Brilliant Idea of the Day: Stop Paying Car Salespeople on Commission

Would non-commissioned salespeople equal happier customers?

Would non-commissioned salespeople equal happier customers?

I had the good fortune of talking with a car salesman for about two hours this last weekend.

I wasn’t car shopping or even on a dealer’s lot, we were just in the same place at the same time and had a common passion: cars. He sells ’em, I write about ’em.

It was in that conversation that the topic of how car salespeople are paid came up. Our mutual conclusion amazed me: Get rid of commission and pay salespeople a base salary. In fact, the dealership he works for is doing just that.

This salesman, I’ll call him Simon, recently moved to my city after the dealership he worked at in a smaller town was on the verge of closing. His new workplace was notorious in the city for being a high-volume, high-pressure store. Simon told me stories of how management would tell him to flat-out lie to customers to close deals, which he refused to do.

Within months of Simon’s being hired, that dealership was sold. A new owner came in, installed new managers, hired a mostly new sales force, and wanted to change the way cars are sold there. Part of the transformation involved putting salespeople on salary and posting a fair price on every car – a price based on average sales prices, rather than MSRP (similar to the CarGurus DealFinder feature for used cars).

Salespeople are still required to do their legwork, such as making a minimum number of phone calls each day, but the theory is to look long-term and build trusting relationships with people.

In the past there hasn’t been a lot of integrity in the automobile sales business, so hearing Simon’s story was truly a breath of fresh air. Then just yesterday I read a story in Automotive News (sorry for the subscription pitch) about other dealerships across the county changing the way they pay their salespeople.

Maybe the industry is finally waking up to the fact that customers really hate dealing with car salespeople. Putting them on salary would let the customers put down their guard and actually enjoy the experience of shopping for a car, rather than dreading the entire process.

From a customer’s point of view, non-commissioned salespeople make a lot of sense. I’d rather buy from someone on salary, because I’d feel like he or she would have my best interests – and my future business – at heart.

Would you feel better buying a car from a salesperson who wasn’t paid on commission?


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1 Comment

  1. You know, the car business, from the manufacturers all they way down the line to the dealers, repair shops and used car lots is about the most crooked, corrupt business in the world. Every major scam that’s even been attempted on me personally was by some aspect of the automotive business. Think salespeople on salary wouldn’t be pressured to lie and cheat to close deals? I see no reason why the dishonesty would stop. If salespeople didn’t produce their quota, they’d simply be fired. At least under the present system, they get paid in proportion to their productivity. The key to being treated honestly is to know their tricks, know how a car works and to have a car guru to consult with if you can. The number one protective measure for yourself is to simply say “NO” and walk away. Believe me, if they are crooked in the showroom, they’ll be worse in the repair bay.

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