By on May 12, 2017

Confident car dealer giving a handshake car showroom on the background, Image: stockasso/bigstock.com

I spent 33 years in the automobile business, the equivalent of 96 human years. Having worked for car dealerships, manufacturers, an auction house, and an auto finance company, I’m convinced there is no other industry that attracts such a diverse cast of characters. Many of them defied stereotypes: I met car sales people who were honest, ethical and hardworking. I also worked with senior executives of well-respected automobile companies who were total sleazebags.

Throughout the years, I kept meeting the same set of six people over and over. These are their stories. Their names have been changed to protect the guilty.

1. The rock star car salesperson who gets fired everywhere he works.

I first met “Perry” at a Honda dealership in Louisiana in 1986. A rotund enthusiastic person, Perry was one of the best sales people I’d ever seen. Stick him on any showroom floor and he would move 20 cars per month, every month. Customers absolutely adored him.

Perry would never last long at a store because he possessed an ability to piss off every one of his co-workers and managers. I’m not talking about the normal jealously by other sales people here. I’m talking about mild-mannered employees running into their general manager’s office and screaming, “Either Perry goes or I go!”

Perry was fired from one job shortly after he sold a car and took the deal into the F&I office and told the long-time finance director, “Don’t fuck this up!”

The car business being a small, inbred industry would result in me bumping into Perry several more times, once while he was selling Mercedes-Benz vehicles in Texas in 2003. I last heard he was at a luxury car dealership in Arizona in 2014.

Used Cars

2. The rock star car salesperson who should get fired, but doesn’t.

A fellow we’ll call “Reed” is a top salesperson at a West Coast dealership and is as big a pain in the ass to his peers as Perry. When his company opened a second same-franchise location across town, it was policy that there would be no cross-selling by sales people. Reed threatened to quit unless he was allowed to work customers at both stores and dealership management relented.

When Reed’s manager moaned to a management consultant that he could not terminate the prima donna “because he sells 30 cars a month,” the consultant responded, “You have two choices. Fire him and hire two salespeople who can each sell 15 cars per month or hire three who can each sell 10 a month.”

Reed is still employed there.

3. The dealership owners who know everything about the car business except what’s going on inside their own stores.

As an Automotive News junkie, I loved talking about the car biz with these dealer principals. They may only own a Chrysler franchise but can talk at length about what is going on at BMW and Toyota. Still, they’re a little hazy when asked about their salespeople’s incentive plans. These types like to volunteer to be on manufacturer’s dealer advisory boards. They also tend to have time-consuming high-dollar hobbies, be it a Beechcraft, boat or blackjack.

The problem is that there is a relationship between this type of mentally absent owner and employee theft. It sometimes seem like automobile dealers are the easiest companies to steal from. Recent stories about millions of dollars in employee embezzlement can be found here and here and here.

I was once calling on such a dealer principal when he discovered that his lowly lot attendant supervisor had swiped $1.1 million dollars from his store by creating and submitting phony time cards to the accounting office. Curiously, in this case and most of the others, it seemed the managers who should have caught the capers were never terminated.

I wonder if this dealer principal told the FBI when they were investigating the case, “Yeah, but I just read in ‘WardsAuto Dealer’ about the Chevy store in Buffalo who lost two million dollars to their title clerk … ”

4. The sleazy general managers of publicly held dealerships

The rise of large, publicly held dealer groups — like Penske, Group 1 and Sonic — has not been looked upon kindly by car companies. Automakers want their franchised dealers to have an owner on the premises, someone who can solve customer issues face-to-face, which does not happen with the “publics.” Instead, each store has a revolving door of general managers, whose “owner” — the dealer group’s headquarters — is typically hundreds of miles away. This can lead to problems.

Let’s use one group as an example: an anonymous dealer group that sells autos all over the nation. I have called on five of its dealerships. This public was without peer when it came to dirtbag general managers.

Let’s start with a high-line GM we will call “Duck.” Despite me being a supposed expert on the subject of corruption in the car business, he taught me a new trick. While attending a golf tournament put on by his captive finance bank, Duck thought he would curry the bank’s favor in hopes of them approving more of his credit-challenged customers. He proceeded to slip $1,000 in cash into the gym bag of one of the bank’s credit analysts. The analyst reported the attempted bribe, but nothing came of it as Duck was later promoted to a Regional Manager of the dealer group.

In another case, an automotive finance company hired one of the auto group’s Regional Finance Managers and terminated him three weeks later because it turned out he a was a serial sexual harasser, and by all accounts his former employer turned a blind eye to his activities.

The topper was the general manager in the group whose auto manufacturer awarded him a free trip to the Masters golf tournament. Like a lot of Masters corporate attendees, he was housed in a luxury private home, which he and his guest proceeded to trash after a night of drinking. As you might have guessed by now, he kept his job.

Want job security in the car business? Join a publicly held dealer group.

5. The car company sales executive who has zero enthusiasm for cars

When I was hired by the sales division of American Honda, I assumed I’d be joining a colony of car nuts like myself.

I was wrong.

Naturally, my peers all possessed great enthusiasm and product knowledge about Honda vehicles, but there were very few true automobile aficionados among them. The good thing about Honda was their motorcycle division folks were all gearheads and a high percentage of the engineering staff had something interesting parked in their garages. I’d later learn this phenomenon is common at most automobile companies.

I experienced an exception to this rule during the time my employer Mercedes-Benz owned Chrysler. We attended a meeting at DaimlerChrysler headquarters in Detroit on the day of its annual employee car show. There were a couple hundred vintage Chrysler cars on display, from Chargers and SuperBirds to Valiants and Belvederes. Some of their old timers showed pristine American Motors vehicles. We also toured the now-defunct Walter P. Chrysler Museum, but it did not compare to the employee extravaganza.

There were some serious automobile enthusiasts at Chrysler back then.

nissan-dealer-of-the-year-courtesy-newtonnissan-com

6. The dealership owners who take wonderful care of their employees and customers

These folks at Newton Nissan of Gallatin, Tennessee, are celebrating being named “#1 Nissan Dealer in America” in 2017 for the second consecutive year by shoppers on customer satisfaction website DealerRater. I don’t know this store, but I guarantee it’s a great place to work.

There is no question that happy employees make for happy customers.

I know one Midwest store where the owner takes his managers on quarterly trips, be it to the Final Four basketball tourney, Cabo or just renting out a local restaurant. Needless to say that dealer has low employee turnover, high customer satisfaction ratings and makes a ton of money.

I have worked with numerous such stores, but they sadly only represent about 15 percent of the U.S. dealer body. The rest are content with high turnover, particularly among salespeople, and their managers make a sport out of cutting pay plans. (And with the right franchise and/or location, it is easy to see why. If the dealership is profiting a couple million dollars a year, owners feel there’s no need for any strategy to attract and keep top-notch employees.)

There’s a crisis brewing in the car business of dealers not being able to find qualified technicians to go along with the continuing challenge of attracting good salespeople. In addition, new car sales are forecasted to fall from their current torrent pace. The result of all this will be a widening gap in sales and profitability between the dealerships who have coddled their team members and guests over the years and those who have not.

And, like in the last recession, some of those dealerships will not survive.

[Images: stockasso/Bigstock.com, Columbia Pictures, Newton Nissan]

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118 Comments on “The Six People You Meet In the Car Business...”


  • avatar
    JimZ

    “There were some serious automobile enthusiasts at Chrysler back then.”

    too bad years of being sh*t on by Stuttgart made them all leave.

    • 0 avatar
      Kyree S. Williams

      That’s the truth. Chrysler was actually doing extremely well before the Merger of Equals, and very poorly by the end of it. Daimler wanted Chrysler’s capital, and by George, they got it. But in doing so, they eliminated much of the expertise and knowledge base on the Chrysler side and left the company a shell of its former self by 2008, just ten years later. In return, Chrysler got some cast-off Daimler technology and engineering, some of which it continues to employ.

      • 0 avatar
        28-Cars-Later

        Business wise who knows what Chrysler could have done, but it was not all success. Pre-Daimler, Chrysler graced us with the 2.7, Neon, and the JA Cloud Cars all of which were largely negative. Chrysler also benefited greatly from the purchase of AMC, which brought Jeep Cherokee/Wrangler, the immortal AMC 4.0, and Renault/Eagle which later formed the basis of LH platform. Chrysler’s main success on its own in the post 1989 period was the Gen 2 Dodge Ram, the development of their SOHC V6 family, and the fuel injected LA (magnum) engines.

        https://en.wikipedia.org/wiki/Ram_Pickup

        https://en.wikipedia.org/wiki/Chrysler_LH_engine

        https://en.wikipedia.org/wiki/Chrysler_JA_platform

        https://en.wikipedia.org/wiki/Chrysler_LA_engine#Magnum_3.9L

        • 0 avatar
          Mandalorian

          Eh, Chrysler was sort of living on borrowed time at the time of the merger. They were still using a 3-Speed automatic in the Neon and Caravan for crying out loud. They had some bright spots in SUVs, Trucks, and trademark vans, but the car line up was largely mediocre rental grade material.

  • avatar
    brentrn

    Where would a manufacturer-owned store like Tesla come into this list? Are they better or worse having to answer directly to headquarters?

  • avatar
    FreedMike

    Why is it that every single car salesman shown in stock photos just can’t dress himself?

    Tighten up the tie, bro!

    • 0 avatar
      whynot

      They are fun! They are casual! They are just like you!

      • 0 avatar
        Kyree S. Williams

        When my best friend bought his lightly pre-owned 2013 Fusion Energi (which has since been traded for a 2017 Volt), the salesman was bragging to us about his Lamborghini Gallardo. Not that I was impressed, but I’d have thought he was lying, although his manager went along with the story and mentioned the Lamborghini without prompt from the salesman. Either way, it certainly wouldn’t have endeared the salesman to us, especially as he was trying to scam my friend into paying extra for the *standard* 120V charger.

    • 0 avatar
      Corey Lewis

      First thing I noticed. That man is not presentable. I wouldn’t even walk through the grocery store with my tie like that.

    • 0 avatar
      Lorenzo

      The first photo is a still from the movie Used Cars, starring Kurt Russell. The second photo isn’t stock either, but the actual dealership staff, including back-office people who don’t deal with the public, not just the salesmen. But I’ll go along with @whynot.

  • avatar
    sportyaccordy

    This is why I love this website. I love reading Tim’s sales reports, and articles like this help remind us how the sausage is made. It’s a shame Bark M left in a huff, as I’d really love more insight into the franchise side of the business. After all, that’s where the cars are actually sold, and who is actually buying cars from manufacturers. Please keep making this kind of content.

  • avatar
    -Nate

    *SO* true ! .
    .
    I worked for now long defunct Natzel Oldsmobile and every negative stereotype worked there, all fighting each other and stabbing in the back, any one who actually tried to be helpful and do a good job .
    .
    Other Dealers were similar but that one was just horrible so I bailed after three months .
    .
    I know this article will bring many dealer stories, can’t wait .
    .

    -Nate

  • avatar
    DenverMike

    All new car dealers are in a position where they can rape freely, with zero repercussions. They know even if you sue and win, you still lose. Most victims don’t realize they’ve been screwed.

    No matter how bad their reputations gets, they’re still making millions.

    But I got to know some real characters working the new car dealer circus. That’s the only part I truly miss.

    • 0 avatar
      Lorenzo

      Some of the mechanics who are real characters go independent and entertain their customers for much less money. My regular mechanic is one, who treats every customer in the end with an unique diatribe about “pinko commie preverts” running the government, the DMV, the Bureau of Auto Repair, and even the cable company. It’s worth the extra five minutes before he gives me my keys back.

  • avatar
    ajla

    Any Florida new car dealer with a doc fee under $400 and that does not tack things like pinstripes, wheel locks, nitrogen tires, and “summer protection” onto every vehicle starts off way ahead for me.

    And if an F&I person ever accepts a “no thanks” the first time I decline the Triple-Diamond Platinum Protection Package, I’d be so impressed I think I’d actually buy paint protection or a 24 month maintenance contract or something.

  • avatar
    dukeisduke

    That lede photo:

    “First, where’s the hand sanitizer?”

    Or, I want to punch his face in.

  • avatar
    dukeisduke

    One of the local TV stations here (WFAA, the ABC affiliate) ran a story at 10 o’clock last night about BHPH lots installing GPS tracker on the hoopties they sell, so they can pull them back if the buyers don’t meet their sometimes onerous contract requirements, like twice-weekly installments (WTF?), and having to pay in person at the dealership, and sometimes in cash only. One lady had her car repo’d because she cussed out someone at the dealer over the phone, when the car she bought broke down, and they wouldn’t do respond to her complaints. They claimed that her tirade “put the collateral in jeopardy”. Riiiiiight.

    http://www.wfaa.com/news/which-auto-dealers-are-using-military-technology-to-watch-your-every-move/439039530

    Steve, has TTAC done a story on used car lots and GPS trackers?

    • 0 avatar
      87 Morgan

      Until you have worked in the BHPH industry….the customers are worse than the dealers. Seriously, if the only way someone will give you credit is if you A. Pay weekly, in cash, & in person and B. In order to get condition A you have to have a GPS monitor installed in the car to ensure A happens. You are a credit criminal, and have no compunction against buying something on credit and never paying for it.

      • 0 avatar
        JimZ

        people have had their credit ratings trashed by medical debt. but go ahead and lump them in as criminals.

        • 0 avatar
          Lou_BC

          JimZ – at least incarcerated people get free health care, free access to fitness equipment, 3 meals a day and a roof over their heads.

        • 0 avatar
          87 Morgan

          JimZ, people with medical debt still get bought by a conventional bank. Albeit at a higher % rate, but they don’t need BHPH.

          BHPH serves the thrice repo’d and on crowd.

          Their exists a whole culture of credit bandits in this country who are far beyond one or two bad events occurring in their life. Serial poor decision makers.

          • 0 avatar
            FreedMike

            This.

            I’m in mortgage financing and medical collections will affect your rate. But they won’t get you declined unless we’re talking about some exorbitant figure that a collection agency would turn into a lien against your home. And in that case, you have no business buying a house in the first place.

            After 16 years doing this, I can spot a deadbeat almost immediately. Looked at a loan not too long ago for a guy with millions in the bank whose AMEX bill went to collections. Twice. To the tune of over $50,000. No excuse for that kind of bulls**t.

          • 0 avatar
            28-Cars-Later

            The check is in the mail.

          • 0 avatar
            Lou_BC

            “The check is in the mail.”

            I’ll respect you in the morning (because I usually sleep past noon)

        • 0 avatar
          Dawnrazor

          If I am not mistaken, all three of the credit bureaus have “auto-enhanced” alternative scoring algorithms available which are specifically tailored to make it easier to approve a car loan. These methods place less weight on non-automotive related debt/collections/repos (especially medical) and focus more directly on the vehicle loan history (it’s even possible to score reasonably well with a history of bankruptcy, as long as an auto loan or lease was not involved).

          I understand some people draw the short straw and end up in crises through no fault of their own, but these individuals are in a small minority. The brutal truth is that the majority of the people who have no options other than BHPH do in fact have a history of irresponsibly using others’ money at best (and at worst, a history of willfully refusing to satisfy their obligations).

          Of course, this is not to give a free pass to the BHPH industry. They are mostly despicable and morally bankrupt and this won’t change anytime soon, but when they are the only ones willing to extend the credit, they are in the position of power and can dictate whatever terms they wish. The entire BHPH sector is a good example of “no honor among thieves”, and in many cases both parties probably deserve each other.

          • 0 avatar
            highdesertcat

            BHPH serves a purpose, especially in illegal alien communities, like where I live.

            If an American citizen has to resort to BHPH, they are indigent and in dire straits with an abominable credit history.

      • 0 avatar
        3XC

        I worked in collections for 5 years, collecting government debts for a State agency. You are spot on accurate.

        The unusual circumstances of my job allowed me to see a particular debtor’s employment situation, including wages, job histories, tax returns, and child support (CS enforcement a big part of the job). It was not unusual at all to find people who had a 150k+ annual income who habitually did not pay their car insurance, nor the fines imposed on them for driving without insurance.

        One local radio DJ made 225k a year and didn’t have insurance for months on his expensive Audi. Racked up fines of around 1000 dollars for driving uninsured. Wanted to enter into a monthly payment agreement with the state to repay this fine. Did not make a single monthly payment. Mind you, these are 100 dollar monthly payments on a post-tax monthly income of 12,000+ dollars.

        Inability to pay is too often conflated with unwillingness to pay. Yes, these people are deadbeats in the truest sense of the word. In an age of automatic, recurring electronic payments, you have to go out of your way to avoid payment on many of these bills (utility, insurance, etc.)

        It is a moral failing.

      • 0 avatar
        dukeisduke

        I don’t have a problem with BHPH lots and subprime loans. It’s just even on weekly payments, people should have a one-or two-day grace period – the story cites cases where the payment was due on Friday, but the buyers couldn’t make it in on Friday, then showed up in person Saturday with the cash, and had their ride repo’d.

        Also, paying $9000 down on a $10,000 car, and then having the car repo’d and losing that $9000 is ridiculous.

  • avatar
    raph

    #3 Reminds me of a fencing company one of my buddies works at. A family started business that they let a “trusted” employee take over. I keep wondering if he will ever get caught or make it to the finish line and take his shady management to the grave?

  • avatar
    PrincipalDan

    “The analyst reported the attempted bribe, but nothing came of it as Duck was later promoted to a Regional Manager of the dealer group.”

    He shows initiative. How can I fire him?

    “The car company sales executive who has zero enthusiasm for cars.”

    Those are the guys I expect to run into at Carmax. College kids who are just trying to make a few bucks for pizza, beer, and that dang $300 textbook.

    Sadly I’ve run into one at the local Buick/GMC store. Sadly because his family has been in the business a long time. His enthusiasm basically ends at resale values and knowing Northstar BAD!

    • 0 avatar
      JimZ

      “Those are the guys I expect to run into at Carmax. College kids who are just trying to make a few bucks for pizza, beer, and that dang $300 textbook.”

      I’ve seen a place like that. There’s no CarMax in my area, but there is a large (LARGE) corporation which owns one or more dealerships for pretty much every car brand in existence. They also have a big “overflow” dealer for their used cars; basically anything used they take in which is too good for auction but not to place on a specific dealer’s lot. I went there looking for a truck (which was listed as being at a specific dealer, not the overflow) and when I got there it was staffed by exactly the people you describe. Every one I saw was a frat-boyish know-nothing college kid, and the sales manager was every used car salesman stereotype all together. High-tailed it out of there fast.

    • 0 avatar
      Syke

      “The car company sales executive who has zero enthusiasm for cars.”

      I knew that kind of person very well. He was my father. Started selling Chevrolets in 1940, off 1942-45 for military service (in a unit that consisted entirely of Chevrolet salesmen out of the Pittsburgh zone), returned to the same dealership upon his discharge, became new car manager by 1950, upon the dealership being sold to a chain (! – yes in the early 1950’s, but a lot different than what a chain is now) became the franchise manager until his leaving in October of 1965.

      He knew his Chevrolets, was as honest as a car dealer could be in the 1950’s (devout Byzantine Catholic, hard and fast believer that how he lived his life would affect what happened to him after death), but his total enthusiasm for cars was as units to be sold, and supporting his car-crazy son’s enthusiasm. Other than that, as he finally told me on his death bed (we were having one of our usual conversations about cars he sold that he should have kept), “Son, they were units to be sold. And if they weren’t sold, I was being killed by the floor planning.”

      He did muster enough enthusiasm to swallow his misgivings and buy his son a 1937 Buick Special as his first car, so I could get involved in the local AACA chapter. And he learned enough about the value to antique cars that he supported me in a four year effort to buy the 1953 Corvette I had ridden in as a three year old (never did get it), and actually considered buying his old carburetor man’s 1936 Cord 810 when it came up for sale (in the end he couldn’t bring himself to pay market value of what a restored Cord was bringing by the late 80’s).

      But cars, they were units to be sold. Just like refrigerators, sofas, houses, etc. Dad was a salesman, not a car guy. Given the choice of working for Bethlehem Steel in Johnstown, or selling, he chose the latter as being easier and more profitable. And cars were about the most profitable item you could sell back then. Chevrolet sold easier and brought in better return than just about any other brand back in those days. Thus my dad’s 50 year loyalty to the brand.

      This isn’t an odd attitude. At the Honda/Yamaha/Can-Am/Sea Doo shop where I still work part time, the owner’s interest is personal watercraft, the manager (his son) doesn’t even have a motorcycle endorsement on his license, and there’s only three of us out of 35 or so employees who ride to work on a daily basis. An only one of the three regularly rides either a Honda or Yamaha.

      They’re units to be sold. Period.

      • 0 avatar
        PrincipalDan

        @Syke – I sold Men’s Dress Shoes in college as a part time job. I got to know my product even though it was just a paycheck and just a tiny little 1% commission attached to it. (In those days the guys selling shoes at Sears got a 3% commission – just for comparison.)

        My disappointment likely stems from the fact that this is a 3rd/4th generation dealership and the current oldest participating family members seem to have that enthusiasm – at least for the GMC side of the business. The former showroom (now housing the parts department) is filled with restored old GMCs from Jimmys to pickups, some restored by the local high school auto shop classes as a way of the dealer supporting the local schools.

        When the current generation seems to be more enthusiastic about the lifestyle that the business affords rather than the product, it saddens me.

      • 0 avatar
        threeer

        Yeah, that was the shocker I came to realize when I interviewed at a local dealership years ago.

        An older couple had called the owner of the dealership after I ran into them one weekend simply walking the lot (Honda). I was doing what I loved to do…look at cars. They had questions that Sunday and there was no dealer on station, as this particular place was closed on Sundays. Being the very knowledgeable car-guy that I am, I went over many different models on the lot with them, and they seemed to be pleased enough with my time and attention that they called the owner the very next day and told them that they needed to offer me a job.

        Come the day of the interview, I was smacked hard with the reality that being a certified carnut did exactly bubkus for me in the world of sales. Most folks on the floor knew *just* enough about Honda’s products to be able to sell them, which wasn’t that hard given how popular Honda is/was…the cars virtually sold themselves. It was more about the “art of the sale” and the games played, which was later confirmed to me when I shadowed a relatively successful small specialty dealership in South Carolina. It was both eye-opening and slightly nauseating to see how manipulative some of the tactics were, enough so that any ambition I thought I had about selling cars quickly vanished.

        Now, having said that, I did come across a few salespersons that were honestly doing a good job. Those folks got repeat business from the family. But the stereotypes exist for a reason, unfortunately.

  • avatar
    dukeisduke

    Steve, what was it that got No. 1 (“Perry”), fired? Did his making the customers happy cause the dealerships to lose money? I under the F&I manager didn’t like him, but the guy sounds like the ideal salesman.

    • 0 avatar
      notwhoithink

      Might be a good salesman, but if he is pissing off everyone at the company then eventually he’ll have to go. One day he’ll piss off someone who has more pull than his sales numbers (maybe the GM, maybe the GM’s golf buddy or mistress) and then the GM will send him packing. I get the impression that in a lot of dealerships car sales is like a pack of snarling wolves, all fighting over a fresh kill. But even in a pack of wolves there’s one wolf that nobody gets away with snapping at.

  • avatar
    Null Set

    These same people exist in most industries. I worked in software for 30 years – same there.

    • 0 avatar
      highdesertcat

      Yep. Despicable people exist everywhere.

      I have no doubt that some of the people who worked for me in my chosen line of work maintaining/repairing/refurbishing/restoring rental properties, thought I was a despicable character.

      The pressure in software development may have the same effect on otherwise decent people.

      But the stereotypes illustrated in this article exist in the real world, even in the dealerships owned by my brothers for more than three decades.

      They come. They go. But they all morph into some used-car stereotype at one point or another.

  • avatar
    ttacgreg

    The Newton Nissan story reminds me of something I read about the founders of Southwest Airlines management principles. Paraphrasing: your employees will treat your customers the way you treat your employees

    • 0 avatar
      dukeisduke

      Yeah, Herb Kelleher really set the tone for Southwest, and Gary Kelley is continuing it. In the wake of the fiasco at United where the bumped passenger was dragged off of a flight, SWA announced they’re instituting a zero overbooking policy, which should be 100 percent in force by July.

      • 0 avatar
        FreedMike

        Contrast that with Frontier, which has become a freakin’ dungeon.

      • 0 avatar
        Felix Hoenikker

        I just returned from a trip to Ireland on United. Right now, there is no better airline to fly. Free wine and beer and very friendly attendants. Good food too. “Here have some more free wine, and don’t be shy we have plenty”. And I was flying in economy class! Never seen that before.
        I didn’t choose the airline as the flight was a freebee for taking the trip before May 1.

    • 0 avatar
      Lou_BC

      @ttacgreg – I recall going to a leadership course facilitated by an ex-military officer. His belief was that the people on the front line were the most important ones in the corporate/military chain. They are the ones that make or break your operation.

    • 0 avatar
      la834

      The car itself in that Newton Nissan photo seems happy. Look at that smile!

  • avatar
    notwhoithink

    “I spent 33 years in the automobile business, the equivalent of 96 human years.”

    So the auto dealer to human year conversion rate is an oddly precise and and repeating decimal 1:2.9090909090909…

  • avatar
    brawnychicken333

    Being a car geek does NOT help sell cars to most people. The car geek salespeople are the ones that educate the consumer-who promptly buys the vehicle elsewhere. It’s been a long time since I sold cars-but it was true then and it’s true now. Happened to me on the consumer side a couple years ago. I even tried to buy the vehicle from the kid who educated me-but he just couldn’t put anything together.

    • 0 avatar
      danio3834

      It helps a great deal to be enthusiastic about what you sell. That enthusiasm can transfer. You just have to remember to A-B-C. Most Aspies can’t close a door.

      • 0 avatar
        brawnychicken333

        Enthusiasm matters way way more than skill or product knowledge. Enthusiasm about the products and about people. Knowing about compression ratios, how a CVT works, track ability, ground clearance, suspensions, etc, are utterly pointless. Find out what the customer cares about and demonstrate how your vehicle has those things. Oh, and they might not tell you what they actually care about-it’s your job to infer it.

  • avatar
    87 Morgan

    I too have spent a lifetime in the retail automotive business. The list is fairly accurate. I have reminded plenty of dealers and customers of the following: The retail auto business is one of the last place an individual with a 3rd grade education can make the same income as an MD. So, at time you don’t attract the cream of the crop.

    The 7th person is the old white guy who has been in the business since HS and is still pissed about the following: 1. No smoking at his desk 2. The internet, when is this fad ever going to end? 3. The end of use of the 4 square write up 4. Losing his demo back in 04′ after he wrecked while on a coke binge after a 4 car Saturday.

  • avatar
    Lou_BC

    The Principal of our local FCA dealer was the king of sleaze. He kept his job an incredibly long time because he was a son of one of the biggest shareholders i.e. one of the founders of the company. He always drove Lambo’s.
    He “left under mutually agreeable terms” after getting nailed by government for “misleading and deceptive sales and advertising practices” a second time. His collection of exotic cars all vanished with the exception of an older Porsche. it turned out the cars were all corporate demo’s.
    The owner of the GM/Ford/Honda dealer is also a son of big franchise chain but he isn’t a douche-bag.

  • avatar

    Newton Nissan is a good dealer.

    I don’t recognize a single face in the photo, must be their sales folks only. The guy I bought my LEAF from in 2011 is no longer there (good thing for Newton and their customers).

    I deal with service there, who are great and sometimes marketing, who are also great. Shame they didn’t make it into the photo.

  • avatar
    danio3834

    I could break down dealer principals/general managers into several of their own sub-categories.

    First Generation Bootstrapper: These are salt of the earth hard working guys who often worked their way up from the floor or shop to eventually own their dealer. An endangered species as the dealer groups buy up all the bigger stores. They still exist in smaller markets, and while are usually OK to deal with, they’re often set in their ways from decades gone by.

    The Son of a Dealer: Bootstrapper’s son/nephew/son in law. Too big for his britches and grew up with the dealer as his piggy bank. Might maintain the dealer, but doesn’t have the business sense or will to grow it. The dealer declines under his control and is eventually sold off to pay off gambling debts.

    The Puppet: Steve talked about the General Manager installed at a big dealer group point to “manage” it. Their tenures in a given location are generally short, and they have little accountability. They’re particularly frustrating to the manufacturer because they easily shuck responsibility for problems at the dealer as “group directives”. They don’t have much if any brand loyalty as they themselves often do not have skin in the franchise, though many groups will still give a General Manager DP small minority share. They’re most frustrating, disinterested people to deal with and will do the worst things imaginable to bump that gross as they live and die by any given month’s end.

    The Part-Timer/Absentee: When Bootstrapper or son of a dealer get tired of the day to day operations but don’t want to lose the cash flow. Spend 6 months a year in Naples or Lake Havasu. They’ll only show up or return your calls when the dealer is on fire. These are the guys that get stolen from most often. As long as there’s money still in the bank they don’t notice.

    • 0 avatar
      Steve Lynch

      Spot on.

      Most dealers’ offspring are as you describe or worse. On the other hand, some of the very best dealerships I know are run by dealer’s sons or daughters, but they number only a handful.

      • 0 avatar
        danio3834

        You’re right, they are out there and I know a few great ones. But they’re definitely the exception. I’ve often found that dealers want to pass on the business, but their good level-headed kid wants nothing to do with the car business and they leave for something completely different.

        • 0 avatar
          Corey Lewis

          And that’s okay. A child shouldn’t have to go into the family business simply because they’re a breathing human, and the parent wants someone to carry things forward.

          That’s how you end up with a high suicide rate among dentists.

      • 0 avatar
        bking12762

        We used to refer to the offspring as PHD’s. Papa has a dealership…

    • 0 avatar
      Lou_BC

      @danio3834 – Kudos on nailing it down tight. That is exactly how it is in my town.

      I find that usually 1st generations do okay. They inherit the work ethic of dad or uncles for example. Their kids tend to be the entitled bunch that kill off the business. I saw that happen in my town with one Ford dealer.

      • 0 avatar
        Zackman

        That sounds EXACTLY like the company I retired from in March. When I finally walked out the front door for the last time, I truly never looked back.

    • 0 avatar
      wumpus

      While it wasn’t a car business I remember working at a reasonably small business. New CEO bought 50% or so from the founder, then quickly fired said founder (claimed over “ethics”, presumably for having any). After that he was mostly a no-show and the business was driven into the ground within a few years. Actual management buys the company for pennies on the dollar and suddenly runs it profitably.

  • avatar
    danio3834

    As far as corporate employees go, Steve is right that most to most administrative/management employees, just another job. It could be a box manufacturer as far as they’re concerned. More technical focused jobs attract proportionally more enthusiasts. Chrysler still has a disproportionate amount of enthusiasts, and under FCA they’ve been unleashed. Look at the product. The same guys literally cried when they were forced to produce the Caliber.

    • 0 avatar
      FreedMike

      Unleashed? Not sure how that explains the Dart or 200…

      I admire what FCA has done with the Challenger, Charger, 300, and Wrangler. Any car guy should. I’m not into trucks, but I’m sure Ram makes some nice stuff too. But that’s ALL the cool stuff I’ve seen from FCA.

      • 0 avatar
        danio3834

        Those cars were designed by people who were enthusiastic about making something interesting and different in the marketplace. If anything, the enthusiasm should have been constrained to save cost and make them profitable to a lower price point. The volume sellers in that space exude anything but enthusiasm.

  • avatar
    SCE to AUX

    Many dealerships are family-run, -owned, or -started, including my new local favorite, from whom I’ve bought two cars.

    Any comments regarding the family aspects of the business?

    • 0 avatar
      Steve Lynch

      Only that they are all slowly being gobbled up by the large publicly-held groups, much to the consternation of automakers.

      • 0 avatar
        Lou_BC

        Agreed. My town and the surrounding smaller towns have for the most part been gobbled up by public chains or huge private chains. Everything in my town with the exception of Hyundai and Subaru are owned by the same two dealer groups.

      • 0 avatar
        highdesertcat

        That’s what happened to the dealerships owned by my brothers, they were gobbled up by a huge auto group. Money talks, BS walks, and everybody has their price.

        Sometimes these groups with money make an offer that just can’t be refused and it’s foolish not to take the money and run because you’re set up for life.

    • 0 avatar
      Scoutdude

      In quite a surprising turn a local Ford dealer picked up the Chevy store across the street not that long ago and more recently a Chevy dealer picked up the Ford store in the same vicinity. Also we had another Ford store that was sold to a long time employee who had made it up to GM. So the little guys still have a bit more life left.

      I will take the locally owned store, earlier this week we accompanied my MIL to purchase her new Mustang Convertible, it was at a dealer who has been around forever and is still in the same family. The owner was on site and actually introduced himself as such. Since the F&I guy said OK to declining all the add ons from the get go we are actually going back there to look at a car for my wife tonight as that particular salesman had the last two days off. Of course I pulled my usual tactic of going it not too far before closing so that they want to get out and get home.

    • 0 avatar
      SCE to AUX

      I couldn’t edit my original comment, but my thoughts on the family-owned dealership:

      1. They could go all Corleone, making the place ultra sleazy.

      OR

      2. They could run a clean ship, because the owner doesn’t want his niece in the Finance Department to be embarrassed by underhanded tactics.

      • 0 avatar
        highdesertcat

        SCE to AUX, I suspect in the real world it will be somewhere in between, ebbing and flowing between feast and famine.

        When the chips are down, and sales are sluggish, a little creative salesmanship goes a long way. Just sign on the dotted line.

        Coupled with a little creative accounting, and voila, the bottom line won’t look so bad.

        Such practices are not limited to auto dealers.

        Anyone who has had to make payroll is well-versed in financial tactics using whatever means to justify the end.

  • avatar
    Hooligans

    My comment may not fit right into this particular conversation, but as a deployed Army National Guardsman, I once spent a year cooped up with a fellow soldier whose regular job was as a finance manager in (city deleted) area dealerships.

    The stories amazed me. As time went by he disclosed practices that any average car buyer couldn’t possibly realize were happening. One important take away for me was that his job depended on his performance on a monthly basis. One bad month and he would be fired, and according to him, that’s the norm.

    • 0 avatar
      Steve Lynch

      Ah, Houston, second only to LA for dealer fraud and and former home of Bill Heard’s Landmark (“Land Shark”) Chevrolet, who supposedly pioneered the practice of producing phony W-2s for customers to get them financed.

      The dealer group I mentioned in #4 had a couple stores there and their GMs were involved in such shady antics I did not mention any because no one would believe me.

      • 0 avatar
        JimZ

        how much does the dealership actually make on the sale of a new car? I heard some time back that it’s not very much; most of their profits come from used cars and parts & service.

        • 0 avatar
          Steve Lynch

          Current average profit is around 2.2% of the sale price on new cars. You are correct, most dealers make way more on used cars and in all other departments.

          • 0 avatar
            danio3834

            Net is exactly what Steve said. Gross, for example the difference between what the dealer paid for it and you all in financing it for, is much higher. Especially in truck markets and in a dealer where they have an aggressive finance office.

      • 0 avatar
        econobiker

        Bill Heard “MR. BIG VOLUME”!!!
        Rot in helll…good ridance.
        These were the folks (in Nashville TN) that once stole a (used) car back from a customer because they gave out too good of a deal…

    • 0 avatar
      Lou_BC

      @Hooligans – I believe you.
      A billionaire fellow in BC where I live started out with a car dealership. I’ve heard from multiple sources that every month he would have a staff meeting and fire the lowest performer.

  • avatar
    NotFast

    Wasn’t Mr. Lynch a former contributor to TTAC? Welcome back!

  • avatar
    Steve Lynch

    Yes, in Tucson, writing used car descriptions for a couple of Mercedes-Benz dealers’ websites for fun.

  • avatar
    SuperCarEnthusiast

    A person that can sell 30 cars a month is a superstar! That is 360 cars a year! Many small dealerships would be happy selling that number in a years time!

  • avatar
    CincyDavid

    I knew a guy in a multi-line luxury store in St Louis who reportedly sold 50-60 cars a month. His deal was that he knew Buyer A liked new silver LS460s, he knew buyer B was looking for a 3 year old off-lease LS460, Buyer C needed a 5 year old LS460 for his kid, etc, and he would turn one new car sale into 3 or 4 deals. He never took “ups” on the floor and if he didn’t know you he wouldn’t waste his time talking to you. Had 2 of his kids working for him, he paid them out of his pocket, but all 3 got demos. He had also been selling cars for 35 years.


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