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Car Buying Agent

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 car home.

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 shoppers.

"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 merely price.

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 industry background.

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 Tucker.

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 of interest.

There are currently no government agencies regulating the field of car buying agents.

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."

Links

National Association of Buyers' Agents
Includes definition of car buying agents vs. auto brokers

Ward's Auto
Provides international auto industry news and statistics

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