Motor Scout: Car brokers can save you thousands on a new car
However, if you aren’t keen on spending your entire weekend shopping around there is a way to save thousands on a new car without leaving your house.
Motor Scout, a new online car broking business, helps to take the hassle out of buying a new car.
Motor Scout chief Peter Gee decided to start the business after he had a shocking experience at a dealership.
“I wasn’t happy about the deal I got and the first thing I had to do when I left the dealership was to go to the petrol station because the tank was empty,” said Gee.
That was when Gee realised he could save time-poor buyers a lot of money by doing all the hard work for them.
“Roughly we save people about 10 per cent. For a car like a Kia Picanto it won’t be much but on something like a Toyota LandCruiser it can be 10 or 20 grand,” said Gee.
And he saw a gap in the market — many Australians were happy to use a mortgage broker but very few used the automotive equivalent to make what is often their second biggest financial purchase.
“With a mortgage broker you could be getting four or five grand (off). With cars there is a lower margin, so that has probably held back others from (car broking),” he said.
The purely online business has about 1000 dealers in its network. Buyers choose the exact vehicle they want, down to the colour and options, and the dealers effectively pitch for the customer’s business.
All dealer quotes are provided directly to the customers to decide in their own time.
Motor Scout doesn’t take a cent from buyers, says Gee — the dealer pays a fee for a successful lead, effectively a finder’s fee.
Gee explains that the buyer can trust the entire process — buyers can see every detail of the cost associated with the car so they know the broker isn’t adding on anything to the price.
“Everything we get from the dealer is completely transparent. There are no hidden costs,” he said.
And one of the biggest issues customers have with going into dealerships, according to Gee, is that they don’t want to be pressured into buying the car there and then. Some may think they are good at negotiating but that’s not always the case.
“Really our intention is to cater to people who don’t need to, or don’t want to, or are sick and tired of going to a dealership,” von Sanden says.
“The biggest frustration for customers is if they haggle and then they go to a barbecue on Saturday and someone got a better deal.
“They hate the retailer for it because ‘this bloke has ripped me off’ … (fixed prices) are more transparent, more honest.”
Jason Nomikos, director of customer management for Mercedes’ regional arm, says customers do not enjoy negotiating prices with sales staff.
“It’s not often a pleasant experience for many, if not most customers,” he says.
“Not everyone feels comfortable during the negotiation.”
Gee doesn’t think the Australian market is ready for fixed price online car buying, as employed by brands such as Tesla, and he feels dealer groups will fight back hard.
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