[AMA] Im a Luxury Car Broker and Financier - Ask Me Anything

LCollectingCorner on 06/06/2018 - 10:59
Last edited 25/02/2019 - 18:11 by 2 other users

Hey All,
Im a mostly-retired motor vehicle broker with extensive experience in brokering new cars, negotiating and structuring finance.

Im fortunate to have a diverse background from dealer sales, corporate sales, finance, product management, and I am happy to share my knowledge, advise on any deals (this is ozbargain after all!) as im passionate about cars and the industry as a whole.

Ask me anything you like.

im not associated with any brand or broker or store.

EDIT - thanks for the interest and your questions - hope the ozb community is finding it interest. Just a reminder to please check the thread first and see whether the question may have already been answered earlier

Introduce Yourself

closed Comments

    • CollectingCorner on 06/06/2018 - 14:48
      +8

      i take a fixed fee for brokering the sale, independent to the dealership - some customers want to pay the dealer the full amount and in that case the dealer pays my fee once they receive the total funds. Basically, I bring the buyer and seller together, this is old school approach though, and many dont work this way and instead are back door deals between broker and dealer.

      for transparancy, as an example for cars between $80-150k, my fee is $800

      • cloudy on 06/06/2018 - 14:55
        +1

        Ah ok, interesting.

        Since you structure financing as well, do you have some sort of financial relationship with the banks as well, assuming it is the banks who is providing the money, I know there are also other organisations.

        • CollectingCorner on 06/06/2018 - 15:10

          I used to operate as a finance broker under a major brands' AFSL but i no longer do that - i now just broker an acceptable and competitive rate of finance and terms for the buyer on best efforts.

  • Illian on 06/06/2018 - 17:49

    I have plans to buy a new car next year and I have zero interest in 'negotiating', I'm strongly considering hiring a broker after doing the test driving, so I have a couple questions.
    Dealers have shit taste, does it make any difference to the process if the car is a custom order?
    We're not planning on finance, does it make any difference if it's paid for in cash?
    I'm most interested in Lexus, the very top end, LC and LS, I can't imagine there's much negotiating room for those cars, and I don't know if dealerships would have limited slots for them which could interfere with getting a custom order. There's one near me with the same 2 LC's on the lot for the past 6 months, I know they'd rather sell one of those. Any thoughts? Thanks in advance!

  • CollectingCorner on 06/06/2018 - 18:03
    +3

    there is less movement a customer order - better to buy something in stock or in the country at least, as there will be dealership finance owing on it and therefore more desire to move the car. but if you cant find what you want you just need to negotiate the best you can on a build car as if you have deal breakers and settle for a car, only you will know if you will regret it. most people dont regret getting exactly what they want, many regret settling…

    they would definately rather sell those on the lot due to my earlier point - it just depends if you are happy with the spec of those.

    if you're paying cash tell them that upfront, less complications in the sale = easier/lower risk sale = generally better pricing

    there is definately movement in LS and LC cars - contact me via DM id be happy to help

    • Mitch889 on 11/06/2018 - 18:06

      "most people dont regret getting exactly what they want, many regret settling…"

      Very true. When you're talking this much money, settling is a bad idea.

  • decryption on 07/06/2018 - 08:14

    I’ve never been in the market for a luxury car, but my have my eye on a BMW i3. The RRP for the model I’m after is ~$72k. My question is, because this model isn’t a big seller (electric), is a large discount feasible? Something in the 20-30% range? And would using BMW’s own finance help? would a broker be a big help here?

    • CollectingCorner on 07/06/2018 - 08:44

      Yes, a good discount is available but not to the level you mentioned, 15% achievable perhaps a couple of percent more.
      PM me if you want assistance, yes with BMW id recommend using a broker, relationships go a long way in this brand.

      I rate the i3 BTW - had one as a loaner a while back - excellent town car.

    • blurrybird on 11/06/2018 - 19:52

      I thought they stopped making those. an i3 at $61k would be nice. Looks a bit.. shit.. and not fiance approved tho.. but electric!

  • paulf on 07/06/2018 - 10:55
    +1

    Hi
    If all goes to plan, i will be in a position to buy my first luxury car at the end of the year.
    I am looking for a bit of luxury + a bit of performance when needed.
    It will be a cash buy and I am looking at the likes of BMW M5 or Mercedes 63 ( sedan or even the new SUV) not so sure about Audi's and don't like Lexus designs - Porsche seem comparatively expensive.
    I know i won't use all of the tech these have in them.
    Limited dealers here in SA and happy to go interstate.

    Any thoughts??

    • CollectingCorner on 07/06/2018 - 15:36
      +2

      You are looking at a lot of luxury and performance (and comfort) with those cars.
      If it is to be a sedan or SUV then I would steer you to e63 and m5.
      I would also not buy of these cars in SA, I can help you out of Vic with delivery to you in SA or drive it back

  • pablomoon on 07/06/2018 - 13:15

    Hi there,
    Where do you think the sweet spot is in buying a second hand car for value and reliability Say around the five year/100km mark?

    • WhyAmICommenting on 07/06/2018 - 14:24

      That's just when you lose warranty on most cars. Surely 3 or 4 years is safer if the transmission goes or similar.

      • bad hombre on 07/06/2018 - 15:03

        Thought these days something major to happen would be rare and if it does wouldn't a statutory warranty apply?

        • daleyboy79 on 07/06/2018 - 15:28

          i agree … anyone paying to get a major fault fixed on a car less than 5 yrs old is crazy.
          Heck i reckon you could even get 7-10yrs (with regular servicing etc) for most major parts under ACL, depending on how much it cost

    • CollectingCorner on 07/06/2018 - 15:30
      +2

      I like the 2 or 3 year mark when the car is close to 30-40kms and due for tyres, maybe some brakes, as you typically are then buying something relatively maintenance free, relatively new, and current shape. Fact 8s most cars are so good these days that cars at that age barely feel any different to new. Only risk is catastrophic failure of something but that is rare at that age.

      • pablomoon on 07/06/2018 - 21:49

        Thanks for the response - much appreciated

  • bad hombre on 07/06/2018 - 14:47

    Currently lots of deals from Audi/MB/BMW for new cars delivered before June 30 get the equivalent GST discount. Who pays for these discounts? Dealer or manufacturer? Thanks!

    • CollectingCorner on 07/06/2018 - 15:28
      +1

      Australian head office of the brand via incentives from manufacturer

  • Curiouscat on 07/06/2018 - 16:31

    Would you recommend a new Hyundai Ascent Sport version currently in market for around $15.5k or may be another car which is used but offers better value than Hyundai.

    Not particularly fussy about getting new car only.

    • CollectingCorner on 07/06/2018 - 19:11

      Unfortunately i havent sold any of these so wouldn't want to guide you astray - discount is currently 6% off RRP though which isnt bad - you can probably achieve $15k flat DA but again will need to go through the buying process to truly give you a proper indication.

  • bad hombre on 07/06/2018 - 19:25
    +9

    Seems like there is a lot of interest from the community on this topic. Thanks for sharing your knowledge - very much appreciated!

    • CollectingCorner on 07/06/2018 - 19:51
      +4

      no worries, glad to see people are finding it useful - its a lot more work than i expected - i thought there would only be a couple of questions a day lol!

      i probably cant keep going at this pace but i will do my best to respond promptly

  • [Deactivated] on 07/06/2018 - 19:34
    +2

    What does a car broker actually do? Is it similar to a broker when going for a home loan? Do people need to go through a broker to secure those limited release vehicles? I didn't know car brokers existed!

    • CollectingCorner on 07/06/2018 - 19:51
      +1

      Yes, its not that different to a home loan - they help the buyer and the seller reach an agreed price for a car, where both walk away with a win. Buyer in terms of a discount they could not negotiate on their own, and seller in terms of another number on the board and some profit (sometimes).

      Buying a car is often a frustrating and difficult process for many people, its largely their 2nd largest purchase they will make, its emotional for many, and many dont have the skills to adequately negotation. Plus i see far too many people taken advantage of..

      on the exclusive cars point - No, anyone can go and try and buy a limited release car, but most that buy them dont have the time or the desire to run around to dealerships trying to secure one. Austrlaian Dealers also dont want to 'waste' allocations of limited cars on someone who subsequently pulls out of the build, so they actually qualify closely on these sales. A broker with an established relationship with the dealership can make the difference on these sometimes…

      • [Deactivated] on 07/06/2018 - 20:00
        +4

        Interesting! I learnt more from this than I did studying the whole day haha

        Thank you for your time!

  • ilsan0 on 07/06/2018 - 19:36

    Real life scenario - My rich boss wants this but the stingy grub only wants to pay $550k.
    Can you make it happen and reward you and me both?

    https://www.carsales.com.au/dealer/details/Ferrari-488-Spide…

    • CollectingCorner on 07/06/2018 - 19:45

      Can try - not on this one though i suspect - will he consider any sub 10,000kms 488 or just specifically this one?
      Direct message me woudl be better

      • ilsan0 on 07/06/2018 - 19:48

        PM sent. What about my poor car below. Tell me I did ok please…

  • ilsan0 on 07/06/2018 - 19:43
    +1

    On a side note, I paid $66.5k for this.
    Did I do well?

    https://www.lexus.com.au/models/build-and-price/IS/IS-300h/F…

    • CollectingCorner on 07/06/2018 - 19:52

      yes - extraordinarily well. well done particularly as its the hybrid

      • ilsan0 on 07/06/2018 - 20:06

        cheers thanks. And guess what I bought it over the phone. Didnt even walk in :)
        This is my 3rd car I bought over the phone.

        • CollectingCorner on 07/06/2018 - 20:16
          +2

          well done - my record over the phone is about 20 minutes on a bmw M760i..

    • kenneth88 on 07/06/2018 - 20:08

      thats 20% off rrp, well neg! mind to share which dealer you got this from? any trade-in as well?

      • ilsan0 on 07/06/2018 - 20:09

        No trade in. Dealer was in Sydney.
        Thats all I can say else I was told I would be killed :)

      • CollectingCorner on 07/06/2018 - 20:20
        +1

        ken FYI these have more willingness from dealers for movement than RX's

        • ilsan0 on 07/06/2018 - 20:32

          Any reason why?

        • CollectingCorner on 07/06/2018 - 21:30

          @Elektrikrevamp: generally supply and demand dynamics, mid car sedan segment is extremely competitive at the moment between all marques - leads to more incentives and more discounting

  • skywards on 07/06/2018 - 20:07

    Can you recommend me a new/newish car, budget around the $20k-$30k. I am looking to buy a medium size or sedan to drive for the next 10-15 years, can you recommend reliable brands and brands to steer clear of?

    I am in Brisbane if location makes any difference.

    • CollectingCorner on 07/06/2018 - 20:17
      +2

      Mazda 3, Kia Cerrato (7 year warranty)

      • dynamite on 11/06/2018 - 00:52

        How would a Honda Civic stack up with those 2?

        • buckster on 11/06/2018 - 15:56

          Honda is synonymous with disappointment nowadays

        • CollectingCorner on 11/06/2018 - 17:40
          +1

          @buckster: sort of agree, those 2 cars are really leading that segment these days, the new cerrato is getting excellent reviews also

        • dynamite on 12/06/2018 - 15:28

          @altinvestor, @buckster: I've heard good things about the 10th gen Honda Civics, but I suppose they still aren't up to scratch to compete..?

  • peanut48 on 07/06/2018 - 20:38

    I'd love to buy a BMW hard top convertible because I want a convertible (not soft top), what do you think is the best model and what's the price point I'd be looking at? I drive a 18 months old Mitsubishi ASX (under finance). Thanks!

    • CollectingCorner on 07/06/2018 - 21:27

      depends what you value - if you want performance the 440i convertible is great (so is the M4 for that matter), but the pick of the bunch is often the 430i - well optioned as standard, good performance etc.
      confident i could achieve 15% off RRP for you at minimum.

    • ChatCPT on 08/06/2018 - 11:53

      Z4

      • CollectingCorner on 08/06/2018 - 14:53

        yes, depends if OP wants 2 seater or not, and new Z4 around the corner (next year)

        • Ti-au on 11/06/2018 - 16:29

          2 seaters would sux on the re-sell value.

  • smuggler on 07/06/2018 - 21:13

    My friend's father owns a Mercedes S350 and S560 (or is it S540, the hybrid one with the plug and charge). Wife and him are both business owners. How much did they pay? They're the retail price sort of people. One is a doctor too.

    I feel like a bum when I travel inside it.

    • CollectingCorner on 07/06/2018 - 21:28

      about $330k for the 560 and about $230k for the S350…

  • aoeueoa on 07/06/2018 - 21:30
    +1

    How do dealers determine how much discount they will give on a car? How much they like the buyer? DOes it vary between different potential buyers? Will standing there haggling for a long time result in a lower price?

    Basically, how does the lay person haggle better?

    • CollectingCorner on 07/06/2018 - 21:36

      it has nothing to do with how much they like the buyer, it comes down to how well researched the buyer is and what levers they can pull. You and i for example could walk into the sam dealership the same day and achieve 2 very different results on the same car. the more time you spend in the dealership when you are in the process of buying, the less discount you are going to get.
      honestly, if its a big purchase for you and you're not sure what to do and arent used to negotiating, use a broker. you will get a far better result and save yourself time and heartache. yes it costs money, but they save you far more than they cost you in all but very few situations in my experience.

      the amount of poeple i see buying in dealerships at close to RRP still amazes me to this day.

  • DiscoJango on 07/06/2018 - 21:42

    i want a mint 1964 lincoln continental convertable black exterior and interior please help.

    • CollectingCorner on 07/06/2018 - 21:45

      can you find me one too :)
      unfortunately used muscle like that is not my specialty but i can put you in touch with someone that might be able to help

  • NejiXSan on 07/06/2018 - 22:38
    -1

    Hi
    Currently looking to buy a new 2018 prado VX with front nudge bar and back tow. What's a good price to negotiate for this?
    Thanks for your time!

    • CollectingCorner on 08/06/2018 - 15:16

      Dont have any recent examples on a Prado sorry - id need to look into it further with those options

    • Amour on 10/06/2018 - 00:30

      We are looking at the same car. There is a list of prices on Prado Point that show what people paid, including what extras are included.

  • djmm on 07/06/2018 - 23:08
    +2

    Why BMW X6 drivers never use their blinkers?

    • CollectingCorner on 08/06/2018 - 08:20
      +11

      there is a direct linear relationship between the amount indicator usage vs the cost of the car….

    • smuggler on 08/06/2018 - 20:47

      Because they're usually driven my small people who rely on GPS and lane assist.

  • Jayjay93 on 07/06/2018 - 23:14

    Hi there,

    First thanks for taking time for replying to all of our questions :).

    Also have some question, looking to buy a car in few months.

    Do you have any recommandation for medium SUV size for ~AUD $30k ?

    Also do you have any advice to negotiate discount with dealership ? Is there a best period to buy like now with EOFY ?

    Cheers !

  • Noblejoker on 07/06/2018 - 23:22

    Enjoyed reading all the Q&A thanks

    What's your recommendation for an SUV for a tall family?
    I am 6'5" and so are both my kids
    Happy to spend up to $50K odd (prefer $40K)
    FOr good value I would do used for that
    Example - what can I get a Tourag for etc
    Thanks

    • CollectingCorner on 08/06/2018 - 15:13

      Have a look at the VW tiguan - its pretty roomy for a mid sized SUV - also the kia sorrento.

      • Noblejoker on 09/06/2018 - 17:36

        Thanks mate
        Not enough legroom frint or back in a Tiguan - Tourag is the bomb (haven't driven)
        Never tried a sorento - will do

        • CollectingCorner on 09/06/2018 - 18:34

          Also cx9. Tourag is the goods but expensive

  • dvd107 on 07/06/2018 - 23:42

    What’s the best price you can get on a Volvo xc60?

    • CollectingCorner on 08/06/2018 - 15:14

      HI mate
      need more detail - what model, engine, options etc - all makes a difference

  • DKC on 07/06/2018 - 23:52

    Thank you for your AMA and info. When you're fully retired, how do we find a good broker like you? There are a few car-buying companies around. Do they offer the same level of service?

    • CollectingCorner on 08/06/2018 - 14:51
      +1

      there are not many old school brokers around - not many last in the game and now with the car buying services, many have had enough and retired or are doing somethinf else. Just FYI many car buying services are owned by some major auto players, and there is a lot of slight of hand that goes on… i wouldnt touch them personally.

      im still around so for now…

  • BartholemewH on 08/06/2018 - 01:21

    Interested in any tips on the Audi SQ7 and the current pricing for a colleague. Coming out of '16 Range Rover Sport SDV6SE. Company purchase. Thanks.

    • CollectingCorner on 08/06/2018 - 16:01

      will need to do some work on it to truly understand its price point, but circa $170k - do you work for a corporate? (it will help)

  • sena86 on 08/06/2018 - 09:22
    +1

    Thanks for conducting this interesting AMA.

    I'm interested to ask how does one become a luxury car broker? I've negotiated a number of cars over the years for family and friends and quite interested in doing this in a more official capacity. What steps does one need to take? And would you recommend this line of work?

    Cheers

    • Ekliptix on 08/06/2018 - 13:07

      I was going to ask this too. Interested in what qualifications and experience you have as well as how you got into doing this for a living.

      Most interesting AMA I’ve seen for a while, thanks for contributing.

    • CollectingCorner on 08/06/2018 - 14:48
      +2

      to be honest i dont think its for everyone - i would only recommend it if you have good relationships in the auto industry and enjoy sales. you also need to have a solid financial background. There are no official qualifications apart from running your own business, but i would recommend working in a dealership environment before even thinking about doing it, otherwise you just wont build the knowledge you need to operate successfully

  • ExpressCoffee on 08/06/2018 - 09:48

    Do you have any advice/experience with Salary Sacrificing for a new car?

    Currently saving for wedding and building of new house and am planning to get a new car in 2-3 years.
    Keen on a Golf R and can get it through SS, but is it a good option? I don't see myself having a spare 60k around..

    • CollectingCorner on 08/06/2018 - 14:45

      almost always salary sacrificing is the most expensive way to purchase, unless you are doing a huge number of kilometers or get an FBT exemption in your occupation. I would recommend a lease if you need to finance and budgeting your maintenance costs and putting that money aside also each month - will work out cheaper in terms of total spend than a comparative salary sacrifice arrangement.

      • DeadlySaber on 08/06/2018 - 15:26

        Isn't it salary sacrificing is the same as novated lease? Based on my research, novated lease can be a very good option to buy a new car eg: GST free, pre-tax salary…what is your input on this?

        • CollectingCorner on 08/06/2018 - 15:57

          yes salary sacrificing is a novated lease. For the reasons above i dont think its a good option - the FBT consideration kills it for most people.

        • justwii on 08/06/2018 - 16:04

          Had done that before myself. You can't just look at the saving part, there are the out of your pocket part too. Normally it is for people doing 30000km up each year. You drive any less than that then the saving is so slim or even cost you more.

      • Maverickindi83 on 10/06/2018 - 09:48

        So for a salaried employee , how does one enter into a lease agreement ? Through the manufacturer e.g. BMW financial services ? I was looking to buy a used x5 2014, f15, 3 litre engine for ~55k and put it through my company lease. The calls from them are pretty criptic though. Not sure who is paying for fbt though! How much do you reckon a new/demo x5 would be discounted for in case I buy a newish from dealer ?

        • CollectingCorner on 10/06/2018 - 10:14

          when you say company lease i assume its just a car allowance you are provided? in that case you simply take out finance from a 3rd party or dealer finance.
          if you are talking about salary sacrifice or company lease benefits, then its a 3 way arrangement between your employeer, the finance company and you. Effectively you finance from the finance company but your employer handles the payments etc pre tax for you. you are paying the FBT with an FBT employee contribution that gets added by the finance company.

          A new x5 30d would run at about 100k at the moment

        • Maverickindi83 on 10/06/2018 - 10:29

          @altinvestor: thanks a lot for your prompt reply. I am talking about salary sacrifice, yes the fbt is payable by me , post tax which is what I guess you are suggesting makes the deal unattractive ? On paper somehow the salary sacrifice looks attractive. Of course I am missing something in this picture !

        • CollectingCorner on 10/06/2018 - 10:34

          @Maverickindi83:

          all it comes down to is the following:

          1.how much less are you getting in your payslip than before
          - times this amount by the monthly payments to get a total
          2.what is the residual/balloon at the end of the period
          3. what are the max kms you can do under the agreement per year

          then compare that to if you just leased your car yourself and what you would be out of pocket for the above
          its best taking this into account not calculating maintenance items in the lease like tyres, brakes, servicing to get a true comparison - if its cheaper one of the above ways without those items, that will still be true after those items are added

  • tik tok on 08/06/2018 - 09:57

    Do you deal with clients in Darwin ? I am surprised to see Maseratis a dime a dozen in this hick town - no idea where they get such money from.

    • CollectingCorner on 08/06/2018 - 14:43

      ive sold some cars to people in NT - fair bit of mining money and big farm owners up there.

      • tik tok on 08/06/2018 - 15:39

        There are some very very well maintained vintage cars up here. I'd never heard of car cocoon till I came to Darwin. Out of curiosity, what sort of cars have you sold up here ?

  • nurbsenvi on 08/06/2018 - 10:18

    Does the 12-15% discount benchmark apply to used car as well?

    Been looking to buy 2017 A5 Quattro sportsback
    Seems to be hovering around low to mid 70k mark

    So low 60k will be a good target?

    Thank you for AMA by the way.

    • rave75 on 08/06/2018 - 11:23
      +1

      i know for sure you can get 20% with Audi. A friend did with A4.

      • CollectingCorner on 08/06/2018 - 14:39
        +1

        yes, in certain Audi models like volume sellers such as A3 and A4 you can, but it varies car to car and month to month.
        The A5 is still relatively new, i dont think 20% will be available at this stage, 15% will be however. also depends on options, s-line etc.

      • nurbsenvi on 08/06/2018 - 15:28

        One thing I’m afraid of with Audi is depreciation
        It drops like it’s hot.

        • CollectingCorner on 08/06/2018 - 15:54
          +2

          I feel that all cars do these days, so much competition in every segment from multiple brands

      • Tightpocket on 11/06/2018 - 17:18

        Not just 20%, it could be more if you know the market price or if you are lucky enough as my friend bought his Audi TT 2017 a year ago for $65K - mind you the sticker price was $99K and the car was brand new and the same year model.
        I was there witnessing this whole deal went down, my friend did his homework, rang a couple store before finally jumping into the dealer that actually has the stock.
        At first the dealer was adamant and said nah, we can't go lower than 85K, my friend showed a couple of other dealer already willing to sell the same model for 75K..so down to 75 - next step he actually low balled the dealer and lied…yes he LIED, he said he is currently in "negotiation" stage with other Audi dealer for the same car just different color.. so I don't know how he did it then this dealer said alright, you are gonna walk out here with a car I promise you that…ended up with 65K, the dealer never once check his credibility, didn't ring other Audi dealer to confirm, he was just ok I believe you.

        Negotiating time was 2.5 hours, funnily enough this was done after the EOFY period so no particular sale or promotion - it just happened he was there at the right time, right place and right circumstances I believe. so that was 35% off the ticket price.

        So after witnessing this deal, I find it hard to accept anything less than 20% off the ticket price.

  • riyazsha on 08/06/2018 - 10:30

    I like Toyota Camry car which is more reliable, now I am looking for 7 seater car. Kluger is expensive and not interested in spending too much money on car so I am thinking about Outlander. What is your thought about Mitsubishi Outlander.

    • CollectingCorner on 08/06/2018 - 14:40

      Sorry i cant be more helpful on this one but i dont know too much about the outlander so im not the best person for this one. maybe someone from the community can jump in?

  • phoney on 08/06/2018 - 11:09

    Hi, thanks for your time, I did not know there were such a thing as car brokers!

    I was actually looking to buy a new car in the next couple months and hate the negotiating process so going with a broker is definitely in my interest.

    I'm currently thinking of getting a Mercedes C300 sedan. If I could just ask a couple quick questions:
    1. How much would I be expecting to pay for a new C300 if I went with a broker? (I live in ACT with no finance needed if that matters)
    2. Do brokers also deal with used/demo cars? I'd be happy with a 2016/17 model with low km.

    • CollectingCorner on 08/06/2018 - 14:42

      Hi, more than happy to help you so please DM me when you are ready to buy.
      C300 sedan is achievable at 15% off, but id need to do some further work as the facelifted model is about to drop which will change the pricing dynanmics.

      i dont typically deal in used, there are far more variables to consider. where i do used, i charge based on my time rather than fixed fee.

  • dr on 08/06/2018 - 13:41
    +1

    How much do you charge for your service? Is it fixed fee, or percentage based…

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