Confessions of a Car Salesman
Chandler Phillips recently went undercover for Edmunds.com, the car buying website, to provide a glimpse into the secret world of car sales. He was hired as a salesman at an LA dealership, and provides these insights into this shadowy world.
"At times Michael became very excited as he thought of new things to teach me. At one point he said, "Oh! This is a good one! This is how you steal the trade-in." He looked around quickly to make sure no one overheard him. "When you're getting the numbers from the desk, they'll ask if the customer has a trade-in. Say it's a '95 Ford Taurus. And say you took it to the used car manager and he evaluated it and said he would pay four grand for it. If you can get the trade for only three, that's a grand extra in profit.
"So what you do is this," Michael pretended to pick up the phone again, "you ask the desk, 'What did we get for the last three Tauruses at auction?' Then they'll give you some figures — they'll say, $1,923, $2,197 and $1,309. You don't have to say anything to the customer. But he sees you writing this down! And he's going, 'Holy crap! I thought my trade was worth $6,000.' Now it's easy to get it for $3,000. That's a grand extra in profit. And it's front-end money too!" (I later learned that front-end money was what our commissions were based on. Back-end money was made on interest, holdbacks and other elements of the deal.)
"At times Michael became very excited as he thought of new things to teach me. At one point he said, "Oh! This is a good one! This is how you steal the trade-in." He looked around quickly to make sure no one overheard him. "When you're getting the numbers from the desk, they'll ask if the customer has a trade-in. Say it's a '95 Ford Taurus. And say you took it to the used car manager and he evaluated it and said he would pay four grand for it. If you can get the trade for only three, that's a grand extra in profit.
"So what you do is this," Michael pretended to pick up the phone again, "you ask the desk, 'What did we get for the last three Tauruses at auction?' Then they'll give you some figures — they'll say, $1,923, $2,197 and $1,309. You don't have to say anything to the customer. But he sees you writing this down! And he's going, 'Holy crap! I thought my trade was worth $6,000.' Now it's easy to get it for $3,000. That's a grand extra in profit. And it's front-end money too!" (I later learned that front-end money was what our commissions were based on. Back-end money was made on interest, holdbacks and other elements of the deal.)
posted by Max Hartshorne at 5:40 PM
1 Comments:
The national average stint of car salespersons at a dealership is 4 months. The job has a high rate of burnout because it is so stressful. Others just simply don't make the grade and quit of their own accord or are made to. The majority of car salespeople have no regular salary, no benefits of any kind and have no job security. They can be fired at will by the dealership and they are made to sign a contract to this effect before hiring. Many are kept in the dark as to the formulae for their commissions. Knowing the formulae does not always help because the managers are not bound to it. Salespersons's earnings are entirely at the mercy and whim of the car dealership and their managers. The hours are long, with 10 hours on the lot as average. They stand outdoors in the heat and insects of summer and in the cold of winter. They endure insults, boorish behavior and even threats of physical violence from many customers, some of whom are even supposed to be ladies. In other words, car salespersons are among the most exploited workers in America save for Mexican fruit and vegetable pickers.
Don't blame the dealers either until you have made an exhaustive study of their profit and loss statements for at least three years. I really don't understand what you people are crying about because I see you buy lots of stuff at outrageous prices all the time. Like, when was the last time you paid almost five bucks for popcorn at the movies which actually costs only 50 cents? That's a 1000 per cent overprice right there. Be fair, be honest with yourself. In this country, doctors, lawyers, mechanics, plumbers, house renovators, real estate salesmen, everybody gouges someone else. You are both a gouger and a gougee so don't talk as if you are a Caesar's wife when you talk about car sales people. Oh, you are an employee on a fixed salary are you? Well, employees, especially government employees are the worst thieves I have ever seen stealing time, money and supplies from their organizations or the taxpayers all the time.
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