Find Reviews by Make:
As a former car salesman, I can tell you that relations between the front line troops and management is usually no better—often much worse—than the relationship between the dealership and its customers. To wit, this email just in:
I used to work at —– Toyota in —–. My friends working there told me that during cash for clunkers, —– cut the sales commisions on the cash for clunkers deals by “packing” the gross of the deal with a bogus internal charge to screw the sales reps out of money. Pretty pathetic. The dealers get a bailout, raise the prices on cars to the consumer, and cut the salesmans commission. You might see if this was an industry practice. PS. I work for CARMAX now and I love it. It’s like car sales heaven. Tom
16 Comments on “Wild Ass Rumor of the Day: Cash for Clunkers Salesmen Screwed?...”
Read all comments
This just reinforces my four main life theories: 1) Debt is bad; 2) Debt with unemployment or pay cuts is worse; 3) Car dealerships are among the slimiest business entities known to mankind (even their salespeople are subject to their slathering sliminess); and 4) Germans love David Hasselhoff.
Where have you been. Dealers have been penciling sales reps for years in many clever ways. In my experience the dealers that do, lose either their businesses completely, or most of their business, not to mention all the talent. I have always requested, before I take on a project, to see the commissions and packs on the sales force.
That’s normally where the first major problem lies..
There is nothing more important than the front line of a retail store.
Publicly owned dealerships are the biggest offenders.
For the 30 years I spent in the car business I always said the dealerships screw the salespeople and the salespeople in turn screw the customers.
Another favorite dealership tactic is to either severely reduce the commission structure on hot selling models or make them all house deals meaning there is no commission to salespeople.
It’s common sense that if you’re being paid a percentage of the profit as commission your objective is to create the maximum amount of profit.
Buyer beware.
Sounds like an isolated incident. I don’t doubt that there are dealerships that have nefarious dealings with their salespeople (and customers too). As a salesperson, I might check with the Better Business Bureau before signing on with a dealership. If there are tons of complaints regarding sales tactics you can pretty well guess how you will be treated.
My entire career has been spent in retail automotive as a salesperson, sales manager, and consultant to struggling dealerships.
I have nothing wrong with a pack on all deals as long as it consistent across the board.
By far the best commission pay plan I have seen viewed cost of the vehicle as net-net plus a $200 pack (rather than invoice). Rarely an issue with pay since GM stamps net-net on all of its invoices. Commission varied from 20% to 39% of front and back gross depending on units sold each month.
Worst pay plan: anything related to the Suburban Collection in Michigan and Florida. I’ve never worked there but seem to recall it was 20% commission over invoice after a stupid pack and no pay on FI income.
In the thirty five years that I was in the car business, I never got a raise in pay. I’ve had the commission go from 30% with no pack to 25% with a $350 pack then changed to a 35% commission with a $500 pack.The management would always come up with some kind of BS about it being a raise. That doesn’t include the $20.00 charge for the dealer advertising tag put on the cars or the floor plan cost added to the cost, usually another $300 bucks or so, or the money the service department and parts department would add for boggus transmission service and power steering flushes to all the used cars. In my last few years the salesmen made a flat commission of $100 bucks or so on a car. Every dealer I ever worked for screwed the sales staff and could never figure why sales people left.
And, of course, in turn the high turnover results in a terrible experience for the customer, too.
I must say, having been on the admin side of a dealership, most of what goes wrong is in the admin/business office.
And after reading all the above posts – why do people wonder why the car business is so screwed up? I mean whatever happened to common sense, instead of f*cking everyone for every last dime?
Ho hum – I’ll never buy a *brand* new car – I’ll buy nearly new repo’ one with 4000 miles on the clock – no salesman, massive reduction in price and you still have the warranty.
I am in auto sales in the MPLS area and although my dealership did not have any sales on the cash for clunkers program (too high end), the former colleagues i have spoken with told me they are not being paid on any of those sales until the dealership receives pay from the government. Tell me that isnt a rich setup for dealerships to put the screws to the salesman. “oh, we didnt get paid for that unit” yeah right…
Absolutely. Or the stores can play dumb about getting paid for C4C deals until the salespeople move on to another dealership.
My background is high-end, too, but the autogroup has a BPG and Chevy location, too, where I guess the C4C deals were all paid even in advance of NHTSA approving a single deal.
Caveat venditor.
well it’s a good thing sales people can pack up and leave. Smart ones do just that and I guess work at carmax, sales heaven it seems.
Seriously folks, if you work in a crap environment find another job. We have that freedom still, at the moment, for the time being.
Most dealers hold back some of the sales person’s commission for a Christmas check and if you leave you don’t get it. Its just another way of keeping people from leaving and screwing them out of money if they do.
Some give their top producers a different pay plan to keep them, but most treat salesmen like crap. You almost have to be a sociopath to make in a fast track store.Its no wonder that people think of car dealers as crooks.
The last new vehicle I purchased was from a Penske dealership. The salesman showed me his commission check, $75! This was an end-of-year clearance deal “below invoice” so I dont know between the manufacturer and dealer how much profit was in it for the house. At least it was simple and we didnt have to spend more than an hour for the whole thing.
Since I pay cash and dont buy extended warranties, alarms, et there was nothing for F&I in the deal, except the “documentation fee”, which I assume goes mostly to the F&I lady. Tell me if it works that way or not.
The documentation fee is just additional profit to the dealership. Many dealerships structure the deals so the salesperson only earns a minimum commission and the profit is generated in the finance dept. thus in most cases non or minimally commissionable to the salesperson.
Hence the reason for the churn and burn instability of salespeople and the resulting poor experience for customers.
Not all dealerships operate this way but today I would say a majority do. They don’t care about their salesforce or the poor experience their customers receive as a result. A major reason IMO why consumers consistently complain about the car buying experience.
Overall, the dealership sales experience is decades behind the times, I know of no other retailer that could survive with such poor customer sales experiences especially for large ticket items.
Yes, the sales process is quite archaic. Anyhow, all but one of the dealers I regularly call on in my current position do not view F&I income as commissionable. The best dealership I consult for (and the only one I worked for in the past) views all profit, front- and back-end, to be commissionable gross after a $200 pack (new) or $500 pack (used).
The doc fee is normally just profit to the store and isn’t commissionable to a soul in the dealership, in my experience.