Behind the Scenes at a Car Dealer

FAQs and Facts About the Car Biz

In a way, being a car salesman as I am, is like running your own business.  Granted, I don’t have to make payroll or pay rent on the building.  I think of my customers as mine and the dealership looks at the customers as theirs.  Regardless, I treat my customers as if I owned the dealership.

As when I was self employed, I can choose to work my schedule or I can work as many hours in a day as I can.  Car sales is retail, so people come in as they would to a Department Store or almost any retail establishment – when they want to.  I realize that most people who can afford a monthly car payment are probably on a demanding work schedule themselves.  So, while I may be schedule to work 8:00am to 3:00pm on Friday, most of my customers are coming in “after work”, which to most people is probably 4:00pm and later.

If you call, or come in and then promise to come in or return to the store, you salesperson might beg you to ask for them.  Since the dealership looks upon you as their customer, they don’t really car who makes the sale.  However, if I took the time – while I wasn’t working with another customer – to show you what makes a Subaru special and how to tell if we have what you want in stock… and maybe even got you an “out-the-door” price on a specific model… I don’t get paid for the time I spent with you unless you buy a car.  Seems pretty simple, but for those (especially millennials) who work only their scheduled hours, it can be brutal.

Something you may not know about this business is that if you come back and ask for me, the salesperson you ask is supposed to find me or finish your transaction and split the sale with me.  At my dealership, as long as we have spoken or emailed you within the last 72 hours, we are secure in getting our part of the sale.  If the person who greeted you is not honest, they will insist to the end that you never asked for me so unless it’s documented in our Customer Relationship Management soft ware that you and I have spoken or emailed in the last 72 hours, I get nothing from your purchase even if I’ve been working with you every week for six months!

Car sales people only get paid if they sell you a car.  If a salesperson were to go a full month without selling a car – in California – they get paid minimum wage for the hours they worked.  So yes, there’s a lot at stake for the salesperson who spent time with you.  Unlike major chain department stores or discount stores, we don’t want to be on minimum wage.  We get rewarded by providing you a service.  In my case you will get support for years after the sale.  You can count on me to be there whether you need service on your car, help with your Bluetooth or Navigation, or even another car.  Fortunately for me, my customers come back and work only with me.  They send their friends and family to me.  I love my customers and they love me back!

I work at a Volume Store.  That means we don’t try to make the bulk of our money on the profit of each new car.   We strive to hit certain targets and stretch target numbers set by the manufacturer each month.  These numbers change every month and are not shared with me.  How it works is the store (not the salespeople) gets a nice chunk of money each month from the manufacturer if they hit their target and in some cases and even bigger chunk if they hit their stretch goal.

Outlander Sport truckload

The family that owned and ran my store before it they sold it to what is now a Fortune 500 company used to rely on the profit from each sale to feed their kids and pay their rent.  That was when the store was known by many customers as “a store that wouldn’t deal”  or “wouldn’t come down on price”.  Sad, that a local family giving people jobs and the much coveted “healthcare” before Obama was vilified for doing so and expected live on paper thin margins.  But as they say… that’s the car business, a business they chose.

One last thought on the volume store concept:  I tell many customers that the car business is the most subjective business I’ve ever been in.  It feels like what the boss had for lunch or how he or she was treated by their spouse this morning has an effect on whether or not you get what is in your mind a “good deal”.  Well in some ways that’s true, or at least it feels that way.  When you see that TV commercial where it shows the average price people paid for new car and there’s one guy who paid much less than everyone else, he probably was the last deal that dealership needed so they sold him a new car at a $2,000 loss in order fore the store to get a $50,000 bonus.  It is subjective because maybe the manager at that time thought this might be the last person qualified to buy a car that he was going to see this month and it’s only the 27th day of the month?  How likely do you think it is that those coming in after that will get the same deal?  I suppose it depends if the store gets a stretch goal bonus too.

With apologies to the Wizard of Oz, the man behind the curtain is the person the sales rep keeps “checking-in” with leaving you alone at his or or desk wondering if it’s really true there are hidden microphones near you (there are NOT that’s illegal) so they can listen to you and your spouse during your decision making process.
Just this morning I read a newspaper article where a car shopper mentions that he felt he could get a better deal at the end of the month because the dealership he was working with had to “hit a quota”.  It is definitely true that there are quotas in just about every sales organization.  It’s also true that the need to hit a certain goal within any given month could result in you getting a better than amazing deal on a new car because you happen to be they right buyer at the right time.  So what about all the people who come in to buy a car after you?  Will they get a less attractive price because the store already hit its goal?

There could be that one lucky customer who happens to be in the right place at the right time with the right attitude.  There’s a TV commercial in which they advertise a range of prices people paid and one person pays $2,000 less than the average price customers paid for the same car.  Could business stay afloat if it sold every piece of inventory at a loss?  I think you know the answer.  Yet, that one customer was given a price so low because she was ready to buy, made a commitment to buy, and was qualified to buy a car (either with all cash or good credit) at a time when that “one more car” resulted in the dealership earning a $50,000 bonus.  So, taking a loss on that one unit