What Is an Auto Broker?

Auto brokers have access to great used cars — just not always at a big discount.

Cars at dealershipShutterstock


Auto brokers can give you two services that differ from those offered by new-car dealers: access and expertise. Their dealer or broker license gives them access to wholesale dealer auctions — unavailable to the general public — where off-lease vehicles, trade-ins, and repossessions are sold.

An experienced auto broker with a track record of finding great vehicles can also provide a more personalized experience than a dealer. They can go to auctions on your behalf, provide access to detailed condition reports and Carfax history reports, and arrange for a post-sale inspection of the vehicle to recondition the car before putting it on their lot.

Should I Hire an Auto Broker?

There are a lot of benefits to hiring an auto broker, but not everyone is a good fit for such services.

An auto broker is generally not ideal if you don't know the exact vehicle you want or if you must have a car in perfect condition. Even the best vehicles at a wholesale auction will likely have dents, dings, and scratches, along with minor maintenance and repair issues.

Auto brokers can offer a very valuable service, however, if you want an unpopular vehicle and are willing to deal with minor cosmetic issues.

How Do I Evaluate an Auto Broker?

Auto brokers must be licensed state by state, but the qualifications are generally minimal and mainly focus on financial resources. That leaves it to the car buyer to determine the desired experience level of a broker.

Online reviews and personal references are two ways to conduct a search. Essentially, a knowledgeable auto broker should be able to speak to the vehicle you're interested in to thoroughly address your questions.

Enthusiast forums of the specific vehicle you want can also inform you about what to look out for when buying that vehicle, as well as the potential issues and weaknesses associated with that model.

How Can I Protect Myself Financially When Working With a Broker?

Typically, buyers who use a broker can expect to pay additional costs atop the vehicle's purchase price. These fees can account for charges by the wholesale auction, the broker's purchasing fee, transport to your residence, and post-sale inspection.

Because these fees can add up quickly, you may want to get a written account of the vehicle's details and the overall transaction costs upfront before deciding on the purchase.

You should receive a signed pre-purchase agreement that spells out exactly what the auto broker will do, your responsibilities, and how much the service will cost. Once you identify the specific vehicle and the amount you're willing to pay, the agreement should highlight all those expected costs.

Some auto brokers will require a deposit based on the vehicle's selling price that may be refundable if the vehicle fails a post-sale inspection at the auction.

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Steven Lang
Steven Lang is a special contributor to Capital One with nearly two decades of experience as an auto auctioneer, car dealer, and part owner of an auto auction. Some of the best-known auto publications turn to him for his expert insight. He is also the co-developer of the Long-Term Quality Index, a survey of vehicle reliability featuring over two million vehicles that have been inspected by professional mechanics.