Ex/Current Main Dealer Salespeople - please enlighten me
Discussion
scoTTy32 said:
If the salesman at the dealership is to be believed, there is no money in selling new cars these days! Anyone care to offer a candid insight into volumes, margins, commissions & where the money's made?
Not on a public forum, no.It varies from manufacturer to manufacturer but there isn't any money in volume car sales that's why i don't work in volume any more.
scoTTy32 said:
If the salesman at the dealership is to be believed, there is no money in selling new cars these days! Anyone care to offer a candid insight into volumes, margins, commissions & where the money's made?
There hasn't been for years and years. The money is in finance, dealer fit extras and so forth.davepoth said:
The money is in finance, dealer fit extras and so forth.
I bought a new Golf for my daughter a couple of months ago. It took literally hours and the vast majority of the time was the salesman and a whole team of other people trying to sell us finance and various other protection packages.Even after we'd completed the deal and were on the way out of the door, the sales manager offered to rebate £300 if we took finance.
I'll just order my next car on the internet.
I work in the industry and spend a lot of time looking at spreadsheets that detail profit. Most of the brands I work with (Audi, BMW, Ford, Toyota, Lexus, Mercedes, VW, Mini, Jaguar, Land Rover) I'd say that on new cars up-front profit is split fairly evenly between chassis profit and add-ons, factor in quarterly bonus monies and its 2/3 - 1/3 in the chassis. I'd say average front end profit is anything from £700 for the more volume brands and circa £1500 - 3500 for the more "premium" brands
Elroy Blue said:
He gets a flat £50 on the sale of a new car then commission on the add ons.
Hence you get treated like s
t if you're buying a car for cash.Even my daughter noticed in the Golf purchase that the car became almost irrelevant - it really is just a means of being able to flog you finance and insurance etc.
I wonder if dealer management realise how much this pisses off customers?
^^^^ This. Went to look at a 350Z on Saturday & when I went through in the old chesnut about a "discount for cash" (yes I know, those days are long since gone), he told told me in no uncertain terms that he would far prefer me to take out finance & might even waive the 12 months charge of £299 if I paid by finance.
I bought a car on Saturday, when the figures were worked out the dealer had added nearly 1300 quids worth of protection and insurance. Obviously I got it all taken off, and I don't really blame them for trying, but it did seem a bit of a cheek at the time. They were also keen to push finance and despite telling them I was paying cash they presented me with a finance deal offer.
These are lean times and I don't think it's wrong to try and maximise your profits, I was pretty gobsmacked when I saw 1300 quid added to the bill for stuff I didn't want/hadn't asked for though.
In the end the car was knocked down a bit and one of the packages thrown in 'for free', I guess this is all about commission.
Asides from this it was a good buying experience with a salesman who obviously had a lot of love for the product he was selling. This is probably why I'm not more aggrieved by the add-ons.
These are lean times and I don't think it's wrong to try and maximise your profits, I was pretty gobsmacked when I saw 1300 quid added to the bill for stuff I didn't want/hadn't asked for though.
In the end the car was knocked down a bit and one of the packages thrown in 'for free', I guess this is all about commission.
Asides from this it was a good buying experience with a salesman who obviously had a lot of love for the product he was selling. This is probably why I'm not more aggrieved by the add-ons.
Deva Link said:
Hence you get treated like st if you're buying a car for cash.
Even my daughter noticed in the Golf purchase that the car became almost irrelevant - it really is just a means of being able to flog you finance and insurance etc.
I wonder if dealer management realise how much this pisses off customers?
The alternative for a main dealer is not to bother and have lots of lovely happy customers who in turn make the dealership no money.t if you're buying a car for cash.Even my daughter noticed in the Golf purchase that the car became almost irrelevant - it really is just a means of being able to flog you finance and insurance etc.
I wonder if dealer management realise how much this pisses off customers?
Did it piss her off enough to not buy the car? Dealerships make much more money from this approach than they lose through people being pissed off.
There is a flip side to the accusation that dealers present finance figures even when customers say that they are paying cash.
The reason is that the public have been brainwashed into saying that they are paying cash as this will get them a better deal. Figures support the theory that 85% + of vehicles are bought using borrowed money - this supports the argument that many people who say that they are paying cash are not actually paying cash, they are paying for the car using money borrowed elsewhere.
Many customers are pleasantly surprised at how competitive dealer finance can be when compared to whats available on the high street.
As for including insurance products being added on - if anyone is to blame its the FSA. If a dealer has a range of products available they are breaking the law if they do not offer products that are deemed to be suitable for the customer and that the customer / vehicle is eligible for. Dealers face unlimited fines if they are deemed to have products available that were not offered to suitable / eligible customers / vehicles.
The reason is that the public have been brainwashed into saying that they are paying cash as this will get them a better deal. Figures support the theory that 85% + of vehicles are bought using borrowed money - this supports the argument that many people who say that they are paying cash are not actually paying cash, they are paying for the car using money borrowed elsewhere.
Many customers are pleasantly surprised at how competitive dealer finance can be when compared to whats available on the high street.
As for including insurance products being added on - if anyone is to blame its the FSA. If a dealer has a range of products available they are breaking the law if they do not offer products that are deemed to be suitable for the customer and that the customer / vehicle is eligible for. Dealers face unlimited fines if they are deemed to have products available that were not offered to suitable / eligible customers / vehicles.
Edited by andy665 on Tuesday 26th July 11:08
andy665 said:
As for including insurance products being added on - if anyone is to blame its the FSA. If a dealer has a range of products available they are breaking the law if they do not offer products that are deemed to be suitable for the customer and that the customer / vehicle is eligible for. Dealers face unlimited fines if they are deemed to have products available that were not offered to suitable / eligible customers / vehicles.
Is it really illegal to offer no product? I can understand the need to require that the best product is offered, just seems odd that a product must be offered even if the customer says they don't want one.andy665 said:
As for including insurance products being added on - if anyone is to blame its the FSA. If a dealer has a range of products available they are breaking the law if they do not offer products that are deemed to be suitable for the customer and that the customer / vehicle is eligible for. Dealers face unlimited fines if they are deemed to have products available that were not offered to suitable / eligible customers / vehicles.
Absolutely. I bought a used car (for cash) from a main dealer (Honda) and was taken to a seperate room and 'grilled' for nearly 15 minutes, despite me making it crystal clear that I would not be spending any more money.They have to do it by law - I asked what would happen if I said I just want the car and go, they said I couldn't buy the car.
Everytine I go anywhere near a main dealer it simply reminds me to go to the auctions next time, it's gotta be easier.
andy665 said:
I'd say average front end profit is anything from £700 for the more volume brands and circa £1500 - 3500 for the more "premium" brands
Really? Thats not what I found from my years selling various brands. At BEST some of the mega expensive stuff might get into four figures, but I know for a fact when I was selling Citroens, a boggo c1 has about £30 of chassis profit in it! Chassis profit barely comes into it anymore due to people wanting discounts on the cars they buy. I got out of the business as I was fed up living on pure fear that if we didnt hit bonus every month there was a good chance they wouldnt open the doors for the next month, it can be that tight!Also the brands seem to enjoy setting extra hurdles over which you have to jump to get the bonus. Its not all about car sales now as has been pointed out, they want finance sold, certain dealership standards maintained and even mystery shop phone calls can dent the bonus before youve even earned it.
So when your sat there getting annoyed at the salesman for pushing GAP, paint protection and their finance package, remember its THE BRAND pushing that, most salesmen I know would rather just sell the metal than all the rest, but that wont pay the bills or satisfy the brands.
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