Car salesmen commissions
A recent lawsuit against the Hendrick Automotive Group lays bare the alleged games dealers play even with their own employees. A number of Hendrick employees filed suit in Collier County Florida to obtain class action status against the large auto dealer. The suit alleges the dealers engaged in fraudulent activities to avoid paying the full sales commissions to their sales people.
How much do car salesmen make?
In the Hendrick case, new car salespeople claim they were supposed to receive 25% of the gross profit on the sale of a new car and 30% of the profit on the sale of a used car with a minimum commission of $200 per vehicle. “Gross profit” was defined as the difference between the selling price and the cost to put the vehicle on the lot. The “cost to put the vehicle on the lot is what this lawsuit is all about.”
Lawsuit lays out the games car dealers play
The plaintiffs in the case, new and used car salesmen, allege the dealer performed “phantom work” and allocated phony charges against the vehicles to raise the “cost to put the vehicle on the lot” in order to lower commissions. The lawsuit alleges Hendrick used “three discrete and sophisticated ways to manipulate and misrepresent the accounting on deals.” The pleadings allege that Hendrick undervalued customer trade-ins and inflated service costs. The examples shown include charges of $299 to fill tires with nitrogen, even when the nitrogen machine wasn’t operable, or $700 to wash and vacuum a vehicle.
Lawsuit alleges dealer paid minimum commissions
In one example, a salesman was paid only the $200 minimum commission after selling a $70,900 Chevrolet Corvette. The salesman alleges he was due $1,849.79 based on the sales percentage. He claims the cost of the vehicles was misrepresented and that he sold several aftermarket items that weren’t factored into the selling price.
The plaintiff’s attorney alleges that 91% of the time, Hendrick paid only the minimum $200 sales commission.
The Hendrick Automotive Group operates 96 dealerships located in 14 states. They’re headquartered in Charlotte, N.C. and they rank #6 out of the top 150 dealerships groups in the U.S., according to Automotive News.
Collier County Circuit Judge Lauren Brodie will rule soon on whether to grant class action status to the lawsuit.
©, 2019 Rick MuscoplatPosted on by Rick Muscoplat