you lots of time," Reed said. "It's going to be an expedited, protected experience."
And that's definitely worth something.
Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.
VIDEO ON MSN MONEY
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'