Tuesday, September 21, 2004

Confessions of a Car Salesman

What if you worked for Edmunds and your boss told you to go get a job at a car dealership and write a story about it?  You have no experience selling cars, but you will be getting paid and receiving benefits from Edmunds.  Would you do it?  Whether you would or wouldn't, I found a link to this article on Edmunds entitled "Confessions of a Car Salesman" via this post on Debris.com.  A note of warning before you read the article: It's fairly long and, like a good novel, it's hard to stop reading once you start.

Some excerpts from the article:

Commissions were based on the "payable gross" to the dealership and were applied in three tiers. If the payable gross was from $0 to $749, our commission was 20 percent of the profit, from $750 to $1249 the commission was 25 percent of the profit. Above $1250 the commission was 30 percent of the profit. In other words, the higher the profit for the dealership, the higher the commission I would earn. Obviously, this motivated salespeople to build profit into the deal so they could hit that magic mark and get into the 30 percent bracket.

. . . I found that I was, in fact, working on straight commission. If I sold cars I made money. If I didn't sell, I didn't make a penny. Maybe that's why there were so many salespeople working here (about 85 in new and used cars). It didn't cost the dealership extra to have a big staff.

For every $10,000 that is financed, the down payment they try to get is $3,000 and the monthly payment they try for is $250. In this way, a $20,000 family sedan would require about $6,000 down and a $500 a month payment. (These payments are based on very high interest rates calculated on five-year loans. These numbers are so inflated that a manager I later worked with laughingly called them, "stupid high numbers.")

During my short stint as a car salesman I saw this look of fear from customers many times. It ranged from a mild apprehension to abject terror. Sometimes customers would actually become hostile. I'd cheerfully say, "How can I help you?" And they would lash out with, "Can't you leave me alone for one second? I just want to look! On my own! OK? On my own!"

1 comment:

Anonymous said...

The national average stint of car salespersons at a dealership is 4 months. The job has a high rate of burnout because it is so stressful. Others just simply don't make the grade and quit of their own accord or are made to. The majority of car salespeople have no regular salary, no benefits of any kind and have no job security. They can be fired at will by the dealership and they are made to sign a contract to this effect before hiring. Many are kept in the dark as to the formulae for their commissions. Knowing the formulae does not always help because the managers are not bound to it. Salespersons's earnings are entirely at the mercy and whim of the car dealership and their managers. The hours are long, with 10 hours on the lot as average. They stand outdoors in the heat and insects of summer and in the cold of winter. They endure insults, boorish behavior and even threats of physical violence from many customers, some of whom are even supposed to be ladies. In other words, car salespersons are among the most exploited workers in America save for Mexican fruit and vegetable pickers.

Don't blame the dealers either until you have made an exhaustive study of their profit and loss statements for at least three years. I really don't understand what you people are crying about because I see you buy lots of stuff at outrageous prices all the time. Like, when was the last time you paid almost five bucks for popcorn at the movies which actually costs only 50 cents? That's a 1000 per cent overprice right there. Be fair, be honest with yourself. In this country, doctors, lawyers, mechanics, plumbers, house renovators, real estate salesmen, everybody gouges someone else. You are both a gouger and a gougee so don't talk as if you are a Caesar's wife when you talk about car salesmen. Oh, you are an employee on a fixed salary are you? Well, employees, especially government employees are the worst thieves I have ever seen stealing time, money and supplies from the taxpayers all the time