What's a fair and reasonable profit and commission?
#21
Race Director
Thread Starter
I've often wondered how car dealers make money when you see the multi-million dollar facilities they have. The millions in inventory on the lot etc. and their constant claims "I'm losing money on this deal". I assumed they make a killing off of leasing since that is the vast majority of what people do. Every time I buy a car the salesman is shocked when I tell him I am buying not leasing. One guy told me that less than 1 in 10 people buy.
I don't know what kind of education it takes to become a car salesman, I assume not much (that's not intended to be insulting). It's not manual labor or really even skilled labor so I would say $25 an hour on average.
I don't know what kind of education it takes to become a car salesman, I assume not much (that's not intended to be insulting). It's not manual labor or really even skilled labor so I would say $25 an hour on average.
As to your second point, in many cases you are correct. There are a lot of people in this business who are here simply because it's all they can get. We've all experienced what it's like trying to work with those folks. There are also those among us who have college degrees, are mature articulate adults, know their products, and consistently display the utmost of professionalism. I for one find it very unfortunate that many buyers neither see nor care about the differences.
#22
Le Mans Master
By the time I get to the dealership I know what car I want, which options, MSRP vs dealer cost, and so on.
If you could buy cars on Amazon, I would. The sales staff adds next to nothing for me.
The guy I buy my cars from knows this, and we don't waste each other's time. We do it by email, I have the check ready when the vehicle gets delivered, and we shake hands when he leaves with my trade, if I have one. He's an exception too, because he's been at the same dealership for years, which isn't even local to me.
Normally, the experience is you pull up at a Chevy dealership and three guys run out to try to grab you, but none even have business cards yet because they've only been working there a week, and are sharing a desk, and know next to nothing about the cars.
I don't mean to sound down on cars salespeople, but I am. There ARE good ones out there. They're just rare.
#23
Intermediate
If I have to spend 5 hours with a salesman to buy a damned car, I'm not going to be a happy customer.
The time wasted on some of these transactions is ridiculous.
Best car buying experiences I've had were 45 minutes to an hour and me getting what I consider a fair shake. Don't care how the dealer and salesman split their share.
But don't waste half of my damned day on the deal.
The time wasted on some of these transactions is ridiculous.
Best car buying experiences I've had were 45 minutes to an hour and me getting what I consider a fair shake. Don't care how the dealer and salesman split their share.
But don't waste half of my damned day on the deal.
#24
Race Director
Thread Starter
I don't need a salesperson. I've never met one that knew more about the car I was planning to buy than me, if as much. I don't get that.
By the time I get to the dealership I know what car I want, which options, MSRP vs dealer cost, and so on.
If you could buy cars on Amazon, I would. The sales staff adds next to nothing for me.
The guy I buy my cars from knows this, and we don't waste each other's time. We do it by email, I have the check ready when the vehicle gets delivered, and we shake hands when he leaves with my trade, if I have one. He's an exception too, because he's been at the same dealership for years, which isn't even local to me.
Normally, the experience is you pull up at a Chevy dealership and three guys run out to try to grab you, but none even have business cards yet because they've only been working there a week, and are sharing a desk, and know next to nothing about the cars.
I don't mean to sound down on cars salespeople, but I am. There ARE good ones out there. They're just rare.
By the time I get to the dealership I know what car I want, which options, MSRP vs dealer cost, and so on.
If you could buy cars on Amazon, I would. The sales staff adds next to nothing for me.
The guy I buy my cars from knows this, and we don't waste each other's time. We do it by email, I have the check ready when the vehicle gets delivered, and we shake hands when he leaves with my trade, if I have one. He's an exception too, because he's been at the same dealership for years, which isn't even local to me.
Normally, the experience is you pull up at a Chevy dealership and three guys run out to try to grab you, but none even have business cards yet because they've only been working there a week, and are sharing a desk, and know next to nothing about the cars.
I don't mean to sound down on cars salespeople, but I am. There ARE good ones out there. They're just rare.
#25
The Consigliere
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Dave raises a good point - when you have a quality salesperson who knows his products (and knows how to handle trades if one is involved) this is pretty straight-forward stuff.
#26
Melting Slicks
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To answer the question from the OP directly, I think a few hundred bucks at best.
The sales personal do little to nothing to facilitate my buying experience and try to add their own value, just like lawyers making everything in the legal profession so complex that it feeds upon itself and is designed to necessitate their intervention for the simplest things.
We don’t need a middle man to run back and forth to the sales manager and play games among other things anymore.
Looking forward to the Tesla business model. There is little to no value added from the dealer, just a middle man.
The sales personal do little to nothing to facilitate my buying experience and try to add their own value, just like lawyers making everything in the legal profession so complex that it feeds upon itself and is designed to necessitate their intervention for the simplest things.
We don’t need a middle man to run back and forth to the sales manager and play games among other things anymore.
Looking forward to the Tesla business model. There is little to no value added from the dealer, just a middle man.
#28
E-Ray, 3LZ, ZER, LIFT
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Yep, bought my first Vette, an '88, they way you describe. Looked up dealer invoice and negotiated with the sales manager at the Chevy/Mercedes dealer by handing him a piece of paper with my info, MSRP and Dealer invoice (knowing there was a holdback but did not include that in my verbal negotiations.)
Reached a price for the Vette that was ordered and he gave the sale to a new salesman. Did the same with my next Vette, a '93. In both cases they would not be financing.
Today with the large dealers selling at deep discounts, appears to me to be like buying from Amazon. IF you know what you want, like many on the forum, and don't have a trade, tough to pay much more at a local dealer. Certainly worth the extra cost of a trip to a discount seller and driving it home or having it transported.
However there are many buyers who don't really understand the model differences or options. Also many have trades and don't want to sell on their own. Some what to drive the car or as a minimum buy one they have sat in and the wife likes! Therefore a competent Corvette salesperson is well worth it to the buyer. Dealer/salesperson profit have to mostly come from the trade and financing commissions. Can add the cost of getting a car from a discounter, but little more, IMO.
Talked to the salesman that sold us our BMW SUV before my recent Grand Sport purchase. They are a large Chevy, BMW and Mercedes Dealer and he can sell any of those brands. I just asked for a price on my trade. They looked at my mint condition 2014 C7 but he admitted in our area is not good for selling Vettes, new or used. They wholesale trades! Gave me a low offer for my 2014 (as expected) so I didn't even ask about the price for the new Vette I was planning to order, which he indicated would add ~$3000 to the trade value by discounting the new car. That was far less that the discounts offered by the large internet dealers.
Sold the 2014 on my own and bought from Kerbeck.
Reached a price for the Vette that was ordered and he gave the sale to a new salesman. Did the same with my next Vette, a '93. In both cases they would not be financing.
Today with the large dealers selling at deep discounts, appears to me to be like buying from Amazon. IF you know what you want, like many on the forum, and don't have a trade, tough to pay much more at a local dealer. Certainly worth the extra cost of a trip to a discount seller and driving it home or having it transported.
However there are many buyers who don't really understand the model differences or options. Also many have trades and don't want to sell on their own. Some what to drive the car or as a minimum buy one they have sat in and the wife likes! Therefore a competent Corvette salesperson is well worth it to the buyer. Dealer/salesperson profit have to mostly come from the trade and financing commissions. Can add the cost of getting a car from a discounter, but little more, IMO.
Talked to the salesman that sold us our BMW SUV before my recent Grand Sport purchase. They are a large Chevy, BMW and Mercedes Dealer and he can sell any of those brands. I just asked for a price on my trade. They looked at my mint condition 2014 C7 but he admitted in our area is not good for selling Vettes, new or used. They wholesale trades! Gave me a low offer for my 2014 (as expected) so I didn't even ask about the price for the new Vette I was planning to order, which he indicated would add ~$3000 to the trade value by discounting the new car. That was far less that the discounts offered by the large internet dealers.
Sold the 2014 on my own and bought from Kerbeck.
Last edited by JerryU; 07-29-2017 at 01:46 AM.
#29
I think Jeff is listening
Yep, bought my first Vette, an '88, they way you describe. Looked up dealer invoice and negotiated with the sales manager at the Chevy/Mercedes dealer by handing him a piece of paper with my info, MSRP and Dealer invoice (knowing there was a holdback but did not include that in my verbal negotiations.)
Reached a price for the Vette that was ordered and he gave the sale to a new salesman. Did the same with my next Vette, a '93. In both cases they would not be financing.
Today with the large dealers selling at deep discounts, appears to me to be like buying from Amazon. IF you know what you want, like many on the forum, and don't have a trade, tough to pay much more at a local dealer. Certainly worth the extra cost of a trip to a discount seller and driving it home or having it transported.
However there are many buyers who don't really understand the model differences or options. Also many have trades and don't want to sell on their own. Some what to drive the car or as a minimum buy one they have sat in and the wife likes! Therefore a competent Corvette salesperson is well worth it to the buyer. Dealer/salesperson profit have to mostly come from the trade and financing commissions. Can add the cost of getting a car from a discounter, but little more, IMO.
Talked to the salesman that sold us our BMW SUV before my recent Grand Sport purchase. They are a large Chevy, BMW and Mercedes Dealer and he can sell any of those brands. I just asked for a price on my trade. They looked at my mint condition 2014 C7 but he admitted in our area is not good for selling Vettes, new or used. They wholesale trades! Gave me a low offer for my 2014 (as expected) so I didn't even ask about the price for the new Vette I was planning to order, which he indicated would add ~$3000 to the trade value by discounting the new car. That was far less that the discounts offered by the large internet dealers.
Sold the 2014 on my own and bought from Kerbeck.
Reached a price for the Vette that was ordered and he gave the sale to a new salesman. Did the same with my next Vette, a '93. In both cases they would not be financing.
Today with the large dealers selling at deep discounts, appears to me to be like buying from Amazon. IF you know what you want, like many on the forum, and don't have a trade, tough to pay much more at a local dealer. Certainly worth the extra cost of a trip to a discount seller and driving it home or having it transported.
However there are many buyers who don't really understand the model differences or options. Also many have trades and don't want to sell on their own. Some what to drive the car or as a minimum buy one they have sat in and the wife likes! Therefore a competent Corvette salesperson is well worth it to the buyer. Dealer/salesperson profit have to mostly come from the trade and financing commissions. Can add the cost of getting a car from a discounter, but little more, IMO.
Talked to the salesman that sold us our BMW SUV before my recent Grand Sport purchase. They are a large Chevy, BMW and Mercedes Dealer and he can sell any of those brands. I just asked for a price on my trade. They looked at my mint condition 2014 C7 but he admitted in our area is not good for selling Vettes, new or used. They wholesale trades! Gave me a low offer for my 2014 (as expected) so I didn't even ask about the price for the new Vette I was planning to order, which he indicated would add ~$3000 to the trade value by discounting the new car. That was far less that the discounts offered by the large internet dealers.
Sold the 2014 on my own and bought from Kerbeck.
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JerryU (07-29-2017)
#31
E-Ray, 3LZ, ZER, LIFT
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Guess you can buy anything from them!
No winder Jeff Bezos became the richest man in the World for a few minutes this week! Net worth was over $86 Billion beating out Bill Gates! Stock price dropped back down but wait a week!
Last edited by JerryU; 07-29-2017 at 07:17 AM.
#32
Race Director
I think his net worth was actually just over 90 billion, but what's a few billion dollars to these guys? It's probably what they carry around in their wallet!
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JerryU (07-29-2017)
#33
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L8ter (07-29-2017)
#34
If there were real pricing to start with from the manufacturer buyers wouldn't feel like they are being had. Unfortunately, the dealer and the salesperson get the brunt end of that mistrust. My experience was very good with the saleswoman at Classic in Grapevine. Oversupply equals no margin. Under supply equals big margin. The OP knows this. More educated buyers often know the car better than the salesperson and therefore can be more aggressive negotiating. The dealer doesn't have to sell the car at a certain price either.
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mpuzach (07-29-2017)
#35
I dealt with Mike Forman at Criswell because he's local to me. You all don't know what you missed. It was a VERY positive experience. I'm sure I could have gotten a better deal buying one of the many cars on the lot, but none of them were EXACTLY what I wanted. So I ordered it.
I didn't feel like I was had, they made money. (I have no idea how much) but I felt fair to me.
And no, I'm not going to go to war over $500 on a $73,000 car. Heck, the three hours I spend trying costs me more than that...lol
I didn't feel like I was had, they made money. (I have no idea how much) but I felt fair to me.
And no, I'm not going to go to war over $500 on a $73,000 car. Heck, the three hours I spend trying costs me more than that...lol
Last edited by rrsperry; 07-30-2017 at 08:47 PM.
#36
Miller Time Wisconsin 🍺
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Your salesman was Mike, not Mark.
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Mike Furman@Criswell (07-29-2017)
#37
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St. Jude Donor '15
"In honor of jpee"
Back in the day (I'm old) it was like pulling hens teeth when buying a car. It was a dreadful experience. Today anyone with a little common sense can find the invoice of the car they want, ask the dealer if they will sell the car at that price, pay the fee's, tax, tag, title, and be on their merry way. Unfortunately that uninformed car buyer for the most part makes it hard on themselves, and the salesperson by wanting the car at that special price they feel they deserve. I'm fairly sure I would get fired right after that person left if I was a salesperson at at car dealer.
The dealer (locally owned) I have been buying from for over 30 years is one of the easiest to make a deal with if you just understand they are in business to make a small profit, and make a serious offer. It works for me every time I'm in the market.
Unlike many others I try to understand that the salesperson has a family to feed, and I'm not going to embarrass them by making a stupid offer. To me a person that doesn't care if that person makes a profit is a sad sad individual. Everyone on this earth that works deserves to be paid for their labors. Just like the person that doesn't care if that worker makes a profit. IMHO
The dealer (locally owned) I have been buying from for over 30 years is one of the easiest to make a deal with if you just understand they are in business to make a small profit, and make a serious offer. It works for me every time I'm in the market.
Unlike many others I try to understand that the salesperson has a family to feed, and I'm not going to embarrass them by making a stupid offer. To me a person that doesn't care if that person makes a profit is a sad sad individual. Everyone on this earth that works deserves to be paid for their labors. Just like the person that doesn't care if that worker makes a profit. IMHO
I'll also second Poorsha's comment of being a capitalist and wanting people and companies to make money. So, to answer the initial question by Mike, I'll say it this way: I am fine with the salesperson
making as much as they can on any given deal. And sometimes (most of the time for some who are good at their job) they can make more on one deal just like airline seats are not all the same cost.
I'll also say that while the consumer has much more information today than what Rebel spoke of in days gone by, it is my opinion that dealers did not sit still waiting for the tidal wave of consumer knowledge to roll over them, or drown in red ink because the customer knew more. My opinion is that the dealer, and the better sales staff always have 1) more information than a consumer will have, 2) more ways to come up with selling cars at a profit, and 3) more incentives that the customer will never know about. Never.
In fact, it is also my opinion that many sales staff know very little of the actual operation of a dealership, and don't care to know. But if they did care and found out more, they'd be far sharper at their job which means, make more money themselves.
All jmo. ymmv
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mpuzach (07-29-2017)
#38
Burning Brakes
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#39
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I can assure you that the salesperson doesn't like it either. When it takes that long it's usually because the buyer is causing it to do so. Not every buyer is informed. I've had to spend an hour or longer just "showing" the car because the buyer has never seen a C7 before. Then once they get done trying to buy the car for $5,000 below invoice and they end up buying it for whatever the agreed upon price is, they often want a complete demonstration and explanation of every last button, switch, and icon on / in the car. When I have a customer who drops $70K on a car, I'm going to give them what they want.
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woodsguy (07-30-2017)
#40
Race Director
Remember aw no bitching, you got your 'deal'.