A Georgia woman, Melanie Knapp, asked if I know of anyone else who's gone through what her husband has as a car salesman. My answer is no, thank goodness, and I hope there aren't too many people who have.
Here's her story in her own words:
“In April of 2001, my husband lost his job in the broadcasting industry. He tried fervently to find another position, but couldn't. As a stopgap measure, he answered an ad in our local paper saying that they would train you to be a car salesman and then place you at a reputable dealership.
“He took the 40-hour class, and then started selling cars at adealership. Things were okay at first, although not great. He would sell lots of cars, but only get paid on a few, always being told things like, ‘That car hasn't been funded yet.’ Or, ‘We had to slash that deal to nothing to get it done.’ Sometimes he just wasn't given an explanation.
“Eventually, the commissions checks stopped altogether, even though he was still selling cars. Only a $250 draw check a week was coming. He quit that dealership and went to another one.
“In November 2001, he went to a Daewoo dealership. This, too, was pretty good for a while. He sold cars, and got paid the correct amount of commissions he was owed. Then the general sales manager got greedy. He raised the ‘pack fee’ to $1,500, so that on any car my husband sold, he would only get $100 or so.
“He transferred to another dealership in the same organization, but didn't get paid on any cars that he sold, because since Daewoo was going out of business, the owner was in the process of getting afranchise. But something went wrong, and the owner went out of business.
“Next, my husband went to work at Carmax, where he was assured that none of the hanky-panky that occurs elsewhere went on there since they were corporate owned. In our opinion, it was worse.
“You only got paid a flat fee of $150 per car that you sold, and there was a twist my husband wasn't told about when he was hired. A buyer has five days to return a purchased car. Fine. But it comes out of the salesperson's paycheck.
“One time, my husband even had someone return a car weeks later. The company claimed a customer could do that if management deemed it necessary. Interestingly, the cars were always returned on my husband's day off.
“Next, he went to a Five-Star-Jeep dealership. He was there four weeks and never saw a commission check. They owe him $4,660. I doubt we'll ever see it.
“For the first time in our lives, we are in terrible debt, just from him selling his heart out for these crooked dealers 60 hours a week and only getting $1,000 a month.
“I want to know if this happens everywhere. We've heard from other people in other types of sales. They say, ‘Yeah, car sales are brutal.’”
The retail auto industry, like the auto industry in general, is brutally competitive. But for the most part, it's fair. It has to be to survive.
But alas, that “hanky-panky” she mentions does happen here and there. Joe Verdi, a dealership sales trainer, tells me it happened to him back when he was selling cars.
He says he'd initially make good money on high sales volumes, only to have the dealership suddenly restructure its compensation plan to his disadvantage.
A common denominator of top dealers — those that sell a lot of cars and appear year after year on the Ward's Dealer Business 500 — is that they offer fair pay plans, ones that encourage high personnel performance, deep loyalties and low turnovers.
I've seen many great dealership operations. The best treat and pay their employees fairly. That's true throughout the business world.