I'm currently in the process of buying a 2017 challenger from dodge and want to know if what they are telling me is true. Apperently this is how it goes,the salesman told me they don't make money from the price of the cars they sell it at, but instead how many cars they sell.
I'm not quite sure this is true and this information is important to me since I want to lower down the price from 27k to 23k.Also how low should I got with the negotiation on the price.
Pat F852017-11-23T13:05:36Z
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When you get some time, Miguel, listen to this show I'm posting a link to. A radio station spent one month at Town & Country Jeep, Chrysler, Dodge, in Long Island, documenting vehicle sales and the sales staff. Since all Jeep, Chrysler, Dodge dealerships are treated the same by their parent company, this program will especially informative for you, and answer your questions, from an insiders look .
Salesmen tend to lie. But, some dealers do pay on shear numbers of cars sold only. According to what I read on here.
When I was a dealer, 15+ years ago, almost all were on some form of commission. The more the dealership makes, the more the salesman makes. And that's probably the norm in many areas.
That's why stuff like Extended warranties are such ripoffs. Nearly all profit and they warranty very little in reality. They are at least 50% profit for the dealer who shares 1/3 to 1/2 with the salesman.
When I was a dealer, salesman tended to make 25% of the profit on a used car after a "pack" which was intended to cover their overhead.
Way back when, if they paid $8,000 for a car and spent $500 fixing & cleaning for sale, the salesman would get 25% of the profit over $9,000. Excluding doc fees. Back then, the dealer charged a $500 pack. I wouldn't be surprised if that's not $1000+ by now.
The average salesman, back then, sold about 5.5 cars a month. And many didn't sell that many and ended up quitting or getting encouraged to find other work. (They would outright fire you if necessary, particularly if you ask about min wage and time and a half. (If you cant earn your wage, you wont be around long)
Now, in really high volume dealerships, it might be different. And I'm pretty sure places like CarMax don't pay commission. Or they didn't used to. I cant imagine the wage is very good at all.
Assume anything a car salesman tells you during the car buying process is complete bullshit.
Of course they make money, on every single car they sell. If they lost money on the sale of every car they sold they wouldn't be in business very long.
Having said that they DO NOT make a lot of money per unit sold. There isn't a lot of markup on brand new cars. So they have to rely on large volume of sales to make their money.
You should not expect a $4000 discount on your car. That is way too aggressive. 10%-15% maybe but not 20% off.
How old are you? How many cars have you purchased though private sales? How many cars have you purchased at a dealer? New or Used? If used how many miles? Trim level? All good info to post. Setting that aside, I love it when the dealer starts explaining the commission system to the customer, I really, really find it amazing, and the fact for some reason it seems to work. There is some psychology there that they are trying to say....We are partners here, let me give you all these details. Sure I hope everyone I do business with makes money, but when my cable company doubled my rate in 12 months they did not act like we were partners. If the dealer overcharges you and you get a bad deal on the loan, they really don t care, they just want to sell the car. The way the dealer chooses to manage it commission process does not matter to you, it is like if the sales guy wanted to spend 20 minutes explaining their heath car employee options or how they manage their employee schedules, not germane to your purchase. 1. Shop and price the car at 3+ dealers. The same trim level. Go back and forth to get the best price. 2. Let them know you are shopping. 3. Ask for a written deal sheet with all the details of the transaction. When you get the contract, read it WORD FOR WORD, take to a private room, without the F&I guy hovering over you and trying to rush you, and say...Oh it is just a contract, sign here, I have other customers waiting. Fine go take care of them, I will let you know when I am finished reading the contract. If the contract varies from the deal sheet then reject the deal and tell them to re-work it and get it right. 4. Never allow the dealer to front you a vehicle. You can do a search that.