Is a car buying service right for you?

Shopping for a new car or truck can be an intimidating process, especially when it comes to negotiating the price.

If you don't enjoy the prospect of haggling at multiple dealerships, you may want to explore the various car buying services available today. But what exactly is a car buying service and how can it help you?

What is a car buying service?

Let’s start by clarifying that there’s no single definition for what a car buying service is. That’s because the services offered can vary widely. Instead of focusing on the term "car buying service," think about what kind of assistance you need to buy a car. From there, you can determine the specific service that fits you best. Let's explore the main types:

Broker service

What they do: Car brokers act as a middleman between you and a dealer (or seller). You tell them what kind of car you want — the make, model, color, features and how much you're willing to spend — and they leverage their expertise to find you a car.

Because they typically have industry experience and are knowledgeable about financing, they’re able to handle all the talking with dealerships to get you the best deal.

Positives: Brokers usually save you time and effort. They are professional negotiators trying to find better prices and remove the stress of doing so on your own.

What to watch out for: Brokers usually charge a fee, either a set amount or a percentage of the car's price. It's important to find a broker with a good reputation and with access to a broad range of inventory. They may receive a side commission for steering you to certain dealers.

Concierge service

What they do: A full-service car buying concierge is like having a personal shopper for cars. They do everything: searching and finding the car, negotiating the price, managing paperwork, getting you a loan, and even delivering the car in some cases.

Positives: They offer maximum convenience with white glove service. Car concierges are expert negotiators with broad access to inventory, even privately listed cars, to get you the best deals.

What to watch out for: These services cost more, sometimes hundreds or even thousands of dollars extra. This may mean you’re paying more up front for the total purchase of the vehicle.

Online car buying platforms

What they do: Online car buying platforms and retailers let you shop, finance and arrange delivery of cars in their inventory. These platforms are designed so you can buy a car all online or via a mobile application. Sometimes you can even sell or trade your car with these services.

Positives: They’re easy and convenient, with lots of choices and no need to go to a dealership. Many offer a return period (like 7-10 days). High quality photos and videos help you get a feel for the cars condition.

What to watch out for: It can be harder to negotiate the price, if at all. You also can’t thoroughly inspect or test drive before you buy (unless you return it). For those in the United States, the inventory is often spread throughout the country, meaning you may be responsible for shipping fees.

Car buying programs

What they do: These programs are available through membership-based organizations, such as banks, credit unions, wholesalers, clubs and insurance companies.

These organizations work with manufacturers or dealer partners to offer pre-arranged auto discounts to their members. You pick the car, and they send you to a dealer with the discount. In some instances, these programs also offer special financing terms or loan pre-approvals to streamline the process.

Positives: You’ll get pre-negotiated discounts with less haggling and there are trusted brands behind the program. If you like to be hands-on, a car buying program adds the convenience of technology with the hands-on approach of visiting the dealer.

What to watch out for: Organizations usually only work with certain dealers and cars, meaning you may have fewer choices than you would if you used other services or by doing it on your own. You still have to go to a dealership.

Auction service

What they do: This service allows you to buy cars at an auction. Some services will even bid for you.

Positives: You might find rare, cheap, or unique cars.

What to watch out for: It's riskier, especially if you can't see the car first. Usually, you get the car "as is," with few guarantees.

Fleet service

What they do: These services specialize in selling off-lease vehicles or used cars retired from corporate fleets and rental car companies.

Positives: The vehicles are usually late-model cars with lower mileage and often well-maintained.

What to watch out for: The selection might be limited, and there might be some cosmetic wear from previous use.

So, which car-buying approach is best for you? That depends on your priorities. Do you value convenience above all else? Are you comfortable with some risk for the chance of a great deal? Or do you prefer a hands-on approach, even if it takes more time? Let's explore some of these factors to help with your decision.

Finding the right approach for you

Now that you understand the different services, choosing the right one depends on your priorities and preferences.

Determine your priorities and preferences.

Buying a car is a big decision, and while there are common priorities to consider, it all boils down to your personal needs. Before you start looking at cars, take a moment to think about what’s most important to you. Let’s consider some key factors:

Time: How much time do you have to spend shopping for a car? Even if you have the time, is this something you want to spend your time on? If time is limited, consider services like an online platform or car concierge.

If you have more time and enjoy the hunt, you could work with a car buying program, visit dealerships directly or even search for deals on your own. This approach lets you thoroughly research and compare options at your own pace.

Budget: What's your price range and how much car can you afford? If you're on a tight budget, auctions or buying used cars from fleet services (like rental car companies) may offer significant savings. Keep in mind these options often mean purchasing cars "as is," with no manufacturer warranties.

A more flexible budget opens up more choices, making services like brokers or concierges a worthwhile investment since they can usually negotiate better deals than you could get on your own.

Technology: How comfortable are you using online tools and apps? If you’re tech-savvy, online platforms are solid options. They offer easy to browse inventories, options for financing and even potential delivery entirely online.

If you prefer a more hands-on approach, stick to traditional dealerships or work with a local broker or car buying program so you can find more comfort in fully understanding the vehicle you’re getting.

Negotiation: How comfortable are you negotiating prices? Some people enjoy the back-and-forth of negotiating, and if that’s you, buying directly from a dealership or even using an auction service might be a better fit since you’ll feel like there’s more control over the final price and you can ask questions.

But if you'd rather avoid the haggling, a broker, concierge service or car buying program may be less stressful.

Risk: Are you willing to take some risks for a potentially lower price? Auctions and online platforms can offer solid deals, but there's a higher chance of finding hidden problems with the car.

If you want more certainty, stick to dealerships or work with a reputable broker or concierge who can help you avoid potential issues.

Dealership experience: If you enjoy the process of visiting dealerships and test-driving various vehicles, you'll likely find the traditional car buying approach more comforting.

Further, if you already have a trusted relationship with a dealership or salesperson, leveraging those connections might be the most straightforward path. They may offer preferential treatment or simply make the process much smoother.

Level of detail: If you enjoy thoroughly researching various models, comparing features and carefully examining details, a more hands-on approach could work well for you.

Online platforms may also allow you to understand the nuances of models within a broad inventory as opposed to being limited to a few dealerships in your area.

If you prefer a more streamlined process that still provides some control, check to see if you have access to a car buying program through your membership in an organization. Banks and credit unions that offer these programs may be able to provide competitive financing as well.

Desired vehicle type: How important is it to find a car with very specific features and personalization? If you're looking for a common make and model, online platforms or a local dealership might be sufficient.

If you need a rare, classic, or highly customized vehicle, a specialized concierge, broker or auction service might be necessary to find your ideal car.

Finding your perfect car-buying method

Now, let’s combine what you’ve learned about yourself with the information on different car-buying services. Think about your answers to the questions above. What stuck out to you? Here’s some common situations to consider:

Less effort to close the deal

If you decide to use a car buying service, you'll still have work to do. Once you know the service that’s best for you, you’ll need to find the best option within that category. The process requires you to specify what you're looking for in a vehicle, and it's important to try to narrow your choices to one or two makes and models.

Although getting prequalified or preapproved is not required, it can simplify car buying. Different lenders have different preapproval and prequalification definitions and processes. Be sure to check your bank's requirements. Some car buying services also might offer a discounted loan rate in exchange for closing the deal through them.

With a bit of effort and patience, you might be in your new ride with a lot less stress thanks to modern-day car buying services.