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  1. #1
    Join Date
    Jul 2016
    Posts
    3

    Default Dealership Skimming Off Commissions

    My question involves labor and employment law for the state of: GA

    I work at a vehicle dealership and I recently found some discrepancies between the sales contracts for my deals and the commission reports I receive on these deals. I'm paid in commissions off the base sale price of a vehicle, usually around 20%. So, if I sold a vehicle for $20,000 and our profit was $2,000, my commission would be $400.

    The base price of each vehicle is listed as the first line item on the sales contract that each customer signs, and below that, all of the add-ons the Finance department sells to the customer during closing are itemized: GAP insurance, Tire & Wheel Protection, Roadside Assistance, Paint & Fab, Warranty, etc. That's called the "back end"...it's one way Finance makes their money. All of those things total up to the final number the customer owes on their loan, but my commission is only based off the BASE price of the vehicle. I'm responsible as a salesperson for holding our gross profit - I'm the "front end". Finance gets paid on the options itemized below that.

    There is also a section on the sales contracts that includes any vehicle options I sell to the customer, such as Prep & Freight, extra keys, special tires, upgraded trim packages, etc. Those are included in the base price of the vehicle that my commissions are calculated from, before Finance sells the customer their options on the back end.

    Well, I accidentally stumbled upon a difference in the prices listed on several sales contracts vs. my commission reports. Using the same example above, if I sold a vehicle for $20,000, listed as the first line item on the sales contract BEFORE Finance's back end items are added on, I found several instances where my commission report says the sale price of the vehicle was lower....maybe $19,000. So instead of my commission being calculated off $2,000 profit, it was only calculated off of $1,000 profit, and was thereby reduced from $400 to $200. Obviously the actual numbers vary a lot, but I'm keeping it simple here. Or, if I sold a vehicle for $25,000, the sales contract says the base price was $25,000. If our profit in the vehicle was $5,000, I would be paid $1,000 commission for that deal. But on my commission report from payroll, it would say the vehicle price was $22,500...making the profit $2,500...and my commission $500. I hope that makes sense - the sales contracts aren't always matching up with what's on my commission reports.

    At first, I couldn't figure out why this was happening. I scoured through all of the sales contracts and commission reports I had on file from my time so far at the dealership. I'd never had a reason to compare numbers to this depth before (I trusted my employer), but I found several cases where this had occurred. And after looking hard at all of the documents, I found out what the culprit was - while writing up the sales contracts, Finance had placed some of theiradd-ons in the section of the contract that is usually reserved for MY add-ons. So, if the Finance department sold $1,000 GAP insurance, instead of that option being placed on the main column as an itemization under the base price of the vehicle, it was placed in the options column where MY Prep & Freight/keys/tires/stereo/sunroof, etc. usually go....and that $1,000 for Finance's add-on got DEDUCTED from the profit that my commissions were calculated off of, simply because it was placed in the wrong column on the sales contract.

    What's even stranger is that on these sales contracts, some of Finance's add-ons were placed in the proper column under the base price of the vehicle and some were placed in MY column where it would deduct from the profit - all on the SAME contracts. This is baffling to me. Why would some options sold by Finance be placed on one side, and some on the other, especially on the same document? Why are they split? They were all sold by Finance on the back end. Whey aren't they all in the right place? There's no reason for any of them to be in my column. This is eating into my commissions.

    It appears that Finance is writing up the deals in a way to lower the commissions paid to me. I can't think of any other reason why they would do this. Does anyone have any insight? Is this legal?? I've compiled a comprehensive report of each and every discrepancy I was able to find, and I'll be bringing it up to the GM this week to get his input. Something is wonky....it seems that they're shorting my pay.

  2. #2
    Join Date
    Mar 2013
    Posts
    18,340

    Default Re: Dealership Skimming Off Commissions

    It's no surprise that car dealers screw the employee as bad as the customer.

    As long as you are being paid minimum wage, the employer can compute your pay any way he wants to so this has nothing to do with "legal."

    It has to do with contracts. Do you have a written contract with your employer specifying how your pay is computed?

    All I can suggest is that you talk to your GM and see if you can get this resolved.

    Then come back here and report.

    Just understand that car salesmen are a dime a dozen and you could get fired if you make too much of an issue.

  3. #3
    Join Date
    Feb 2008
    Posts
    1,179

    Default Re: Dealership Skimming Off Commissions

    I would bring it to the attention of the General manager and get clarification on which pieces are supposed to be subtracted out. And then I would check each contract carefully after the sale and immediately bring it to the attention of the manager if it is wrong. Honestly it sounds like Finance is screwing up.

    If it were happening on every deal, I would think that there may be a computer coding error. But it sounds like a human error since it is only sometimes.

    hopefully they will correct them for you and give you the full commission you would have gotten had it been correct. One question though, did the Finance person make commissions off your add-ons?

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