Martin Lewis, assistant editor of What Car?, explained: 'Car brokers go bust faster than any other business. The ones that have been around for years and have survived the recession are fine. But there have been many who have gone down, taking people's deposits with them.'
The broker makes his money by taking a commission when the dealer is paid. He is able to negotiate a better deal because he is working in volume.
It all started about 10 years ago when the brokers were buying for fleets, Steve Tokatlian, sales manager of Quote to Quote UK, said. He said: 'I thought why not bring it to the eyes of the public and let the private purchaser benefit too? We act as an agent on our client's behalf. We take no deposit and our client pays the dealer direct.'
Although it is wiser not to pay a deposit, one well-established company, Motafile, thinks it is justified. Rick Morris, managing director, explained: 'We take a pounds 150 deposit as a token of commitment to buy. It costs us credibility with the dealers if a client changes his mind at the last minute.'
Another advantage of brokers is that they can help you choose the type of car you want. A dealer can only sell models from one manufacturer.
Mr Morris said: 'We have a computer system covering the 54 car franchises in the UK and will give a competitive price to anyone who rings up looking for a car from a Fiesta to a Rolls-Royce.'
And a broker will save you the face-to-face confrontation with a dealer. Pat Lawless, of Carfile, said: 'We do the leg work. Some people get fed up with the treatment they receive from dealers. They don't want to have to do the haggling.'
Going through a broker does not suit everyone. You need to know what you are doing. You have should have some idea of prices and, once you have decided on the exact model, test drive a similar one with the same sized engine. When you have agreed on a car and price the broker will send you a confirmation form which should give the car's price, specification and delivery dates. Once you sign you are bound to go ahead with the contract.
Find out from the broker where the dealer is, the car's registration and chassis number. As long as the dealer stamps your service book you should be able to have it serviced at any garage authorised to look after your type of car. Some brokers hold credit consumer licences and will be able to arrange HP for you.
The reputable companies all quote similar prices as they work on the same tight margins. The cheaper - and most likely dodgy - quotes are obtained when such devices are used as the broker encouraging the dealer to sell the car without a proper inspection.
Beware of brokers who charge a large deposit of more than pounds 150, quote prices that are pounds 200 to pounds 300 cheaper than anyone else, keep putting off the delivery date and withhold the dealer's name and address. If you are worried about the broker you could speak to his local trading standards office and check with the HPI (0722 422422) that that car being offered has no HP outstanding.
The only way you can find the names and numbers of car brokers is to look in specialist car magazines such as What Car? where you can also check current list prices.
Two examples of savings are a Honda Civic Esi 1.6 manual, for which the list price is pounds 12,446 but which could be bought for pounds 10,888 (an on-the-road price which includes 12 months road tax) or a 190 two-litre Mercedes which retails for pounds 19,000 but could be purchased for pounds 17,500.
Telephone numbers: Carfile 0335-60763; Quote to Quote 071-376 3022; Motafile 0992-500595.
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