The dealership goes below employee for actual employees. Employee pricing and supplier pricing are just a set monetary reimbursement to the dealership for selling at or below those listed price for each program.
And yes, there is extra CCR for employees. It ranges from $2,000 to $5,000 depending on the model.
How can that be if the advertisements say “you pay what employees pay and not a penny more?”
Because that is technically the selling price that employees pay, it’s at the dealerships discretion whether or not they want to go further in the red for an employee because they make the store thousands on a daily basis. Not saying there’s actually a lower employee price, but dealers are allowed to go lower if they chose to do so. In my experience they will only do it for dealership employees (if your ownership isn’t )
I am amazed that so many people think the dealership can go as low as they want too. Generally speaking the dealership owns said vehicle for the invoice cost and typically rebates fall below that invoice, so the dealership will pay more for you on a vehicle. GM does reimburse the rebate amount so unless the dealership has flex cash they will be taking a loss to get you your ripping deal. Understand that you go to your job to make a living but so does the employee’s at the dealership, mainly the salesman who works so hard to sell you a vehicle so if the dealership takes a loss that salesman made no money. If you owned a business and made no money because your customers demanded you sell them something for less than what you bought if for you wouldn’t be a happy camper. Sure everyone wants a good deal but there’s not as much mark up as everyone thinks there is.
Just to be clear, your assertion is that a vehicle sold at invoice has no income streams for the dealership and the salesman gets paid nothing for the deal?
Don’t forget about 3% holdback, and whatever CSI/volume/misc bonus money. Invoice doesn’t really mean much
Oh, it is a sight! All the employees at the dealership are holding out their hands in front of me saying “please, sir, may I have some more?” And I say NO. And I slap them around some. I then have to waterboard the F&I person till they sign the contract that I drew up myself.
The GM sometimes tries to give me guff, but I smash his nose with the butt of my gun. Everybody jumps. Blood squirts everywhere. Nobody says squat after that. I may get some woman talking smack, but I give her a look like she’s next. She says nothing after that.
I’m hungry. I’m gonna get a taco.
This story has just enough detail to be concerning.
My assertion is that if you haggle to the point the dealership is not making any money on the front end and is a break even there is a chance that salesman didn’t make any money for their services of helping said customer, some salesmen are only paid on the front end gross not holdback, warranties, accessories etc. If its a new guy they for sure aren’t making money on CSI and misc money from GM. I never said that the dealership doesn’t make money there’s a lot of ways a dealership can make money. It’s just food for thought when you’re trying to get the best deal.
Salesman don’t make money selling new cars, most of them are mini deals. They do hit volume bonuses though. Many new cars, even sold at sticker are mini deals for the salesperson
I’ve posted in this thread before that I negotiated an additional 1k outside of GMS and my incentives to close the deal on my V. Dno why people keep saying that employee price and applicable rebates is the final number.
If a sales person sells a car, they get paid regardless of profit. Every dealer has a “mini” or minimum commission. So I could sell a car for free and still get paid. The mini varies from dealer to dealer and I have seen them as a low as $50/car to $300/car. Obviously as the profit increases, so does the commission since it is usually a percent of the profit. Every dealer play plan differs (some pay on holdback and FI but most don’t) and no one likes a mini, but the salesperson is always paid something when a car is sold. On the other hand, managers will actually get paid less since their commission is a percent of the sale’s total profit. So a loser deal for them might actually be a few dollars to a few hundred off their paycheck.
This is brand dependent - at JLR less than 30% of my deals were minis. I’d say 50% at Chevy are minis for my salespeople.
If its a brand like Kia / Hyundai / Toyota its probably closer to 95% but again completely dependent on payplan.
@joeblogs, what was your pay plan?
Mine was ridiculous, I was a sales manager/sales person, was getting paid on the 3% holdback and the secret 1%, $2000/mo salary plus there was money back from Saab for every car sold, minimum of $100. Any of the non certified sales people I went ahead and swallowed their Saab money too. Oh and volume bonuses. Desked all my own deals. Percent was 30% of gross profit and the packs were very low.
But then 2007 came and everything went in the toilet and I bailed on the car business and got into airport operations. Now I almost make as much money as back in the day, only work 4 days a week and have a decent retirement/pension
Dealer here: In response to the original posters question, the dealer is probably reffering to the program rules. GM prohibits the sale of vehicles below Employee Price on some models until later in the production. It doesnt mean that the dealer cant sell for lower. It means that if the dealer does, they will not recieve the Employee Price assistance from GM. On a $6000 Employee Price Discount, GM will reimburse the dealer around $2500.
Excerpt from eligible for below program:
IF THE DEALER ELECTS TO PARTICIPATE, ELIGIBLE PARTICIPANTS CAN PURCHASE OR LEASE ELIGIBLE GM VEHICLES AT THE PRICES DESCRIBED BELOW. IN ALL CASES, DEALER INSTALLED OPTIONS THAT ARE NOT ON THE VEHICLE INVOICE, GM PROTECTION PLANS, ETC. ARE IN ADDITION TO THESE PRICES AND ARE NEGOTIATED BY
THE DEALER AND CUSTOMER.
A. NEW UNITS (INCLUDING UNITS REPORTED INTO DEMO SERVICE THAT HAVE A MAXIMUM OF 2,499 MILES, EXCLUDING UNITS UPFITTED BY AN APPROVED UPFITTER), ARE DELIVERED AT OR BELOW THE AMOUNT. DISPLAYED IN THE “EMPLOY” FIELD ON THE GM VEHICLE INVOICE.
Exerpt from non-eligible:
IF THE DEALER ELECTS TO PARTICIPATE, ELIGIBLE PARTICIPANTS CAN PURCHASE OR LEASE ELIGIBLE GM VEHICLES AT THE PRICES DESCRIBED BELOW. IN ALL CASES, DEALER INSTALLED OPTIONS THAT ARE NOT ON THE VEHICLE INVOICE, GM PROTECTION PLANS, ETC. ARE IN ADDITION TO THESE PRICES AND ARE NEGOTIATED BY THE DEALER AND CUSTOMER.
A. NEW UNITS (INCLUDING UNITS REPORTED INTO DEMO SERVICE THAT HAVE A MAXIMUM OF 2,499 MILES, EXCLUDING UNITS UPFITTED BY AN APPROVED UPFITTER), ARE DELIVERED AT THE AMOUNT DISPLAYED IN THE “EMPLOY” FIELD ON THE GM VEHICLE INVOICE.
You should notice the “at or below” verbaige in the eligible example. So to answer your question directly. Yes a dealer can sell below. But they have no incentive to when the model is being restricted. And they are not lying when they say they cant allow you to use the Employee Price incentive below employee price in some cases.
Eligibilty for below usually moves with the market. As days supply of a vehicle moves upward. The rules relax.
Ask to see the program guidleines to verify.