Thread: Does Anyone Know ??

Originally Posted by letherm

When I told my brother that I was buying a new car we discussed how to get the best deal. He used to work in Esanda Finance many years ago and dealt with a lot of car finance etc.


What he said was that dealers get bonuses for how many car they sell and once they hit a particular threshold, say 20 cars in a month for example, they will get a bonus when they sell more. The kicker is that the bonus is applied to ALL the cars sold that month not just the ones over the threshhold. So, bottom line is that a dealer could afford to take a loss on a particular car and with the bonus system still come out in front. Sort of a win win situation. Someone gets a good deal when buying a car and the dealer gets the extra bonus.


Don't know whether this system still operates but it explains apparent dealer "losses" so to speak.


Martin

This is the system I had explained to me by a salesman recently. He said it took him a while in the job to work out the system, it is the back room finance guys who determine what a car can sell for and how important it is to make the sale at that particular time.

What he said was that dealers get bonuses for how many car they sell

That only applied to finance companies who held dealer Floor Plan like Esanda. AFAIK the car companies do not give bonuses.

The dealers got and probably still get bonuses for how much RETAIL paper they write.
So dealers are always very anxious to sell hire purchase by the company that provides their Floor Plan ie finance for the cars they stock.

If they sell over a set target they get a lower interest rate on their Floor Plan.
Regards Philip A