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Car buying service

Car buying services can get you a better deal on your new car. See how they work and how much they cost.

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By

Ben Gribbin

Updated

Fact checked

A car buying service could potentially save you up to $4,800* on a new car.

See if it's actually worth it and if it's the right choice for you.

Car buying service

What is a car buying service?

Car buying services connect vehicle buyers with car dealers. As they do this in high volumes, they are able to negotiate competitive prices, sometimes even pitting the car sellers into competition with each other. This drives down the costs and could save you thousands of dollars on the purchase price of a new car.

How does a car buying service work?

Let's look at Carma and OnlineAuto.com.au to see how the two companies operate.

OnlineAuto.com.au

OnlineAuto.com.au says it'll help you find the right car, thanks to its "bulk buying power", which appears to be based on fleet pricing. It also puts a big emphasis on helping you pick the right car, with example savings for different models. You can handily search for cars based on features and specs, like seat numbers, room for tall people and even how the exhaust sounds.

The site allows you to fill out a quote form, which we tried out. It's a pretty brief and straightforward process: once you've selected the model, you punch in some contact details. OnlineAuto.com.au also asks about your purchasing timeframe and whether you've yet test-driven or found the exact car you're after.

Average OnlineAuto.com.au savings: $4,104*

Once you've sent your request off, a specialist from OnlineAuto.com.au will ring you. Finally, after 48 hours, you should receive offers from dealers Australia-wide. According to its site, OnlineAuto.com.au can also help you organise a test drive, apparently for more than one vehicle. Finally, it promises to arrange delivery of the car you purchase.

It also accommodates trade-ins and valuations with a pick-up service. Those could help take some of the hassle out of getting rid of your old car.

*OnlineAuto.com.au added together the savings of cars purchased using its service between 1/01/2017 and 5/07/2019 (a total of 2,625 customers). The total savings amounted to $12,117,142.87. It deducted the driveaway prices paid by customers from the Manufacturer Suggest Retail Price (MSRP), plus stamp, government charges and On-Road Costs (ORCs).

Carma

Carma boasts a way to buy a "quality used car without having to trust randoms you've just met".

You can browse hundreds of used cars on the Carma website by filtering for various specifications such as car make and model, price, transmission and fuel type. You're then able to inspect the car in the virtual showroom, which offers a 360° view of both the interior and exterior of the vehicle.

All the cars available have been road-tested, inspected and reconditioned to ensure the best quality.

Once you've found your perfect used car, you can either fill in the form online to purchase the car outright or you can apply for finance through one of Carma's lending partners. You can also call Carma to walk through the forms with a representative. If you're in the Greater Sydney area, Carma will arrange to deliver the vehicle to your door once payment or the finance plan is finalised.

Unlike if you were to buy through an independent seller, Carma offers a 7day money back guarantee, a 3 month warranty and 1 year roadside assistance.

How much does a car buying service cost?

There are no additional costs for Carma, but you will need to put down a $500 deposit to reserve your car during the application and payment process.

Is using a car buying service actually worth it?

Looking through reviews for car buying services, it's definitely worth a go. After all, who's going to turn down potentially thousands of dollars of savings? Also, you've got the added bonus of being able to shop from home and not having to traipse from dealer to dealer. With OnlineAuto.com.au helping to organise test drives of more than one vehicle, you're able to directly compare different models.

Carma's website boasts reviews from customers who were initially sceptical of buying a car online without test driving, but that the service was "impeccable". In fact, another reviewer said the 7 day money back guarantee meant that not being able to test drive the car wasn't a big problem because they could spend more time with the car to decide if it was really a good fit. Carma also has 5 stars on Google, with one person calling their experience "unreal".

OnlineAuto.com.au holds an "Excellent" score on Trustpilot, a 4.6 out of 5 star rating. Scrolling through the comments, reviewers said they saved $4,500 when buying a Mazda MX5. Someone else stated they were happy with the trade-in price given for their old car, while another said they only had to speak to the car dealer when organising the registration and delivery.

How do I collect my vehicle?

Carma arranges complimentary customer delivery to your home or office, as long as you're in Greater Sydney. You may also be able to collect the car if you're outside Greater Sydney, but the dealership is based in Sydney.

OnlineAuto.com.au also states you can pick up your car from the dealership or have it delivered to a location of your choosing.

How do I find a good car buying service?

Go online, check out the company's website and read the terms of service. You should also make sure you read actual customer reviews on forums like Whirlpool. Look for people who can share their unfiltered and independent experiences with a car buying service.

Frequently asked questions

How do I pick up my vehicle?

Dealers can arrange delivery, or you may be able to organise a collection if you wish.

Do they sell only new cars?

OnlineAuto.com.au works with new car dealers exclusively. However, Carma offers only used cars.

What do dealers get out of this?

At the end of the day, more sales. They're paying the car buying services to provide them with pre-qualified sales leads essentially. Why would they want to do this? It opens up their dealership to potentially nationwide customers and allows them to sell cars easily online.

How do these services make money?

The car buying services tend to operate on either a subscription basis, where a dealer pays monthly to be sent requests for quotes, or they are given a pre-agreed fee for each sale. Or possibly both.

Additionally, they may also make money through any finance deals they broker.

Are cars available in every state?

OnlineAuto.com.au say they work with dealers across Australia. Carma is based in Sydney so only delivers to Greater Sydney or cars can be picked up by NSW residents outside of that area. However, the FAQ section of Carma's website does say wider Australia coverage will be coming soon.

Are the quoted prices the final price I'll pay?

There may be additional vehicle fees. For instance, when you purchase a car with Carma you need to take into account stamp duty and the registration transfer fee which needs to be paid within 14 days from delivery of the car.

Do car buying brokers handle the financial side of things?

Potentially, though you need to read the small print and do your due diligence. Carma offers finance through three lending partners and it also has its own financial consultants on hand to help you with any finance questions you may have.

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