# can someone explain to me how lease brokers work?



## LI E90 (Apr 9, 2007)

So I am in the early stages of shopping for a replacement for my car. I started emailing a few dealers for quotes just to see the current landscape..

The other day I came across an ad online for an auto broker, the claim was that they could get any make model etc....

I made sure i was 100% comparing the exact same vechicles.. MSRP's options, colors etc..

The broker beat every dealers best deal by over $30 a month and the lease is through BMWFS..

how can this be possible? how does the broker make any money? Should I care that my next car was not leased in a dealership, I have only leased from dealers for the past 16 years...


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## New Motors (Mar 24, 2008)

Prepare for the bump.


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## flowbmw (Aug 31, 2006)

as far as I know, BMWFS isn't going to work with a non-BMW dealer...

be *extremely* careful

Ed


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## SARAFIL (Feb 19, 2003)

LI E90 said:


> So I am in the early stages of shopping for a replacement for my car. I started emailing a few dealers for quotes just to see the current landscape..
> 
> The other day I came across an ad online for an auto broker, the claim was that they could get any make model etc....
> 
> ...


The deal is going through a BMW dealer somewhere (brokers can not buy cars directly from BMWNA and can not lease through BMWFS), what they do is basically find a BMW dealer agrees to sell the car very cheap and they sell you on a higher payment/selling price... the difference between the price you are paying and the price the dealer agreed to is their profit (dealer usually cuts them a check for this amount out of the deal).

so if dealer XYZ agrees to give the broker a 328xi for $500 over invoice, but they quote you payments at $1200 over invoice, they make the $700 profit.


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## adrian's bmw (Feb 14, 2003)

Usually, they get bird dog fees (commission to broker or referrer) set up in the deal , i.e. sale price. Weird that you email a few dealers, but the same dealer might have a fleet manager that can sell to the broker for considerably less, set up a bird dog fee, and you get the paperwork from the broker and the car driven to your house.

At $30 a month diff, that's really a $1,000. Why not cast a larger net and do all the work yourself? Some markets are more competitive than others, so the broker might get the car for less over invoice in one market or from one particular center or CA than say your market.

Some may call them "middle men", but in a sense, they can catalyze business as agents for those who don't have the time or patience to walk in a dealership and raise their shirt sleeves to cut their own deal. I don't have an issue with brokers, personally, but many clients have commented that it takes the "personal" aspect out of getting a car, i.e., having a point of contact like a CA to call and answer questions before, during, and after purchase. 

BMW doesn't permit broker deals, that is selling directly to the broker and then the broker turning around and selling to the customer. There was (not so much any more lately) an issue with brokers exporting cars out of the country and that's a big no no with BMW NA. But that's a different kind of broker. You're likely referring to leasing brokers. They used to be more prevalent, but since Chase and many other banks cut back on leasing, they've had to broker deals directly with BMW centers and fleet departments.


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## LI E90 (Apr 9, 2007)

SARAFIL said:


> The deal is going through a BMW dealer somewhere (brokers can not buy cars directly from BMWNA and can not lease through BMWFS), what they do is basically find a BMW dealer agrees to sell the car very cheap and they sell you on a higher payment/selling price... the difference between the price you are paying and the price the dealer agreed to is their profit (dealer usually cuts them a check for this amount out of the deal).
> 
> so if dealer XYZ agrees to give the broker a 328xi for $500 over invoice, but they quote you payments at $1200 over invoice, they make the $700 profit.


you are correct the deal is going through a BMW dealer.

okay here is the example the numbers are just used for the basis or argument,not the actual quotes"

I call XYZ BMW on Long Island NY internet sales dept X5 30 month lease 10k per $650
I call Lease broker x5 30 month lease 10k per $620

I ask lease broker where I pick up car he says you go to XYZ BMW on Long Island and speak with John Doe Salesman.. get car serviced at XYZ BMW, etc...

so sure he is doing my leg work, but he is saving me $30 a month and I still have a relationship with John at XYZ BMW

If I call John Doe at XYZ I cannot get the car for $620


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## SARAFIL (Feb 19, 2003)

LI E90 said:


> you are correct the deal is going through a BMW dealer.
> 
> okay here is the example the numbers are just used for the basis or argument,not the actual quotes"
> 
> ...


Why not try calling ABC BMW on Long Island and tell them you have a deal at XYZ for $620 and see if they can beat it? 

Like Adrian said, I have no problem with brokers... but the fact is that they are making money on top of what the dealer would be willing to sell the car for, so if you have the time and energy to call a few more dealers yourself you could probably find someone that will sell you the car for the same price or close to the price the lease broker gets, and you can eliminate the extra money that he makes for himself. Maybe you could find a dealer that would do $610 or $615?


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## blown383 (Aug 26, 2007)

SARAFIL said:


> Why not try calling ABC BMW on Long Island and tell them you have a deal at XYZ for $620 and see if they can beat it?
> 
> Like Adrian said, I have no problem with brokers... but the fact is that they are making money on top of what the dealer would be willing to sell the car for, so if you have the time and energy to call a few more dealers yourself you could probably find someone that will sell you the car for the same price or close to the price the lease broker gets, and you can eliminate the extra money that he makes for himself. Maybe you could find a dealer that would do $610 or $615?


when u compare brokers to the average buyer u have to remember that brokers buy multiple cars a month compared to the average buyer, thus creating more buisness for certain dealers, inturn getting a better deal than most average buyers. in general if u buy 2 cars every 3 years, i will buy any where between 6 to 24 cars a year and so on and thus my deals get better and better...


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## chrischeung (Sep 1, 2002)

Also a broker may help you get out of a car you currently are leasing and into another one of another marque. Just say you were leasing a basketball star, leasing a Bently Continental. Then you want a Aston Martin DBS. I doubt you would wait around until your lease was up. They know their clients, work with multiple marques, and financing sources.

Often a broker's commonality is not the brand of cars they lease - but the clientelle. The cars may change, but the clients remain the same.

In the end, it's not a free service, so expect to pay for it. It comes down to whether it's a valuable enough service to you personally.


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