Local Car Broker: It’s Like “High Stakes Gambling”
Traverse City-based car broker, Wally Szunko, knows automobiles. He’s bought and sold thousands of them over his 22-year career. “I buy cars. Then I sell them – mostly to dealers but sometimes to friends,” Szunko said.
That sounds simple enough. However, there is much more to actually succeeding in this fast-moving industry.
First of all, it is not a career for the faint of heart, since he buys as many as 20 cars – not with a client’s money but instead on his own dime. It takes a unique set of skills to buy at the right price. Even then, there remains the challenge of turning his considerable investment into profit.
“It’s really like high stakes gambling,” he said. In his profession, the key to making a profit is understanding what dealers – and, ultimately, their customers – want and are willing to pay.
There are two elements that help explain Szunko’s business success: relationship building and careful research.
No snakes here
Trusting relationships are especially important in the car trade, he said, since most transactions are based on one quick phone conversation or email. “So my clients have to be able to trust what I’m saying, and I have to trust them,” he said.
Szunko also visits more than 20 dealers in Michigan alone, and over the years has built a strong network of dealers in Florida, Texas and several other states. About 95 percent of his business is selling to dealers or buying trade-ins from them when a car doesn’t fit their lot. “That allows them to seal the deal [for a new car sale] quickly,” he said. “Then I find a buyer for the trade-in.”
All of these transactions rely on an honest appraisal of a car’s market value.
“I’ve heard the car business described as ‘snakey,’” he said “But I deal only with reputable folks in this industry, and they are some of the most honest people around.”
Success is in the research
Research, the second component in his business formula, means closely monitoring auctions around the country to establish a reasonable price to pay for a car. Szunko participates either in person or online in weekly wholesale auctions such as those held in Flint and Grand Rapids and in several other states.
The pressure can be extreme. Auctions, he said, involve “split-second decision making. You’re bidding and at the same time computing what it will cost to put on new tires, fix a bumper, for example.”
Buying at the wrong price means a loss or, at best, breaking even. The key is to have a set amount in mind, he said, but also staying nimble enough to react to a surprise bargain. Complicating the process is the fact that brokers don’t always know much in advance about extra features such as leather interiors, seat warmers or other add-ons that can affect price.
“I’ve seen a lot of guys think they can do this, then lose 20 grand the first month,” Szunko said of the car broker business.
He conducts online research using the “Black Book” and various databases available only to wholesalers. But he also uses an old-school method for establishing the market value of an auto. “I always do my best to compare it to the price of a similar car,” he said. But he adds a caveat. “You have to be careful with that, though. It’s still best to see both of the cars in person. You might find out they have very different features that make a comparison difficult.”
One surprise is that about half the cars he now buys come from Canada – mostly the Toronto area. Generally, he buys late model cars and avoids those from the more remote, Northern provinces where snow and salt take their toll. But the main reason to buy Canadian is the current exchange rate, which is advantageous for American buyers.
Szunko (whose name is pronounced with a silent “s”), 59, grew up in Saginaw and comes by his work ethic naturally. The son of immigrants, his father served in the Polish Calvary resistance against the Russians in WWII and his mother, a concentration camp survivor, emigrated from Austria. Both became tailors after moving to America in 1948.
Early on, Szunko learned about work and money by delivering newspapers. In those days, the paper boy not only threw papers every morning but also had to collect the monthly fee from each customer.
During high school, he worked at an old-fashioned hardware store where he repaired windows, threaded pipes and made deliveries around town.
However, his entrepreneurial spirit really rose to the occasion in his next job, which involved driving a truck to Chicago once a week to pick up a load of carpets for a Saginaw store. On one of his runs to Chicago, Szunko discovered a warehouse full of bales of used jeans that were for sale. Sensing an opportunity, Szunko started hauling jeans whenever there was room left in the truck and charging a fee to deliver them to a friend in Saginaw who made clothes and bags out of old jeans.
“Then my boss found out and I got fired and he tried out two other guys,” he said, chuckling at his youthful chutzpah. “But the first one ended up in jail, and the other one managed to get lost for four days on his way back to Saginaw. So they hired me back – and with a raise! And from then on, they were even ok with me picking up old jeans for my friend.”
During his senior year in high school, Szunko started his first business. He and a pal bought a video rental store in Saginaw, using a startup loan from his friend’s father. That venture lasted for six years – until Szunko turned 25. When they sold the business, he and his business partner had built a successful chain of five stores. The experience taught him to balance business assertiveness with flexibility.
“In life you have to look for opportunities,” he said. “But I also compare it to a riptide – you either go with the tide and gradually swim away safely, or you fight it and you’re not going to do well.”
A Broker’s Guide To Car Buying
- Deal only with reputable people.
- Remember that a used car doesn’t have to be perfect. Some things are easy and relatively cheap to fix. Other things may look like no big deal but could end up costing a lot. Before buying, ask a reputable dealer or shop what repairs would cost.
- Don’t buy the first car you look at. Instead, compare it for quality and cost with similar cars.
- Look mostly for value. Don’t limit your search to a specific model and make. As Szunko puts it, “In cars, it costs a lot to be cool.”
- Consider a former fleet or rental car because they typically offer great value.
- Don’t buy based on an advertisement.
- If you’re thinking about buying through Craigslist or a similar site, find out if the car has been in a wreck. If it has, you may be dealing a hobbyist who fixes up wrecks. That can be a mistake.
- Be wary of Carfax.
- Remember, if it sounds too good to be true, “something’s up.”
- Finally, Szunko said, opt for a more recent model, even if it has more miles than an earlier one. That’s because most late model cars are now built better and last much longer. “Cars these days are a lot different than they were in the 70s and 80s,” Szunko said. “Back then, when they hit 80 or 90,000 miles, lots of them were done. It was time to throw them away. Now it’s different. I frequently see late model cars with 300,000 miles on them – even half a million miles in some cases.”
That, Szunko is quick to point out, is not to say that all automakers have solved their production problems. When asked about Range Rovers, for instance, he gave a wry smile and replied, “Lucas Engineering makes the electrical systems for them. The old saying is, ‘Lucas also makes refrigerators, and that’s why the Brits drink warm beer.’”