Sourcing & Finance Broker - Q&A - TheBroker

I'm aware alot of you hold a certain amount of animosity towards brokers and also understand a reasonable amount of it is well founded, but some is not.

Thought I would give you all the opportunity to ask any questions you have of a Finance and Sourcing Broker (me) who runs a proper FCA regulated company (my company) and knows how things 'should' be done.

I know this has a chance of becoming a broker bashing thread, but I am thick skinned and so long as you keep it civil I'm happy to participate.

I'm particularly interested to know why many of you will immediately discount a broker who charges a fee for their services.

My tin hat is now on, but I'm not going to take cover (just yet).

Over to you...

TheBroker

Sourcing & Finance Broker - Q&A - RT

I'd only pay money direct to the car dealer, leaving the broker to sort out commission - that's to avoid getting into a legal situation I don't understand with a middleman - rather than any anathema to paying fees. I don't expect brokers to do things for nothing.

That's down to what I understand and what I don't - I'm quite happy for my investment discount broker to have moved away from commission income to management fee income - but that's an area I NOW understand well - it's also reaction to getting poor service from commission-based IFAs but that's going back a long way and the rules have changed drastically a couple of times since then.

Edited by RT on 28/02/2017 at 10:16

Sourcing & Finance Broker - Q&A - TheBroker

I'd only pay money direct to the car dealer, leaving the broker to sort out commission - that's to avoid getting into a legal situation I don't understand with a middleman - rather than any anathema to paying fees. I don't expect brokers to do things for nothing.

That's down to what I understand and what I don't - I'm quite happy for my investment discount broker to have moved away from commission income to management fee income - but that's an area I NOW understand well - it's also reaction to getting poor service from commission-based IFAs but that's going back a long way and the rules have changed drastically a couple of times since then.

I presume the circumstance here is with regards to sourcing rather than finance. Your comments make sense. In relation to sourcing, you may be surprised to know that some dealers are very limited to the amount of commission/referral fee and it can sometimes be rather minimal which is why brokers will charge a fee for their work which should still represent an overall saving to you (e.g. Car RRP = £15,000. Broker Sources for £13,500. Broker may get only £200 (inc VAT) referral fee and want to charge you a further £200 (inc VAT), that means you got the car for a saving of £1,300 overall).

Thus the broker has made perhaps 2.5% overall on the deal in which you saved 8.5% (but had he not been able to invoice you the £200 then he would have made only 1.3%.

As you reasonably say, you don't expect brokers to work for nothing, but for saving you potentially £,000's on a higher value vehicle they do need a cut to make it worth it when you take into account business overheads, wages, insurance, advertising, etc.

I hope this helps you to understand a little why sourcing brokers charge a fee.

The likes of CarWOW etc work slightly differently in that they will do so much volume that they will get what is called a volume related bonus from the manufacturer/dealer but decide not to pass that on to you so in fact will be making far more off a deal than a smaller independent broker with whom you can have a conversation. Plus chances are the CarWOW prices are the same as the independent if not worse (we often give better pricing that CarWOW) as independents have relationships with the supplying dealers allowing room for negotiation etc. whereas CarWOW et. al. just take orders, process them electronically and move on to the next number in line.

Sourcing & Finance Broker - Q&A - concrete

I found Carwow a complete waste of time. Uncompetitive and leaving me to trawl through the various dealers it puts in touch. Just a joke really. I have absolutely no animosity to brokers or any other person that know his field of trade and has expertise. My finacial advisor works on the same principal of getting me a good deal and part of the saving I wouldn't have otherwise made goes to him. Fair do's. I think people are simply afraid to ask the simple direct and obvious question of 'What's in it for you?' Most professionals are prepared to explain their position and justify costs, which are mostly modest and reasonable. Maybe working in construction for 50 years has made me a little hard nosed, but I find a direct question asked in a civil manner yields results. The finance agreements, like pensions and investements are all very complicated, unneccessarily so IMHO, so having an expert on your side is good advice. The hard part is picking one who is on your side, so go with recommendations or official trade body listings. But Caveat Emptor at all times. Homework is essential.

Cheers Concrete

Sourcing & Finance Broker - Q&A - TheBroker
I'm honestly surprised at the lack of hard questions etc. I often see comments berating brokers. People won't deal with them because they think they know better etc and don't want to pay for anything etc. But I have been proven, so far, wrong, which is refreshing.With regards to trade bodies, the likes of the BVRLA are helpful at a certain level but honestly nothing more than a profit making organisation charging the brokers etc huge fees to be members as the public perceive the members to be trustworthy. Trust me, this is not entirely true. Ultimately any decision made by the BVRLA is not enforcable upon its member, the worst that will happen is that they will lose membership. Our company is not a member of the BVRLA and it has never caused us any issues. We do however deal primarily B2B, although we have plenty of private and high net worth customers. Recommendations are worth much more than a BVRLA certificate. So yes, as per Concrete, pick one you can trust and ideally one recommended to you and one that you can speak to on the phone and meet with if you choose. There are lots of 'bedroom brokers' out there (although the FCA is weeding these out) who know nothing about the financial products they push and/or care very little about customer service etc.
Sourcing & Finance Broker - Q&A - Avant

It's very good of you to take the trouble to offer advice. But it could be more help to us if you or your firm were able to widen your remit, or at least make clear what you are and are not authorised to do.

I asked you a question about GAP insurance, but you told me 'I cannot give insurance advice'.

If you're a car sourcing broker and not an insurance broker, maybe you could make that clear. If I've made the wrong assumption, apologies.

Edited by Avant on 28/02/2017 at 16:58

Sourcing & Finance Broker - Q&A - TheBroker
Hi,
With regards to giving advise on here, as it is outside of a formal commercial arrangement or rather it's just opinion which is anonymous I have a somewhat freer remit, however when you contacted me directly for specific advise I then had to put my 'official Fca registered company hat on.
So for formal advise we cannot give insurance advice as we are not insurance brokers, we are finance brokers and sourcing brokers. But for anonymous advice on here I can let you know my opinions etc on gap insurance like the next person.
My area of expertise, to clarify is law (although for the same reason as insurance I cannot give formal legal advice) car finance, vehicle sourcing, as well as IT and management consultancy etc as a hangover from a career a fair while ago.

Oh and these floating ads are really annoying when typing on an iPhone as they obscure the page!
Sourcing & Finance Broker - Q&A - Ellis Romero

What is your website TheBroker?

Sourcing & Finance Broker - Q&A - nailit

Hmm, bit late to point out but...

"as well as IT and management consultancy etc as a hangover from a career a fair while ago.
Oh and these floating ads are really annoying when typing on an iPhone as they obscure the page! "

Seems strange he/she couldn't sort out the annoying ads? given the experience provided.

 

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