2018-04-17 09:39:12
Wheels: Professionals Make Car Buying Easy, but You Have to Shop Around

Jeffry Melnick didn’t want the hassle and anxiety of shopping for a car when he set out to buy one last year.

“When they say to me, ‘Do you want to look under the hood?’ No,” Mr. Melnick said. “No, I don’t.”

So he hired someone to do his haggling for him.

Mr. Melnick, a semiretired theatrical agent who lives in Palm Springs, Calif., called Authority Auto, a car-buying service based in Tarzana, and told it what he wanted — and what he wanted to pay.

Mr. Melnick favored a Mercedes-Benz GLE in Polar White with a modest option list that would keep the sport-utility vehicle in his price range. Although a dealer had told him that what he wanted wasn’t available in white, the negotiator got Mr. Melnick the GLE he was after — in white — with more options than he thought his budget would allow.

“It’s very tricked out,” Mr. Melnick said. “I don’t like car shopping, but I do like gadgets.”

Authority Auto is owned by Oren Weintraub, one of a small fraternity of negotiators who make a living doing exactly what most car buyers dread. Negotiators claim that their services protect consumers from unscrupulous dealers, save time and most of all save money on cars both new and used, whether bought or leased.

Mr. Weintraub has periodically accepted a public challenge to prove his worth. In August, the syndicated TV program “Money Talks News” pitted him against the financial services company USAA (a partner of the buying service TrueCar) and the show’s host to buy a Mercedes that listed for more than $46,000. Mr. Weintraub’s total discount of more than $7,200 beat the next best deal by more than $2,000.

But finding a negotiator can be tricky. There is no standard name for these services — some call themselves a buying service, others a negotiating service, some a broker, still others a concierge. Each seems to operate in its own way.

Mr. Weintraub, a former car salesman, said he worked with buyers from start to finish. He will help them choose a car and negotiate the sales price, finance rate, and aftermarket products like service contacts and wheel and paint protection. He works nationwide and charges $600 to $1,500, depending on the cost of the car. For an additional $300 he will also sell the client’s old car.

Mike Rabkin of From Car to Finish in Rockville, Md., does less initial consulting. Clients fill out an online order form for the model, color and options they want. Mr. Rabkin then has dealers bid for their business. Negotiating financing and aftermarket products is left to the client. He charges $250.

Greg Macke, who calls himself “Your Car Angel,” helps clients pick a car, arranges a test drive, negotiates the purchase and accompanies the buyer to a dealership. He even inspects used cars. But he accepts only clients who live near Los Angeles for his $750 service.

“The key to inspections is laying eyes on the car,” he said.

Paul Maloney is a New York-based former fleet director with an Australian accent and a snappy line of patter. He calls his business the Car Leasing Concierge, although he handles new-car sales as well. He sends clients to a dealership with a free work sheet, then, for a fee, he will assess the deal to see if he can beat it. His is a tiered service that tops out with his assessing your deal and handling your purchase for $297.

You might think dealerships tremble at their approach, but the negotiators — who said they helped with between 125 and 1,000 purchases a year — say that is not the case.

“We buy so much merchandise from them that we are an asset to them,” said Greg Pence, manager of car-buying services for AAA Carolinas, whose in-house service buys about 1,200 cars a year. He said dealerships liked that the professional negotiators closed deals quickly, “usually within a good 30 minutes or so.”

The negotiators compete with services like TrueCar, which don’t charge the consumer but do charge the dealers — who may pass the cost on to the consumer.

Michael S. Freeman II, the executive manager of Sunset Chevrolet Buick GMC in Sarasota, Fla., said the average profit on a car was 2 percent. On a $30,000 car that would be $600. TrueCar, he said, charges a fee of $300 for each new car sold on a referral.

“When we get someone from TrueCar, we have to cut a check,” Mr. Freeman said. “That is factored into the price.”

TrueCar is the technology behind 500 buying services, like those of publications like Car & Driver and U.S. News and World Report, and companies like USAA and Sam’s Club. The dealers get their referrals from TrueCar, which displays prices from its member dealerships and allows prospective buyers to compare the out-the-door cost for the vehicle they want. That eliminates haggling — for better or worse.

The details of how a dealer reaches the price that TrueCar displays are complex, said Veronica Cardenas, a spokeswoman for TrueCar, but “it’s not a race to the bottom.” She added, “The idea is you are getting a competitive price.”

There are competitors that charge dealerships a modest monthly fee, such as Costco and CarGurus, which dealers said gave them more room to discount. (Sometimes, getting the very best deal comes from buying at just the right time. Dealers receive bonuses based on sale quotas, meaning they might give bigger discounts if they’re trying to hit a benchmark. On the other hand, that means dealers might not know how profitable a deal is for them until well after a sale agreement is signed.)

Several negotiators warned that competitors took money from dealerships and colluded on deals. The negotiation industry isn’t regulated, nor is it represented by a trade group. Customers have to make a best guess using online reviews to determine if a buying service is a good fit, and that information can be ambiguous.

Take, for instance, Mr. Rabkin, who has a spotless A-plus rating from the Better Business Bureau. There are two reviews on Angie’s List for 2017, an A and a B grade, and he has a slew of overwhelmingly positive testimonials on LinkedIn and Yelp. But the most recent of those testimonials are dated 2015. Mr. Rabkin pointed out he had no control over when people reviewed his service online.

Hiring a pro buyer is likely to save you money, but not more than you can save yourself, said Ira Rheingold, executive director of the National Association of Consumer Advocates, a trade group of consumer lawyers.

“There is enough information out there today that you don’t have to be the most sophisticated buyer to know what the real cost should be,” he said. “You don’t need a buying service unless you are intimidated by the process, and there are those people.”

For people who are anxious about car buying, or whose time is too valuable to spend it bargaining over a sticker price, a buying service can be worthwhile. But there are also buyers who hire a professional negotiator because they aim to bully every last nickel out of a dealership. Because of the nature of industry incentives, though, they can never really know if they achieved that goal.

“Those people,” Mr. Rheingold said, “need to get a life.”