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Car Salesman makes $200,000 a year

In today's world the title of this post doesn't really happen anymore. The day's of car salesmen or women making big money are pretty much gone.

According to the Bureau of Labor the average car salesman makes $42,150 a year.

There is a trend in the car business to attempt to increase profit by lowering employee expenses (i.e. payroll). A lot of dealers are turning to a salary program. On this program sales people get paid a weekly salary and have to chase unit sales over profit. And, at the end of the month the salesperson will get paid a bonus on the number of units he/she sold.

Here is the good and bad of what we see in the industry at dealerships that utilize a salary program.

Good:
1) Dealer initially increases net profit

Bad:
1) After a few months the dealer's employee turn over rate goes up
2) Total profits go down
3) Unit sales go down (related to turn over)

That's right there is typically only 1 good factor for a dealer when utilizing a salary program for s…

Do you need GAP coverage?

This is a personal question. But, from a finance point of view banks and finance companies typically do not allow GAP to be written on a vehicle finance contract if the amount to finance is less than 80% of the vehicles value. This means that you had 20 to 30% down or an equivalent amount in equity in your trade in.

Even with this being said, for people who drive more miles year than the 15,000 miles a year norm, a case can be made for GAP as their vehicles will depreciated fast than normal. In this case, at your request for GAP, a dealer can contact the finance company and request an override on their amount to finance GAP policy minimum.