jermstyle

I’m planning my next toy purchase and I’d like to know how this works before I go to the dealer. When dealing with sales managers, I would assume that their only major incentive for selling a car at the highest price possible is for the commission and the ‘sales numbers’.

The thing I’m curious about is what the commission is based on – The total sale price of the car or the amount the car is sold for over dealer actual dealer cost? Then, what is a typical percentage of commission based on one of those numbers?
I’m not looking to rip anyone off – But I think I can work a better deal if I know how it works on their side.

Thanks!

ThunderZ28

iTrader: (7)

why mess with them...
I go to the Credit union, get everything lined out with them..
walk in tell'em what I want, let them work their numbers, and then I tell them if it will work or not..
If the price of the vehicle is within what I got a loan for then we are good to go..
I could care less what he tries to do..
I know how much the car is worth, and so does the bank..
Once he has his 4 square paper ready, that's when I lay down the voucher from the bank, and ask if he could hurry this up too the manager so i can get my car...
the look on their face is Priceless...
they can either sell me the car, cause I am a for sure buy, or they can run all kinds of numbers, and I will take my business else wheres..
there a dealership out there that would rather have a for sure sale, then take the chance of not moving some of their inventory,
You just have to find them..
dont stop at the first dealership and think all the others will act the same, cause they wont.

1996Formula

iTrader: (2)

here is how im paid. i get paid on the profit of the car, not the sale price. were on a scale where the percentage of commission is based on units sold. say the dealer makes 1500 on a car. my store scoops 580 right off the top of that leaving 920. my % starts @ 22% and can go up to 30%. so i would get 202 off of the sale. if your commission is less than $100, you get a $100 flat. If its a customer that called in, or went through the internet, the internet sales person gets 1/2 of the commission or half of the flat. what are you looking to buy?

1996Formula

iTrader: (2)

what does your credit unions rate approval have to do with the negotiated selling price of a vehicle? most manufacturers have apr specials that are black and white anyways, that will blow a credit unions rates out of the water.

ThunderZ28

iTrader: (7)

It has nothing to do with it, but I have been there, and seen the games that are played.
Not saying that every salesman does this..
as stated in my first post..
he needs to shop around until he finds an honest working dealership.
I also stated that he has to find the perfect deal..
shop around..
that has nothing to do with financing..
thats just trying to find the better deal.
Most dealerships will give you a good price on the vehicle, but it's the financing that the games start to be played..
the last vehicle I bought, I completely went around that step.
the dealership, and I came to a agreement on the vehicle, and that's where it ends.. I hand him the voucher... the money is secure, and there we go..
all finished except for signing papers.
the only thing I have seen that is better than the credit union % is 0%.
I currently have 4.2% with the credit union..
I know salesmen have to make a living..but the bad ones have cast an ugly shadow over the more honest salesmen. and thats sad.

To each there own tho..
Here in Houston it is a wicked wicked tack to find a dealership that isn't trying to screw you..

I have found the credit union to be an all around more pleasant way of buying a vehicle..
the less stress I have in purchasing a vehicle the sooner I can enjoy it.

LS1 KINGS

iTrader: (9)

I agree with going through credit union.......

Kingc8r

iTrader: (21)

I don't know if Texas dealers have Internet Departments, but here in California when I sold cars through the internet I would be able to give better deals than floor guys because I was volume based...

New Cars have a Profit from Invoice to MSRP [ this is what most floor salesmen get paid off of ].

Then their is hold back, which the Manufacturer gives the dealer for flooring and etc. This is figured out by taking the invoice price and multiplying a certain # which = the hold back amount.

I could sell a car from $200 back of invoice to $1500 back depending on how expensive the car was....

When I buy cars I always do it through the internet department and I usually buy for invoice or a little over....


If you want the best deal wait till it is closer to the end of the month as most Dealerships get kick backs from the manufacturer if they sell a certain amount of units. Most dealers will lose a little on a car sale in order to get that fact kickback....

Edmunds.com will let you build the car you want and show you what they are selling for on average in your area. This is another good tool to use

rookie89

iTrader: (1)

Commission is a percentage of the profit made. Invoice is 20k, dealer sells for 24k, sales guy gets $1000. This is assuming standard 25% commission. Sometimes its less, sometimes its more. It depends on the dealer, volume of each individuals sales, etc

1996Formula

iTrader: (2)

how is letting the dealership make some money (which is the point of business) getting screwed? If you owned a store, would you sell your products for the same amount you paid for them? i love the people that will hammer you for 4 hrs on a car price, but will then go pay 1000% markup on a piece of jewelry for thier lades!

z06 mike

dealers do make a profit on what they get you financed at they get a kick back check from the them. higher the rate the bigger the check.

Kingc8r

iTrader: (21)

This is the reason why I got out of the car business. You get treated like crap. People want to buy your car for next to nothing but expect full KBB on their POS trade-in.

I would have to move 15-20+ cars a month to make anything if I sold all new cars. Then again the manufacturers don't give a ****. They get their ' retail ' from the dealers.

The care game is messed up. I would never sell a car to someone if I thought it was too much car for them and probably lost out on a lot of money for being honest.


I have a good story:

I had a couple come in and they grinded me on a car for 3-4 hours no lie. They wanted the car for less than my dealer hold back while giving them more than fair market value on their car.

I finally closed the deal with them and thought I had it wrapped up when they were in finance and they decided they need a little more off.

I thanked them for their time but I could not sell them the car for that amount and told them If they take a couple to think about the deal and if they decided to take the deal I offered them to give me a call.

While going through negotiations they told me how they had their own bakery business. I ended up calling them for some catering needs and got some cookies and brownies made.

When I got there to pick them up and pay for the goods I gave them a counter offer on their price. They weren't too happy with this and I told them since they couldn't give me the price I want I couldn't purchase their goods.

Kingc8r

iTrader: (21)

That's one way they get it. In the end it's a business. Consumers don't let them make money on the front end so they have to try to make a profit on the back end of the deal

jermstyle

Thanks for the info everyone.

I know that dealers need to make money, but they don't necessarily need to make it all off of me..

The sales manager that I'm working with is being really cool about it - He showd me the internal dealer docs that show the purchase price of the car and said to meet him in the middle.

I have my own financing and no trade-in - So it really just comes down to the bottom line price.

I just wanted to know how this works because if he sells me the car at invoice I'm guessing that it will cost him is commission - But, maybe he can sell me the car at invoice and I can leave him a 'tip'.

Kingc8r

iTrader: (21)

If customers did this I would have no problem selling a car below invoice....

Anything at $500-700over invoice and under you get a flat commission...so I would just sell it to you for invoice or under, even way under if the tip was good

jermstyle

Now the question is - What is a 'good' tip?

Kingc8r

iTrader: (21)

Exactly.

ThunderZ28

iTrader: (7)

I agree.
It is a business and needs to make money to survive.
But, Marking a car 5-10,000 over MSRP just cause a car is hot is ridiculous.
I will pay fair market value for a vehicle, and I am even willing to go just slightly over, but that's about it.
I have several acquaintances that work as salesmen. they have a family to support just like I do.
I don't expect them to give a vehicle away, just because someone comes in with a sob story, that they cant afford a vette cause they make minimum wage
Like I said There are a few good dealerships out there that will take care of you, but there are far more Crooked ones that will figure out a way to screw more money out of you. Especially around the Houston area.
Landmark was one of them, and I am definitely glad they went out of business.