Apologies if this had been discussed before but why is there such animosity towards the broker model on Reddit?
I get that savvy customers with time and info can hack their own deals but for many who don’t, brokers are great. I read comments from dealer sales managers (if they actually are) who don’t like to work with brokers and some of what they are saying makes sense but if it were all true, there would be no need for brokers.
The last brokered lease I did, the salesperson was very positive about the broker I worked with. As a dealer, not sure why I wouldn’t want to work with a broker if they are bringing me vetted sales without me having to pay for the expense of an employee but I guess it depends on the structure of agreement. Seems like this would be like a referral program.
Undertandably, a saleperson would have issues because it’s competition for them but that’s the landscape for sales. I think this was discussed in that broker profit thread but I see more Cali brokers popping up and I’m gearing up for a new lease and it looks like I should be shopping brokers and not dealers. The dealership experience alone is not worth it to me.
Brokers posting aggressive deals conflicts with the salesmen that post there and try to convince people that a deal sold at MSRP is causing them to go bankrupt.
Essentially, they’re financially motivated to try to convince people that the broker model (or lease hacking in general) is all fake.
A better question to ask yourself is why wouldn’t your average salesman on there be against brokers?
The average automotive broker’s (think not leasehackr, local leasing company) goal is not usually to save the customer a lot of money, the model is mostly “how much can I get off the car, and of that, how much can I pocket?” for non-Hackr brokers. That’s fine, nothing wrong with making money in exchange for convenience, but most managers hate them because some of them make more on one car than most guys make in a week.
In theory, middlemen are incompatible with proper capitalism and their business model couldn’t exist. In theory, GMs could eliminate all business for brokers (both supply and demand) by offering all customers a fair deal right off the bat. There would be no bait & switch, no intentional time-wasting, no asymmetric information, no high-pressure sales tactics and no history of treating marginalized people even worse.
TLDR brokers exist because of the way the industry treats its customers.
Dealers can function as a cartel in a way when it comes to setting prices. When acting in concert they can also set territories and things of that nature. Dealers that discount and/or use brokers are sometimes looked down upon by those that don’t since they kind of throw a wrench into their plans. A dealer in Pennsylvania that discounts below MSRP is taking food off the table of a dealer in New Jersey that doesn’t. At the end of the day, your local dealer would much rather be the only name you think of regardless of price, have you pay sticker or worse and service your car with them exclusively. They aren’t really looking to compete with anyone, let alone brokers.
If everyone got the crazy deals you see on here, dealerships would go out of business and the only sales model would be direct, a la Tesla. Then you’d be at the whim of a megalomaniac for pricing.
For every crazy deal you see on here, there are 10 where the dealer is making his profit. That subsidizes the craziness on here.
Salespeople at the dealerships are paid next to nothing. Some states at least mandate a minimum wage minimum if commission doesn’t cover the state min. Some may still not have a min.
Experienced auto sales guys are making the same as lower paid physicians in many parts of the country. 250+. I’m sure there’s many that don’t but 100k still isn’t difficult if you’re dedicated and working at a store with good pay structures. The best ones can do over 500.
During Covid when everything was msrp they were banking. And the cars sold over msrp a lot of times they would make a few k commish off
They like broker deals not bc they make much off the sale, but the volume gets them to their bonuses.
All car salespeople aren’t pulling in 6 figures. Yes, you can find the top ones at a MB or Porsche dealer making that. But your run of the mill salesperson selling RAV4s or Tuscons is not making that. And the COVID era car market was a fluke and short-lived.
Most likely the avg salesperson is not making ~$800/deal like a broker.
LH is not representative of an industry that moves 15-18 million new units annually. The demand that exists for brokers outside LH, that mostly exists because of the way the industry treats its customers. That demand isn’t even for a unicorn type deal. It’s just to get something approaching “fair”
