quote:

Originally posted by JALLEN:

quote:

Originally posted by FishOn:
The reason is that dealers have break-points that if they exceed them, they get a bigger cut or a bonus. If they are a few cars short of a big sales goal at the end of the month or quarter, they will sell cars even at a loss, as they will make more overall by exceeding the break-point.

They lose money on every sale, but they make it up in volume.

Most I've seen make their money on service department. The sales department was just there to feed business for the service department.

Why do you think dealers are so big on getting you in for recalls? A simple recall like reprogramming the CVT might mean $200-300 to the dealer.

quote:

Originally posted by PPGMD:

quote:

Originally posted by JALLEN:

quote:

Originally posted by FishOn:
The reason is that dealers have break-points that if they exceed them, they get a bigger cut or a bonus. If they are a few cars short of a big sales goal at the end of the month or quarter, they will sell cars even at a loss, as they will make more overall by exceeding the break-point.

They lose money on every sale, but they make it up in volume.

Most I've seen make their money on service department. The sales department was just there to feed business for the service department.

Why do you think dealers are so big on getting you in for recalls? A simple recall like reprogramming the CVT might mean $200-300 to the dealer.

Having worked in a new car dealer, you're right. The largest money maker for a dealership is service, then body shop, then parts, then used cars, then new cars. BUT, the more new cars you sell, the more service customers you have.

Also volume is where a dealership makes money. Most all of their overhead is fixed costs (building, insurance, etc.). Most of their labor is commission based. So warranty work they always make money, the manufacturer pays probably 65% of their labor rate, BUT it's book time......replacing part A takes 5 hours in the book, dealership gets paid for 5 hours, the mechanics get paid 5 hours book time as well....5 hours at their labor rate, so it's a win win.....

This message has been edited. Last edited by: jimmy123x,

quote:

Originally posted by Black92LX:
Apparently their commission percentage is based upon the number of cars they sell a month. The more cars the higher percentage.
Without my sale he would have gotten 17% for the month, with mine he got 23%.

Exactly

quote:

Originally posted by FishOn:

quote:

Originally posted by Black92LX:
Apparently their commission percentage is based upon the number of cars they sell a month. The more cars the higher percentage.
Without my sale he would have gotten 17% for the month, with mine he got 23%.

Exactly

Yes, and if your manager likes you and you need 1 more unit at the end of the month to get to the next commission level, they'll sell a car for zero profit to make the deal.