The three ways brokers get paid
A fee you pay. You agree to a flat amount for the service, it is written down, and the car price stays a separate line. This is the easiest arrangement to audit, because you can see what you paid for the car and what you paid for help.
A fee the dealer pays. The selling dealer pays the broker for bringing a buyer, and you pay the dealer for the car and nothing to the broker directly. This is common and legal. The thing to check is whether the price of the car is still competitive.
A mix of the two. Some brokers charge a smaller fee to you and also collect from the store. Ask for both numbers, not one of them.
What is not acceptable: a fee that floats with the size of the deal and never appears in writing, or a fee buried inside the car price so you cannot tell the two apart.
What California requires
California treats brokering as its own licensed activity. A broker must hold a DMV autobroker license, and before it collects a fee from you there has to be a written brokering agreement that identifies the vehicle, states the fee, and makes clear the broker is not the seller.
That agreement also covers what happens if the deal does not happen. A fee collected up front is generally refundable if the vehicle is not delivered on the terms you agreed to. Read it before you pay anything, and keep a copy. A broker who would rather you not read the agreement has told you something useful.
You can check any broker or dealer license yourself through the DMV occupational license status lookup. Ours is CA DMV Autobroker License #72394.
How to tell the total price, no matter who pays the broker
Ask for these lines in writing, then add them up. This works at a store or through a broker:
- The selling price of the car, before any rebate, discount or cost reduction
- Every fee on the contract: doc fee, acquisition fee, registration, title and tax
- Every product or accessory installed on the car, and whether each one is optional
- Any broker fee, as its own line, with who it is paid to
- On a lease: the money factor, the residual, the term, the miles, and due at signing split into pieces
- On a loan: the amount financed, the rate, the term and the total of payments
Why the monthly payment is the wrong number to compare
Two deals with an identical monthly payment can be thousands apart over the term. A longer loan, a bigger amount due at signing, a marked up money factor or a protection package you did not ask for can all hide inside the same payment.
Compare the total: the price of the car, every fee, and what you hand over on day one. Then compare the service separately. That is the only way a broker fee can be judged fairly, because you can see what the help cost and what it bought.
What to ask any broker
Seven questions. A straight broker answers all of them without a pause:
- Are you licensed by the California DMV, and what is your license number?
- How do you get paid on my deal, and who pays you?
- Is your fee flat, or does it change with the car or the price?
- Will I see the full contract, including every fee and add on, before I sign?
- Who is the selling dealer, and am I signing with them?
- What happens to my fee if the car is never delivered, or if I walk away?
- Are you paid more to put me in one car, or with one lender, than another?
Is a broker fee worth paying?
Only if the help is worth more than it costs. A broker earns a fee by making several stores compete on the same car in writing, by catching fees and add ons you would otherwise have signed, and by giving you back a week of Saturdays. A broker does not earn a fee by making one phone call to the nearest store.
Judge it the way you judge any service. Ask what you get, ask what it costs, and compare the all in number with the best offer you can get on your own. Sometimes a store's own special wins, and a straight broker will say so rather than charge you to match it.
Our fee is disclosed in writing, as its own line, before you commit to anything. This page lists no amount, because the right amount depends on what you need and because a number on a web page is not a quote. Ask us and you get it in writing.
Green Light Auto Broker is an autobroker. All new cars arranged for sale are subject to price and availability from the selling franchised new car dealer.
Questions
How much does an auto broker cost?
It depends on the broker and on the work. Some charge you a flat fee, some are paid by the selling dealer, and some do both. What matters is that the amount and who pays it are in writing before you commit. Ask us for ours on your car and we will put it in writing.
Who pays the auto broker, me or the dealer?
Either, and sometimes both. A dealer paid fee means you pay the broker nothing directly. A fee you pay keeps the car price and the service price on separate lines. Neither is automatically better, so ask which one applies and check the total price of the car in both cases.
Do brokers hide their fee in the price of the car?
A straight one does not. The fee belongs on its own line, and you should be able to read the selling price, every dealer fee, every add on and the broker fee separately. If anyone will not break it out, that is your answer.
Is it legal for a dealer to pay a broker in California?
Yes. Brokering is a licensed activity in California and dealer paid arrangements are common. The broker still has to hold a DMV autobroker license and still has to disclose what it is doing and who pays it.
Can I get a broker fee back if the deal falls apart?
Your written brokering agreement should say exactly what happens if the car is not delivered on the terms you agreed to, and a fee taken up front is generally refundable in that case. Get the agreement in writing before you pay anything.
What is the least expensive way to buy a car, with or without a broker?
The least expensive version is the smallest total price on the exact car you want, from whichever store will actually do it, with no add ons you did not ask for. A broker is worth paying when it gets you to that number faster than you could alone, and not when it does not.
Related: How an auto broker works in California, Dealership or auto broker, Auto broker in Southern California, How it works, FAQ, Get started. Text (714) 471-8775 or request a quote.
Brand and dealer names appear only to describe what a shopper may be comparing; they are trademarks of their owners. Green Light Auto Broker is an independent licensed California auto broker (CA DMV Autobroker License #72394), not a dealership.