Honda Sale - what is factory bonus on CRV?

[SPQR]

....The salesperson you were dealling with would only have scored a massive $100 commission out of your deal.. even at full price he'd only get ~250..

it seems to me that customers ASSUME that salespeople get ~5-10% of the PURCHASE PRICE of the vehicle.. but noooo... we get 10% of the Gross Profit......

That means on a CRV, the Net profit (I think you meant the net profit), is $2,500. But the margin is more like 25% of the purchase price ($40,000 car means a margin of $10,000). Out of this margin must be paid the business overheads such as all of those admin people, the electricity, the rent, the lazy service department, the previously mentioned $2,500 profit etc as well as the retainers for salespeople.

The business profits by $2,250 after paying all costs and the salesman gets $250 per sale plus retainer, company car, petrol and bonuses for having a good month.

If it's so bad, why is there an endless stream of salespeople? Why would you do it? Maybe they should become highly paid professionals like nurses (3 years uni), teachers (3 years uni), firemen ( a few months training) and policemen (a few weeks training) or even lower paid professional like engineers ( 4 years uni) and architects (5 years uni).

[The X Man]

There is initial margins but then there are rebates Honda gives the dealers to move particular builds and also promotions. With my car it had initial margin but also a $4k rebate from Honda to the dealer. I don't think VT3C has really told the full story on what lines the dealer principals pockets.

Ineresting enough when i told te dealer i knew about the 4K rebate he played dumb and raced to see his Manager. It was only then i struck a deal to the amount i wanted to pay.

[VT3C]

I am not talking about dealership hold-back... and you'll note I congratulate him and all who take the dealer's profit.. I am purely commenting on the arrogant attitude towards his salesperson. allthough the salesperson may have deserved it.. most of them do..

and you answered your own question - the seemingly endless stream of salespeople is because they're completely disposable and treated this way by dealerships.. and alos 90% of salespeople just dont care about the product, just the $$$ in their paypacket. but there's a small handfull that care about the product itself etc.

ohh and FYI, I've had a 'professional' career for 10 years and I also did a 4 year university degree.. my reason for being in sales for Honda is that I love the product and enjoy the interaction with cutomers etc. it is unfortunate though that with the current ecconomic climate, there isnt a huge avenue for income through comissions.

I think a 10k margin on a CRV is a bit of post-crack-smoking dellusion.. either way, that margin is kept confidential to the salesperson and we definately dont receive any chuink of that.. i' get $1,000 per CRV is that were the case and I sure wouldnt be complaining !!

[62rocket]

oh well, maybe Kharma has got me this time. The CRV goes back in for a warrant issue on Friday with less than 300kms. Wheel alignment is all wrong. Veers to the left relatively fast at 100km/h +...

[JAC]

62rocket,
It's not kharma!
No matter how much you pay the product is not very good - new CR-V just like a pot luck.

I experienced the same thing, booked for service they said could not find anything wrong and still steer to left until now.
I serviced twice, and I believe they actually did not do anything with the car, another issue with Honda service, I will keep complaining

CRV is considered as one of the worst product finishing from Honda. Honestly, this is the worst honda ever in term of finishing.
things to check:
- front body fender (not align correctly) --> like car that involved in the accident and repair by dodgy panel beater.
- rubber between windscreen and hood (where the wipers sit) not properly fit
- some issue with dashboard centre console (top crooked) --> mine so far so good.
- and the most ovious one but hard to notice - 4 out of 5 CR-V have crooked tailgate door.
- roof line does not align correctly on most 08 CR-V
- Door chrome & rubber finishing also bad on some CRV (not clipped properly)
- glue staint on some doors rubber and weather seals badly noticed.

All items mentioned above can be found in 08 built CRV and most service centre could not do anything about the tailgate and the plastic roof line.

I will not mention any detail to other car maker, but for a Honda that normally have good reputation for built quality seems to lower their quality that is a big dissapointment.

Dealer let me drove 3 different loan CR-V when servicing my CR-V and 2 of them seem to steer to left as well. And each one of them have varies issues with finishing I mentioned above and only 1 of them had perfect tailgate door that is the nov 07 built.

I am kind of believing that 10k profit being made on each CR-V by Honda Oz and letting their customer and 1 salesperson to suffer

Now, I am considering other car Brand for my next purchase.

[lolipss]

Hi JAC,

How can I test my crv if mine got the Wheel alignment steer to left problem? Are all CRV 08 having that problem? I'll be getting my new crv next week from the dealer...

[62rocket]

I have notice that the tailgate does flex alot (side to side when you push each bottom corner in an opposite direction, that is one up and one down) and that was mentioned in one of the new car reviews I read about the 08 CRV. I just put that down to it being such a large door that some flex may be evident. I did notice that the hinges for the rear door certainly don't look all that adequate for the job. I haven't noticed the rest of the items you mentioned but I will have a look sometime. My tail gate does come up really easily and smooth with only a touch of the release button.

as for the left drifting....Take it for a drive, get it out into a 100 zone and see how it handles at 100km/h +. My wife drove ours for the first 200 kms and I drove it on last Sunday for the first time at 100km/hour. The car felt like it was a constant battle to keep it straight on the road, I constantly had to pull the wheel down to the right (very annoying) and within 5 seconds or less of taking your hands off the wheel the car is over the centre or left fog line fast heading into the gutter or next lane!!! I just hope they can work this one out for me as a drifting car would have to one of the most annoying things about driving. You certainly don't expect it in a new car. I am just wondering what this is doing to the tyres and what effect it has on overall fuel consumption too.

[62rocket]

I just found this thread on another CRV forum. Post number 44 is interesting. The entire thread talks about UK cars pulling to the left or US cars pulling to the right. Apparently there is a UK service bulletin for the problem.

http://www.crvownersclub.com/forums/...ead.php?t=1177

Hope this helps and I will be mentioning the service bulletin to my service people when i take it back on friday.

[SPQR]

...I think a 10k margin on a CRV is a bit of post-crack-smoking dellusion.. either way, that margin is kept confidential to the salesperson and we definately dont receive any chuink of that.. i' get $1,000 per CRV is that were the case and I sure wouldnt be complaining !!

I said that the margin is 25% of the sale price and out of that margin must be paid the business overheads such as electricity, rent, admin staff, the salesperson's cut, etc which, by your account, is up to 10% of the profit. You had said that amounts to some $250 on CRV. Assuming that is the 10% you spoke of for salespeople, then the dealers profit is $2,250 on the sale of a CRV ($2,500 - $250 = $2,250).

A margin is the total mark-up on the price that a dealer pays for a car. The profit is what's left after the dealer makes allowance for all of the bills. By your account, the profit is one quarter of 25% (ie. 6.25%)

Many years ago (before GST), there was a tax named "sales tax" which was applied to the wholesale price of a car (the price that the dealer paid to buy the car from the factory or importer but without any kick-backs and bonuses). Some car dealers would separately identify the sales tax in the make-up of the price. They had to do this for businesses buying cars. It was then a very simple calculation to work out what the dealer paid for the car at cost and therefore the "margin". It told you nothing of the actual profit but you have just revealed that to us.

I did enough of those deals to work out the pattern; namely that generally, the margin was about 25% of the sale price but it actually increased the more expensive the car.

Salespersons don't usually just get commission as that is the bonus that makes them hungry to sell. They are usually on a retainer which is the equivalent of a base wage (and I don't mean the legal minimum wage which is a lot less). They are encouraged to perform by the commission which is in effect a bonus but a necessary one because the base wage is not all that flash.

I don't envy the work of salespeople. And like a policeman, it takes a certain type to be one. Unfortunately, as you said, many are not that interested in the product but rather the money. This leads to their disdain for heads and, as a consequence of this, the buying public has little respect for them. That's why they are always at the bottom of the most trusted profession list; right down there with politicians, lawyers and real estate agents; all egotistical and parasitic professions.

[VT3C]

SQR - very good points there..

i can only speak for my dealership as every place has it's own commission structure.. i get a pathetic retainer* (that doesnt even cover my rent) and the bonus structure here is to DELIVER (not just sign-up) 14 cars a month minimum. now Please dont think I am complaining, I was jsut stating that in the last few months withthe ecconomy slowwing right down and the rising costs of living etc, the car market has slowwed down so much that sales targets are quite hard to meet and that the opportunity for large comissions are few and far between.

they justify the retainer based on minimum wage for a 38 hour week - yet we're required to do ~65 hours a week plus. so we work 65 hours but only get paid for 38 of those.. at the 38 hours we get ~11.80 an hour and over 65 hours that works out to be 6.90 an hour LMFAO..

anyway... everyone in sales - especially of non-essential luxuries like cars, is suffering thanks to the global market crash etc.. so not expecting sympathy LOL

to those of you with CRV with alignemnt issues - did you have 'extra' packs or the optional alloys fitted ??

[62rocket]

that's not really good pay, that's only like 23.5k a year!

Mines got the basic steel povo wheels. Its going back in Tuesday for a 'warranty' alignment but somehow I don't think that's going to fix the problem. I just hope it does...

[SPQR]

A good saleman, in good times should be earning a minimum of $65K per annum. This is less than nurses, teachers, policemen and firemen. This is substantially less than doctors, dentists and lawyers but more than engineers and architects.