When buying a new car, you can choose between using a car dealership or a car broker. Both have different advantages and drawbacks, so here are the facts you need to know before deciding.
Buying a new car from a dealer
Dealers are many people’s first choice when buying a new car, even though they don’t normally offer the kind of bargains possible through a car broker.
Here are the reasons for their popularity, along with a few drawbacks you need to consider.
Pros of buying from a dealer
Did you know?
A pre-registered or ‘nearly new’ car is a brand new car is heavily discounted because it has already had one owner – the dealer.
Dealers register new cars to themselves to get bonuses from manufacturers for hitting monthly sales targets, then sell the cars at reduced prices to shift stock.
- Your consumer rights are stronger when you buy from a dealer.
- Face-to-face customer service.
- You can part-exchange your current car.
- You can test drive and check the car.
- Dealers can offer the widest choice of cars, and your exact specification.
- If you have any problems with your new car, your dealer is likely to be local and so available to talk to in person.
Cons of buying from a dealer
- You’ll have to negotiate to get the best deal.
- You might not get the best part-exchange deal – you’ll get more selling your car privately.
- If you buy a pre-registered car, you are unlikely to get “new car replacement” cover from your car insurer in case your car is written off in the first year you own it.
Buying a new car from a broker
If you buy a pre-registered car, make sure this hasn’t affected the manufacturer’s warranty in any way.
Car brokers claim they can offer savings of up to £5,000 off a car’s list price.
This is because of the discounts manufacturers give them for selling a target volume of cars and because there’s no salesman’s commission involved.
Most are online, though some have premises as well. Brokers tend to offer cars they’ve pre-registered after delivery by the manufacturer, or to source new cars from dealers.
Pros of buying from a broker
- Savings of thousands of pounds are available.
- Most will have the model and options you require.
- Your new car will be delivered to your door.
- No haggling because you’re unlikely to be able to negotiate and will usually have to pay the advertised price.
Cons of buying from a broker
- Most brokers operate online, so you can’t just pop round to talk to them if you have problems with your new car.
- You probably won’t be able to part-exchange when selling your old car.
- Some brokers might not be able to offer as wide a choice of cars as a dealership, or the full list of optional extras.
- If you buy a pre-registered car you’re in effect its second owner, which can affect the car’s value when you come to sell it.
- Brokers can’t offer the face-to-face service a dealer provides.
- You can’t test drive the car, so would need to go to a main dealer to do this.
Your next step
This article is provided by the Money Advice Service.