How to Become an Auto Broker

Auto Brokers offer an alternative way for customers to purchase a new or used car.
Laws vary from state to state so check with your local Dealers Association for the laws and regulations in a specific location. Here is a quick overview of how to become an auto broker.

Instructions

1. If you are going to hold the broker's license, you will generally have to start with an application, a background check and a bond. If you are going to work as a broker under the umbrella of a license held by someone else you probably only need a sales license.

2. Some auto brokers own and operate a used car lot, buying and selling used cars at dealer auctions, trades and from private parties. Others limit their sales to purchasing vehicles from existing lots and selling the trade ins they acquire to a dealer or directly to the auction.

3. Only franchised new car dealers can sell a new car so auto brokers act as an agent between the dealer and the buyer. The paperwork is normally done by the dealership to ensure that there are no problems for the customer with warranty issues. Financing might be arranged by the broker or by the dealership.

4. Some new car dealers like to work with brokers; for them it is a quick easy sale with no commissions to pay to their salespeople. Others view brokers as competitors in a shrinking market and some manufacturers discourage their dealers from making deals through brokers.

5. Because auto brokers are working as 'independents' in a tightly organized market they must work hard at developing good relationships with all new and used car dealers and dealer auctions within their working area.

Tips & Warnings

• start by contacting your local NADA (National Auto Dealers Association)

• and your local

• NIADA (National Independent Auto Dealers Association)

• If your are new to the auto business, a few years spent working as a salesman both for a dealer and for a broker will give you a good overview of a very complex business

• see links for NADA and NIADA below

• Every state has its own regulations and laws governing auto sales. Be sure to thoroughly research the laws in your area before proceeding.

Resources

• NADA
• NIADA