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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…

Buyer's Remorse

Buyer's remorse is common feeling after we make a purchase, but is there anything we can do about it?

In the car business there are little to no protections regarding buyer's remorse. There are some dealerships that provide a return policy, but the rules are very restrictive. When a vehicle is sold there are state documents and finance documents that have to be filed. When someone is allowed to return a vehicle the dealer must unwind the fillings and fiance contracts.

So let's look at what rights you might have. Not including a dealership return policy the only real right you have is a 3-day right of rescission, if it is even applicable.

The 3-day right of rescission, that everyone says is their right, is not actually a general right.

According to the FTC's "Cooling Off Rule":

"gives you a 3-day right to cancel a sale made at your home, workplace or dormitory, or at a seller’s temporary location, like a hotel or motel room, convention center, fairground or restaurant. It also applies when you invite a salesperson to make a presentation in your home. But not all sales are covered."

However there are exceptions to the rule, as seen here below:
 
Also exempt from the Cooling-Off Rule are sales that involve:
  • real estate, insurance, or securities;
  • automobiles, vans, trucks, or other motor vehicles sold at temporary locations if the seller has at least one permanent place of business;
  • arts or crafts sold at fairs or places like shopping malls, civic centers, and schools.

If your State Government has placed a 3-day right of rescission clause relating to vehicle purchases typically here is reality.

1) if you go to a car dealership and purchase the car on site, then there is no right granted under state law.
2) if the dealership salesperson delivers the vehicle to your home (at your request) and has you sign an off-site delivery form, then there is no right granted under state law.
3) if the dealership salesperson brings the car to your home and shows it to you and then brings the paperwork back to your home to purchase it (and you never walked into the dealership), then you may have a right to a 3-day rescission clause.

In short, an "off-site" delivery form can protect the dealer from a "Cooling Off Period" for the buyer.

Also, did you know that "purchases made entirely online, by mail, or telephone" do not qualify for a "Cooling Off Period" as stated by the FTC. So remember this if you purchase a vehicle on line and never go to the dealership.