A Car Buying Service You'll Actually Love...

What are car buying services?

Car buying services exist to help consumers navigate the difficult process of buying a new car.

Why is buying a new car difficult? Well, car buying puts consumers through a number of processes which can be unpleasant (or at the very least time consuming).

These include...

• High pressure negotiating with experienced salespeople
• Spam and unwanted phone calls from dealers after entering your contact information on a website
• Various attempts by dealers to sell you upgrades and features
• A confusing list of pricing variations (lease terms, trade in values, rebates, etc)
• A confusing list of taxes and fees (it can be difficult to tell which are legitimate)

The end result is that many consumers end up leaving a dealership without knowing if they got a good deal.

This "information asymmetry" between buyers and sellers is a source of profit for dealerships - they can make the most money from uninformed consumers.

For these reasons, some consumers choose to outsource the car buying process to a professional - much like they would with a real estate agent or mortgage broker - to save time and hassle for a fee.

What are the different types of car buying services?

A variety of car buying services exist, each with their own pros and cons.

Lets look at each one in a little more detail.

• Auto brokers
  This is a full concierge service where you have a dedicated person working for you to handle the entire process. This makes it one of the easiest options, but also one of the most expensive.
  
  Auto brokers have a variety of business models which range from charging the consumer directly to passing on the fee to the dealer (in which case you are still paying it in the form of a higher sale price). Some dealerships are unwilling to work with brokers, so you may not have the largest number of dealers participating in your deal.
• Affinity Programs
  Any sort of car buying program offered to "members only" can be thought of as an affinity program. These are common at large companies as well as various organizations like USAA, Costco, and American Express.
  
  While many companies offer affinity services, most of them are run by the same few companies underneath. For example, Zag.com runs a large number of affinity programs for groups like USAA and American Express, allowing them to "white label" or put their own branding on top of it.
  
  These programs are typically free for buyers, but don't offer the best prices or the same level of hand-holding as a full car buying service. The fee taken by the affinity group (usually around $300) is passed on to the consumer in the form of a higher purchase price. Finally, the "instant price quotes" don't always refer to an actual car sitting on a lot - and are something in between a lead and a real offer.
• CarsDirect
  CarsDirect takes a mass-market approach to brokering auto deals. The process is typically very easy for the consumer with phone support and someone to walk you through the entire process. They offer a "high touch" model powered largely by phones and massive call centers.
  
  However, several factors contribute to higher prices on CarsDirect deals. First, there are a limited number of dealers they work with, so you may not get the most competitive offers from dealers. Second, their fee is also passed on to the dealer which means you'll pay it in the form of a higher purchase price.
  
  CarsDirect offers a model that is very easy for consumers but results in less than optimal pricing.
• CarWoo!
  At CarWoo! we've tried to combine the best of the programs offered above with a lower cost to consumers (we don't charge dealers), a hassle-free experience, and the best pricing available from any car buying service.
  
  Our competitive prices come from the fact that we have more dealers participating in each deal (again, we don't charge them so they have no reason not to participate), and our web interface allows dealers to see all other offers the consumer has received. In general, CarWoo! takes a more technology focused approach compared to the offerings above, with a world class web interface for viewing offers and negotiating terms online.
  
  We still offer first class support by phone when consumers need it, but we find the web to be the best starting place for creating an efficient market of buyers and sellers.

Whichever car buying service seems right for you, hopefully this article has helped break down the options out there.

If you're in the market to buy a new car, we'd love to earn your business. To give CarWoo! a try, just click one of the buttons below.