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The Broker Myth That's Costing You Thousands (By Trying To Save Zero)

Most people won't use a broker because they think it adds cost. They're wrong. And that misunderstanding is quietly draining their bank account every single time they buy a car.

Let's kill this myth right now.


The Belief That Sounds Smart But Isn't

Here's what most car buyers think:

"If a broker is getting paid by the dealership, that money has to come from somewhere. And that somewhere is me."

It sounds logical. It sounds financially savvy. It's the kind of thing people say to feel smart at dinner parties.

It's completely wrong.

And the cost of believing it isn't zero. The cost of believing it is the $2,000–$5,000 you leave on the table every single time you walk into a dealership alone, unrepresented, and unarmed.


Here's What's Actually Happening Behind The Curtain

Dealerships don't run on magic. They run on customer acquisition.

Every single month, a dealership has a marketing budget. A real one. With real dollars. We're talking:

  • Google Ads

  • Facebook & Instagram campaigns

  • Billboard placements

  • Radio spots

  • Direct mail

  • Third-party lead platforms like Cars.com, AutoTrader, TrueCar

The average dealership spends anywhere from $600 to $1,200+ per car sold just to get a warm body through the door.

Read that again.

Six hundred to twelve hundred dollars. Per. Car. Sold.

That's not profit. That's not markup. That's the cost of finding you.

Now here's where it gets interesting.


The Referral Fee Is Just A Budget Line Swap

When a broker sends a buyer to a dealership, the dealership doesn't crack open a brand new budget. They don't suddenly decide to spend more money they didn't plan to spend.

They reallocate.

The referral fee a dealer pays your broker? That's the marketing budget. It's the same pot of money they would have handed Google, or TrueCar, or the radio station that plays the jingle you hate.

The broker just replaced the ad.

You — the buyer — are the lead. The broker delivered the lead. The dealer pays for the lead. Same as always.

The only difference is that instead of a cold, anonymous click from a banner ad, the dealership got a pre-qualified, ready-to-buy customer with a professional advocate in their corner.

That's more valuable to the dealer, not less.


So Why Doesn't The Dealer Just Lower The Price Instead?

This is the follow-up objection smart people raise. I respect it. Let's address it.

"Okay Hormozi, if the marketing budget is the same either way — why wouldn't the dealer just drop the price by that amount and cut out the middle man?"

Because you won't make them.

That's it. That's the whole answer.

When you walk in alone, you have no leverage. You don't know invoice price. You don't know holdback. You don't know which units have been sitting on the lot for 67 days and need to move. You don't know which sales rep is behind on quota at 4:30pm on the last Friday of the month.

The dealership does not volunteer margin. They extract it. From you.

Without a broker, the dealer keeps the marketing budget savings and captures more margin from you because you don't know what you don't know.

The broker doesn't add cost. The broker recovers value that was already being left behind.


Let's Run The Actual Math

Here's a real scenario. Not hypothetical. This plays out every day.

Buyer A — Goes in alone:

  • MSRP: $52,000

  • Negotiates down: $500 (feels great about it)

  • Dealer profit captured: $3,200

  • Marketing cost to acquire this buyer (Google Ads): $800

  • Net dealer margin: $2,400

Buyer B — Uses a broker:

  • MSRP: $52,000

  • Broker negotiates down: $2,800

  • Dealer pays broker referral fee: $800 (from the same marketing budget)

  • Dealer profit captured: $400

  • Net dealer margin: $400

Buyer A thinks they won because they didn't pay a broker.

Buyer B actually won because they had someone who knew the game.

Buyer B saved $2,300 more than Buyer A. Using the "expensive" option.


The Three Reasons This Myth Persists

  1. It feels intuitive.

"Someone getting paid means I'm paying more." That's a reasonable heuristic for most things in life. Cars just happen to be one of the exceptions because the marketing spend already exists regardless.

  1. Dealerships benefit from you believing it.

The single greatest threat to a dealership's margin is a well-represented, well-informed buyer. Of course the industry doesn't rush to correct this misunderstanding. That misunderstanding is worth billions of dollars a year to them collectively.

  1. People confuse buyer's agents with add-ons.

A broker isn't a product. They're not an extended warranty or a paint sealant package they're trying to upsell you. They're a negotiation asset who gets paid from a budget that exists with or without them.


What A Broker Actually Gets You (Beyond The Price)

Let's not reduce this to just dollars off sticker. A good broker brings:

  • Market intelligence — What's the real selling price for this car in your zip code right now? Not what the sticker says. What's it actually moving for?

  • Dealer relationships — Brokers do volume. Volume creates leverage. A broker who sends a dealership 20 buyers a month gets a different conversation than you walking in off the street.

  • Process control — The finance office is where dealerships make a second killing. A broker knows every trick: payment packing, rate markups, unnecessary add-ons sold as mandatory. They've seen the playbook. They protect you from chapter two of the extraction.

  • Time — Your time has value. The average unassisted car purchase takes 4–6 hours at the dealership. That's not a negotiation. That's an endurance contest designed to wear you down.


The Reframe You Need To Walk Away With

Stop asking: "Does using a broker cost me money?"

Start asking: "How much am I losing by not using one?"

The marketing budget is getting spent either way. The only question is whether it gets spent on a cold Google click — or on a professional who shows up to the table fighting for your interests with real information and real relationships.

You're not paying the broker.

You're redirecting the ad spend toward someone who actually works for you.


Bottom Line

The car-buying industry is one of the last retail experiences specifically engineered to extract as much money from you as possible in a single transaction.

The broker doesn't break that system.

But they're one of the only tools available to the average buyer that levels the information asymmetry — at literally zero additional cost.

The myth that brokers add expense exists because it benefits the people who profit when you believe it.

Now you know better.

Go get represented.