Whats a fair dealer profit margin ??

No commision is not paid on factory incentives as that is passed directly on to the customer.

Sometimes the manufacturer will give the dealer a kick back for hitting targets or exceeding them but that is fairly rare for import dealers.

 

Factory to dealer incentives are fairly popular in the states for all manufacturers.

 

Yeah I dont know much about the US market but the whole idea of even factory to dealer incentives are to move vehicles. Based off that they would be advertised and passed onto the customers I would think.

 

Typcally a customer with good credit gets a good deal, but for all customers, it's not so much the great deal you got... it's the great deal you THINK you got.

BTW, they made much more than 200 over invoice on your sale... guaranteed.

 

Personally I think making $300 on a car sale for a salesman is not terrible. I'll agree with the previous poster who said TV's have a higher profit and whatnot, but that's in a way comparing red apples to green apples.

Now, I don't know the volume you move as an individual but if you sold 3 cars a week and made $300 each that's $900 for a week of work, not terrible. While I know there are all sizes and shapes of salesperson, the job doesn't require a college degree or years and years of experience. I know some will have all that and will work hard on top of it so I'm not trying to bust anyone's chops.

I will say that I've bought from a dealer only twice..the first was my 2006 Chevy Colorado (new) and the salesman was at the same place as my brother in law (body shop), the second was my 10 Tacoma 2 months ago and I went to the same place/person my wife has bought 2-3 vehicles from. Only traded in once (the Colorado on the Tacoma).

 

I forget where I heard this, but it says a lot

"A good deal is always in the mind of the customer"

 

As a salesman at Toyota i just wanted to clear some stuff up. 1)I wish we made $300 on every car thats not the case.2) most pay on profit over invoice not hold back not any other kickbacks. 3) If you buy a Tacoma at invoice you got a GREAT deal for me being in the business Ill pay $100 over to be fair (most customers dont give a S***) Tacomas dont have any rebates Toyotas typically dont. 4)as long as you think you got a good deal then thats great.

 

This^^^

BTW, I could never be a salesman. I tip my hat to you guys (and gals). You all have a lot of patience. You folks work hard for your pay.. and then some.


-Dealing with unreasonable customers, nickel and dime haggling, soft walk-outs when they don't get their way... etc. After an hour of that BS from them, I'd stand up and tell them to to go F themselves.

... then get fired.

 

I'll say this, much as I love cars and people I don't think I could do this job. The long hours would be one issue, especially as I have an ill family member I help care for. Plus all the BS from people.

I still remember looking at a Rav4 with my wife 4 years ago and while we liked it we said (honestly) that we had a few more to look at. We decided on that one and when I called the guy back I started with "I'm sure you've never heard it in your profession but we really did have others to look at"..he laughed with me.

 

I think you nailed it.. Being in the business would you not agree that days of huge markups on new cars are gone? I really believe that the deal comes from incentives that the manufacturer has and the service you get at the dealership you choose to deal with. I know that may sound cheesy I refuse to be that typical salesman and really try to earn the business of the customer.

 

After my years in the business, they should really pay the sales people on the overall profit of the deal, but they don't bc they can always find another. I have a lot of respect bc of the hours and BS you deal with.

As far as rebates, I bought a 2013 on Oct 22nd with a $500 rebate

 

Amen! That's why I switched to a place called Carsense. It was very similiar to a CarMax and it was great (except for the typical car biz managers).

 

The manufacturer might make $300 on a $1000 TV but Best Buy is lucky to make $50 on a $1000 TV...and the sales person makes $12 an hour. There is little to no mark up on the big stuff (PS3, XBOX, IPods, TV's), Best Buy makes their money on accesories...that HDMI cable you paid $75 for cost them $5, same with that $50 case for your e-reader.

To play devils advocate; no, I don't think a salesperson should make $600 to sell me a $40,000 vehicle. They greeted me in the lot, took a photocopy of my drivers permit and attached a dealer plate for a test drive. When it comes time to actually sell a vehicle the salesman has no power to negotiate, no power to sign a deal and does nothing but delay the process. In 2012, a car salesperson is an admin position that should be paid minimum wage. It's no more complicated than being a host/hostess in a restaurant. You need a general idea of the menu but ultimately you keep customers happy until you can seat them with someone who can actually sell them a product and hey, it comes with the same lousy hours.

In this day and age, selling new vehicles is a no value add proposition. The manufacturers could very easily set up a straight to consumer sales network and take the dealers right out of the equation. The only reason dealers exist is for after sale transactions: parts, service and used sales. So with all due respect to the folks who've posted otherwise, the proof is in the pudding. The free market is bit by bit reducing the dealer profit on new vehicles down to nothing...rightly so.

 

I have worked in the car industry for a number of years. Without getting into details, a car salesperson has no clue how much a dealer makes on a sale. Only a select few ever see the real numbers and those numbers are not know till after the end of the payoff year from the manufacture.

 

sorry...but you are clueless

"with all due respect"

 

Haha yes I agree.. Im sorry but a salesperson is not just a hostess that does nothing for the deal.. Belive it or not the "likeable" people in the industry tend to sell the most cars.. Because you trust them, because they give you great service and if you are good at your job 70% of the work comes after the sale making sure everything is going good with your new truck, solving any problems, keeping in contact with you and hopefully getting a repeat customer ect.. that stuff counts towards what the salesperson made also not just the 3 hours it took to reach a deal.

 

If 70% of the work comes after the sale because a meaningful relationship with the salesperson was needed to hook me up with "great service" after the fact, then it sounds like the salesperson sold me a piece of junk in the first place. Back to the original analogy, would you pay more for a TV in order to romance the salesperson at Best Buy just in case you ever need the manufacturer to cover warranty work on your new TV?

The suggestion that keeping the dealer salesperson happy equates to better future dealer service is ludicrous. Given the turnover in the car sales staff, it's statistically probable that the salesperson won't even work at the origin dealership throughout the warranty period. New car buyers - or anyone - can get preferential treatment at the service desk by treating the Service Manager with respect and showing up with coffee for the boys in the shop.

Larry, please tell me about the clues that I missed... I'm 37 and I've purchased 12+ vehicles in my life. I like variety and I am constantly shopping for my next car project. Not once has the salesman known more about the car then me, not once has the salesman added anything meaningful to the transaction.

 

I write this with no respect whatsoever.
With such a naive comment like that you don't deserve it.

a lot of customers who walk in the door are assholes right off the bat, do you think it's easy dealing with those people every day? they all think they know everything, yet don't know the first thing, and most of the time they don't know the vehicle they need whatsoever, thats why a lot of us call ourselves sales consultants, we consult our customers as to what they need.

I again will refer back to my customer that is saving $17,000 ish, because I found he can buy a 1/2 ton, and doesn't need the 1 ton he came in for, if my job was to do what you seem to think it is, I would have put a plate on the truck, he would have driven the truck and left without buying, he wouldn't have liked the ride of the 1 ton as much as the 1/2 ton, and it would have been WAY too expensive.

The majority of buyers are not like you, they don't go into the dealership knowing the exact model and package they want. more realistically, they walk in and say they are looking for a vehicle, new or used, probably a car, they aren't sure, so I find out what they need, and I show them the vehicles we have that fit their needs and wants, within their budget.

When it comes to numbers, at some dealerships managers take over, and other they don't, I've worked at both.

There are PLENTY of jobs that requite no skill, and I guarantee you this is not one of them.

 

I would safely say that %10 of people walk in and know exactly what they want to buy.

 

Probably even less, but you're on the right track for sure.
Then it even breaks down to what they want to buy, and what they can afford to buy.

I had a guy today who already owns a ram 1 ton truck, and he came in to see the new ram 1 ton trucks, even as much as he does know about them, he still had a ton of questions!