Dealership pay plans for Salespeople

[XDCX]

Automotive News had an interesting article this week about changes dealers are making to their pay plans for salespeople in the wake of declining gross profits. According to the NADA the combined gross (sales + finance) has dropped to $1,300.

What I thought was most interesting is there doesn't appear to be a trend - different dealers are coming up with different solutions.

Some dealers indicated they're paying their salespeople a portion of the finance profits and another indicated he eliminated the finance department and has his salespeople handle that responsibility. Others have shifted away to paying a percentage of gross profit and use a salary/bonus strategy.

Anyone have any creative solutions that work for your store?

[SHACOS]

$1,300! That seems really low.

I've seen salespeople get paid an hourly rate with bonus paid based on sales thresholds (10 sales = $500, 20 sales = $1500) etc. Not sure how well that does when trying to retain these people however.

[XDCX]

Originally Posted by SHACOS

$1,300! That seems really low.

That's what I thought too. I'm not sure if the NADA factors in holdback into that figure - hopefully it's just gross profit over invoice.

Even at that, it would be hard to keep the doors open if a dealer was trying to live on new car sales and only averaging $1,300/unit.

[ohiobuckeyes]

It was a very informative article in Automotive News. Really liked that Buddy Stasney's Buick-GMC pay plan with bonuses being paid at time of the year when sales personal would need that money.

At the dealership now I think the only sales person gets a salary, draw, and commission (he doubles as the sales manager). Finance Manager is paid Salary + Small Commission. But yet our health insurance is paid and we only have to pay $50.00 a month. So I'm a Happy Camper!

But if I had a dealership sales people would be paid Salary ($24K) Small Commission (20%) on the Gross of the unit along with unit bonus. But yet we are a few years away from that happening.

Does anyone still Charge a “Lot Fee” out of the gross profit of a vehicle?

[XDCX]

Originally Posted by ohiobuckeyes

Does anyone still Charge a “Lot Fee” out of the gross profit of a vehicle?

Are you referring to a New Car pack? If so, they're still very common on the West Coast.

[79LilRedExpress]

Originally Posted by ohiobuckeyes

Does anyone still Charge a “Lot Fee” out of the gross profit of a vehicle?

$200 pack on New
$400 on Used.

25% of gross.
Unit bonus'
Factory Spins
Old unit spiffs.
No chargebacks.