Buying a new car can be a tough decision for many consumers. That's
one reason why car buying can be a booming business for a self-employed agent.
Car buying agents present an alternative to consumers who dread the process
of buying a new car. For a fee, car buying agents will take care of all the
purchasing details. The client can then just pick up the keys and drive the
This field seems to be growing. Linda Goldberg, founder and executive director
of the National Association of Buyers' Agents (NABA), anticipates that over
the next 20 years, 20 percent of American cars sold will be purchased through
car buying agents.
But not everyone is jumping on the bandwagon. "I suspect one reason why
it may not be popular among individuals is that there may not be any cost
savings," says Grant Yoxon, editor of an automotive magazine.
"It is likely a service that would interest individuals who are willing
to pay more for a vehicle because it saves them time to trust someone else
to make the purchase."
Cameron Tucker, who owns a car buying business, agrees that this service
is not for everyone. "It is not for the shoppers who pride themselves on the
deal they can wrangle out of the local car dealer -- what we call the macho
"It is not for the person who is shopping for a very inexpensive car. And
it is not for the person who has the time and doesn't mind spending a few
weekends looking and negotiating with a dealer."
According to Tucker, he can usually beat the price a customer can get on
their own, but he notes that his business emphasizes service and price, not
A Tale of Two Agents
Linda Lee Goldberg had 12 years of experience in the auto industry before
she started her own company. "I've done it all," she says, after having worked
in car sales, leasing and financing, among other aspects of the business.
With the creation of her own company, she sought to change the way consumers
approached car buying. "You have to have a passion," she says about starting
a car buying agency. "Then the entrepreneurial magic begins to happen."
But the magic didn't happen overnight. The early years of the business
were difficult ones, spent in "starvation and bankruptcy mode," Goldberg says.
It took about five years to establish a growth pattern, even with her extensive
Tucker echoes the need for passion. "My passion for cars is the primary
reason I am in the business," he says. "My love of cars is the beginning of
the story and [my business] is the end result."
But having a passion for something does not necessarily ensure that it
will translate into a profitable business, Tucker points out. There must be
a market and an idea about how to serve that market.
"Our service goes much beyond that [providing customers with a dealer contact]
by doing all the work for the customer -- finding the exact car they want,
negotiating the best deal, finding the best financing, getting the best price
for their trade-in and, finally, delivering the car to the customer," says
A typical day for Tucker might involve meeting a customer to finalize a
car purchase, traveling to a dealer to pick up something for a client, visiting
local dealers to review purchases in progress, and handling e-mail and phone
correspondence. As with any entrepreneurial business, being your own boss
can lead to 12-hour workdays.
Car Buying Bucks
"A successful car buying service owner can easily earn $10,000 a month
after a few years," says Tucker. He started out generating about 20 car deals
a month, making about $395 a customer.
While you can keep overhead low working from a home office, marketing and
advertising expenses are still a necessary part of this business. Tucker estimates
that a solo car buying agent can net $5,000 to $6,000 per month.
According to Goldberg, car buying agents should earn fees from the consumer
only, not through dealers, lenders, or manufacturers, to avoid any conflicts
There are currently no government agencies regulating the field of car
While no specific education is required to start a car buying service,
it's a good idea to have at least two years of experience in auto sales, leasing,
or financing before becoming embarking on this career. As with any entrepreneurial
opportunity, an MBA degree and prior business experience can be assets.
"The [car buying agency] industry is rapidly growing, but does not have
an identity yet," according to Tucker. This certainly presents opportunities
for the car-loving entrepreneur.
"Almost everyone who meets me comments on what a good idea it is to help
people buy cars," says Tucker. "It is truly a consumer service."
National Association of Buyers' Agents
Includes definition of car buying agents vs. auto brokers
Provides international auto industry news and statistics