Where can I learn about auto dealer's monthly and annual sales targets?
December 17, 2014 10:58 AM   Subscribe

I'm in the market for a new Mazda. Invoice prices, holdbacks, dealer cash, special financing deals, and the like are all out there on the Internet. But I can't find is what bonuses Mazda offers to car dealers for hitting various monthly and yearly sales goals. How do I find out about this?

Maybe you also listened to the This American Life episode where they hung out at a car dealership, talking to the sales people and managers. The game revolved around hitting sales numbers to qualify for hefty monthly and annual sales target bonuses set by the manufacturers. This would sometimes induce them to sell cars for negative profit. I figure this might tell me how hard I can push when negotiating on price.

So perhaps you know, dear AskMeFi, where I can find out about what sales target bonuses Mazda offers? And, better yet, how close various Mazda dealers around Atlanta are to these sales targets?
posted by Mercaptan to Travel & Transportation (3 answers total) 2 users marked this as a favorite
My anecdote... but not Mazda.

I went to look at used cars on a Honda lot. I was interested in a Ford station wagon. I took it for a test drive and the check engine light came on. After some wrangling, the sales guy wrote down the exact phrasing I wanted on the sale contract for them agreeing to pay for repairs and then wandered off. Leaving me in his office.

His computer monitor was facing me and I read it. It indicated he had sold 4 cars that day and had a fifth on the hook (me). This was fascinating, but not as fascinating as all the other interesting statistics about how much each car was, the age of the buyers, who fell for the last-minute thing about needing an alarm, sales statistics for other people (one person had sold 6 cars, one only 2), etc. The monitor was FILLED with information and it was viewable from my visitor chair without me moving or touching anything.

So if you get nothing here, go in and be interested in a car. If you ask a question and they leave the room, feel free to look around at anything visible from your waiting spot. Also, depending on what you look like (I am female and invisible) much of this information can be gleaned while you sit and wait patiently for someone to take you seriously when you say you'd like to buy a car. These people love to talk. It's a matter of picking up the jargon quickly and then you know everything.
posted by AllieTessKipp at 11:24 AM on December 17, 2014 [3 favorites]

I used to sell new cars for a living. We never really talked about the monthly sales goals/bonuses from the manufacturer. We basically never sold a car for less than invoice (before whatever incentives applied at the time). I think it's because when you have 10-20 sales people that you expect to sell 12-15 cars each in a month a single car deal doesn't make that much of an impact, not enough to sell for under invoice anyways. They less-than-a-handful of times that I did see a car get sold for under invoice, it was for about $100 under when typically the best deal most people could get is $100 over invoice (before rebates and/or incentives).

Also be aware that, on a new car, the typical commission is 30% of the gross (sale price-invoice) with a $150 minimum (called a "mini"). If the sale price is under invoice the mini drops to $100. There are bonuses and stuff but, at least where I worked, that mostly meant a commission bump to 35% of the gross on the cars I sold that month. And, while it didn't bother that much to go from $300 over invoice to $100 over, it was a MUCH bigger deal going from $100 over to $100 under everyone worked VERY hard keep a deal in the black. So don't be surprised if after however much time it takes you to test drive and negotiate down to $100 over invoice, it takes another couple of hours to get them down to $100 under.

There is going to some variation in different markets so you might find it easier (or harder) to get a deal that good but it's usually just not worth your time for a few hundred dollars unless you go to a deal who happens to be one unit shy of some bonus an hour before closing on the last day of the month and you're the only one who looks like they're going to buy a car. But the odds of that are pretty slim.

$300 over invoice is a fair deal that allows the salesperson to make a decent living (as long as they're selling 12+ cars a month) and amortized over the time you'll own the car, you're just not going to save that much.

But frankly, you'd be better off getting a two-year-old lease return and get a car in basically the same condition for several thousand dollars instead of worrying about how to save a few hundred on a new car.
posted by VTX at 6:26 PM on December 17, 2014 [2 favorites]

A good friend of mine is a third-generation car dealer (not U.S. brand, not Mazda), so I asked what he thought.

He agreed that manufacturers do offer sales bonuses, and these can be large enough that some dealers will sometimes sell below cost at the last minute in order to meet the goal. But he also says:
"The thing is, these "stair-step" incentives are mainly used to advertise cars below cost to lure you in. They will do whatever they can to not take a loss when you actually show up. This will involve telling you the advertised price was for one particular unit that "just got sold". Adding on bogus fees, "market adjustments", or dealer added equipment. They will grossly undervalue your trade. They will try to recoup in the finance department and may require you to finance with them to get the advertised price - then mark up the rate to make up the loss on the sale. High pressure you into buying warranties, paint protection, and aftermarket accessories."
IOW, you're actually more likely to be subjected to high-pressure sales techniques or outright "cheating" if you figure you can leverage the dealer's desire to hit sales goals in order to get a car below cost - they'll just try really really hard to make up the profit somewhere else.

where I can find out about what sales target bonuses Mazda offers? And, better yet, how close various Mazda dealers around Atlanta are to these sales targets?

My friend doesn't see how this is really possible, especially for individual dealers, without actually being a Mazda dealer or, y'know, being intimately involved with a salesperson (BFF or SO or whatever.) This info is not officially released to the public, it's private business information, it's definitely the kind of thing manufacturers and dealers want to keep close to the vest.

He says some auto sales industry trade magazine/websites will note when one manufacturer or another offers special incentives to dealers, so maybe you could pick up a general idea by reading these mags long-term, but (as mentioned in the TAL episode) sales goals and bonuses can change from month to month. And of course, he can't guarantee that this info doesn't leak out occasionally and get posted on forums or whatever, but he doesn't know of any place (online or not) where the general public could get regularly and reliably get this kind of info, where you know that 'Dealer X' is 6 cars away from their October sales goal, so you can wander in on Oct. 28th and get the deal of a lifetime.

He's looked, too, because if he knew of such a website or newsletter or something, he would be reading and using it himself just to know what the competition was up to. ;-)
posted by soundguy99 at 9:23 AM on December 18, 2014 [1 favorite]

« Older How do you maintain or build mental discilpline?   |   How much to tip building staff? Newer »
This thread is closed to new comments.