You would think that this was an easy question. But when the answer is in the context of calculating salesman commissions you might be amazed at how the dealer calculates the answer. The answer should be simple: what is the cost at which the dealer acquires the car? The dealership has already been reimbursed for overhead and expenses by charging a “pack” on each deal to each salesman. BUT the dealer adds money to the acquisition price of the used cars, sometimes known as “ups” or “ads.” What is either the need or the justification for this? Usually the pay plans are based on profit for the sale of each car, as agreed by the salesman and the dealer. These ups are usually not disclosed to any of the salespeople since it is “none of their business.”
If you work in either sales or finance at a car dealership you should start asking some questions about the COST of the used cars that you are selling and how the dealer gets these numbers.
The Law Office of Jonathan Rudnick litigates these cases against car dealerships, located at 262 HWY 35 Red Bank NJ 07701, 732-842-2070