Money Advice Service

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.

Find out more about nearly new cars on the Which? Car website.
  • 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

Top tip

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

Find out when to buy a new or used car so you make the most of dealers’ seasonal offers.

This article is provided by the Money Advice Service.