I have a friend that sells new cars. Actually, I have a couple of friends that are car salesman. Anyway, they've complained to me more times, then I would like to remember. So one day recently, while throwing back a few, cold ones, I decided to lend a sympathetic ear and try to understand their plight.
(Clarification: The word, "Salesman," does not refer to gender, but only to a person, male or female.)
So here it it..................
Lets begin with the salesman pay plan. He/she receives, minimum wage, but not exactly.
You see, his/her minimum wage is subtracted from his/her commissions. So in reality, he/she works on straight commission. It's called, "a draw," against your commission. Now this, "draw," does not go away at the end of the month. It keeps adding up, until you equal it out with your commissions. Of course, should you go several months of not meeting the minimum draw, you are shown the door, and asked, not to ever return. It should also be added that , car sales people, do not qualify for, unemployment compensation, because it is understood (on the dealership's part) from the outset, that it is a 100% Commission job.
New sales people are not aware of this fact.
Surprise!
So if the salesman sells nothing all week, he/she will receive $247.20 based on an average week of 48 hours.
Remember: this will be subtracted from his commission check the following week should he sell something.
The minimum a sales person can expect, for selling a car, varies from $75.00 to $100.00.
The average is about $175.00
Now while that may sound pretty good, you must remember, these people are selling merchandize worth anywhere from, $15,000 to well over $50,000, depending on the brand dealer where they reside.
My Gawd! That's less then 1% per unit.
Dealership Owners feel that, you,
(the customers)
should pay the wages of it's sales staff. Yes, the owners have their own state and national organizations.
(N.A.D.A.) National Auto Dealers Association, to give but one example.
Next: It is the assumption by the average shopper that a car salesman
sells a couple of units a day, or at least one per day.
WRONG!
While the top salesman in a dealership might approach those numbers, the reality is, it couldn't be farther from the truth. The average is from 7 to 12 units per month. Let me repeat that.
Per MONTH!
So this means that days go by without the salesman making a dime.
Notta! Zip! Zilch! The Big Zero!
That doesn't mean, he's not working. He may talk to several potential buyers through-out a given day. He's told, they need to shop around some more, to make sure they get the best deal, or they are not ready to make a commitment yet.
In between visits, he might be on the phone, following up with shoppers that he had yesterday, or the day before.
A worst case scenario! "Yes, I just bought a car from, Joe Blow, dealership."
"Thanks for nothing!" I spent almost three hours with that customer.
January and February are very slow months for sales, at least in the north country. People just aren't too enthused about buying a new car, only to have it snowed on, and sprayed with salt. These months are barren for car salesman.
Some may go an entire month without a sale. Now remember, while he/she has a draw of minimum wage, he must pay it back, with the sales the following month. Many salesman go into the Month of March, still owing the dealership for their draw. They might work the entire month of March and part of April, to pay back for January and February.
Snow Days!
Ever notice when you go to a dealership, the day after a "big snow," how all the cars are clean of snow and there is no snow in the lots? Your driveway should look so good, right?
Well guess who does all the brushing off of the cars and plows the lot. Yep! You guessed it, the sales staff.
Not the hourly guys that work in the back end, like the mechanics, body men, or even the porters. It's the, "free," help from the sales staff.
Each vehicle has to be brushed off. Each vehicle has to be, keyed, and then moved for snow plowing. Them moved back into place. On a bad snow day, this will take an entire day.
Another day, the salesman, makes nothing, yet worked his toosh off.
The Invoice: Should a salesperson go so far as to show you the invoice, believe him/her,.......... it IS the invoice.
Most dealers will not allow sales people to do this, but some will. It is so against the law to show an illegal or fraudulent document to a customer, and the fines are very, very, high that no one in the business would take the chance.
Dealerships are audited on a regular basis by Dealer Brands, Head Offices and the Federal and State Governments, but are never told in advance. To keep, two sets, of invoices on every car would be impossible to hide from auditors. It would appear a bit obvious if the, shredder, was going, none stop, while auditors were in the house, or so one would think.
Kelly Blue Book:
"My used car, is worth more then what you guys are offering me."
To you, that may be true.
To the dealer, it's just a car.
The Blue Book, is based on assumptions on what cars should sell for, by the adds that have been posted in various newspapers and the like. ie., asking price, not selling price.
Also, the Blue Book is published on,
predictions, calculated, for the next six months. They are usually in the ballpark, but leave room for error. I believe that they even run a disclaimer to that effect.
The Black Book:
This is the book that dealerships use in making their decision on what your car is worth.
This book is published weekly, and is based on last weeks sales, by dealers, used car lots, auctions, and banks. It's also specific to the region of the country where your particular dealer resides. There is a book specific for trucks as well.
Subscription for the "Black Book" is around $157.00 per year. It is not available to the public, and is received each and every week of the year.
Salesman's worst complaint:
"People don't know how to shop for a car." With all the "websites", dedicated to help people shop for a car, with "invoices", sticker prices, etc., they still come into a dealership, clueless. People can get the figures for option packages or individual options. They still come in and appear lost; or pretend to be.
We have, the Consumer's Report magazine and other's, dedicated to helping folks make the right choice.
Playing Games:
1) I'm just starting my shopping so.........."
2) "I just need a price on.........."
3) "I'm just looking around and......."
4) "In June I'm thinking of buying a new car and................"
5) "I'm shopping for my mom and........"
6) "Could you run me, the lease payments on a.............?"
"Can it folks!"
If the salesman has been in the business longer then 2 weeks, he's heard them all.
Please, you should know pretty much what you're looking for, before you ever enter the doors of a showroom, or at least have it narrowed down.
Well unless you are merely stopping by to pick up a brochure.
You should also have a pretty good idea what you are willing to pay for, said vehicle. But remember, if the, particular vehicle demonstrated, has a few more options then what you were considering, it will cost a bit more. If the exact vehicle, with your exact options, color, etc., is not available, you may have to order it, then wait.
Are You Serious?
When you are serious about a certain vehicle, always take a test drive. The vehicle that you desire, may not be compatible with your body type.
Example: my friend told me about this guy that almost bought a car on the internet.
The price was right, the color and options were everything that he was hoping for.
It was a good thing that he decided to stop by a dealer to take a test drive in an, alike vehicle. Apparently, his hair kept rubbing against the roof, no matter how he adjusted the seat. Wearing a hat was totally out of the question.
Long in body and short in leg, makes a difference on what kind of car you might be comfortable driving.
Alway take the ride!
Rebates and other incentives:
While you are waiting for that great rebate to come about, you may be losing money along the way, or at best, staying even.
(Secret info:)
Most folks are not aware that, sticker prices, and invoices, on many popular vehicles are increased throughout the year. Yes, the first one usually comes in early Spring. So while you're waiting for a better incentive, ......................?
Another worst case scenario for the Car Salesman: "I made the sale, but now I can't get them financed." "Another 2 1/2 hours down the tube.
Another little Secret:
Should you buy your next vehicle from the same salesman, this person will go to the wall for you. He will see that your car is handled in a timely manner when you bring it in for service, He may be helpful on some of those, borderline warranty issues as your vehicle ages. He will make sure that your car is washed every time it's brought in for service, even if it's just for an oil change.
He/she is excited about you coming back to see him. Sales people always appreciate loyal customers and will do, whatever, in their power to keep them coming back.
So people, the next time you visit your local Auto Dealer, cut the salesman a little slack. He's really working hard to try and scrounge out a modest living, just as you are.
No, He's/She's not making a killing in the car business. You are not going to be fleeced for a $600 commission unless you're a complete idiot.
(Clarification: There's no denying the fact that there are some real silver tongued rascals out there.) In most cases, you can tell if you're being smooshed by a slick operater. But these, slime of the earth schiesters, are a minority and give the rest of the people in the business a bad name.
Pick your sales person like you would pick a friend. Most people, do that, pretty well.
If you spend a couple of hours with the salesman, but have decided not to make the commitment yet, slip the guy a, ten spot, with a hand shake for his time.
Remember, until you make the deal, he's working for free. All day!