What's In A Paycheck?

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Dealership general managers should expect to make about $66K a year, plus another $15,000 in potential bonus and commission. That's the national average for GM compensation according to results from the 2008 Dealernews Wages & Benefits Survey. Sales managers nationally average about $57,000 a year, plus roughly $14,000 in bonus/commission.

Dealernews surveyed more than 1,000 dealers across the country in May and June 2008 to determine what dealers were paying their prime employees. Given that pay scales and bonus/commission packages can vary according to a number of factors, Dealernews sorted the data according to salaried and non-salaried positions; geographic location of the store (Northeast, Southeast, Midwest, Southwest, Northwest); whether the store operates in a rural, suburban or urban market; and other factors.

Service managers earn slightly more than $48,000 a year (nationwide average); financial managers roughly $59,500 a year; and e-commerce managers (albeit a relatively new position at most stores) so far earn about $47,000 a year. Bonus and commission packages nationally ranged from as much as $17,800 a year for financial managers to about $8,500 for service managers and $5K for e-commerce managers.

Vehicle sales associates nationally earn $12.26 per hour on average and can receive about $13,400 in commissions/bonuses per year; however, only seven in 10 dealers reported making bonus or commission packages available for vehicle sales associates (non-managers). Highest wages for vehicle sales were reported in the Southwest ($13.73/hour), while the Midwest averaged the lowest ($11.34/hour). Parts and accessories salespeople earn on average $11.38 an hour, with highest hourly wages reported in the Northeast.

The national average for service technicians is $15.95 an hour, although it increased to over $17/hour in the Southwest. Service writers make about $12.76 an hour on average, and parts counter personnel earn an average of $11.68 an hour.

Of the more than 1,000 dealers responding to the survey, 70.3 percent were franchised stores (selling new vehicles), and 29.7 percent were non-franchised businesses (parts and accessories, or used vehicles). Annual gross income for responding dealerships averaged $4.6 million ($5.8 million for franchised stores; $1.9 million for nonfranchised shops).

Of the dealerships responding, almost half of them said they set their pay scales by finding out what competitive dealerships are paying for similar positions. Roughly a third said they had no formal recruitment or wage-setting strategy relying instead on personal referrals. Other findings:

  • Nationally, dealers add just over 10 percent to their salary budgets to pay for benefits. Respondents reported that about 32 percent of their total business expenses are for labor.
  • 54 percent of employees leave a dealership to change careers; 34.3 percent leave in search of higher pay.
  • One in three dealerships requires drug testing as a condition of employment. Just over 40 percent of respondents say their business requires drug testing if an employee is suspected of being under the influence of drugs or alcohol while at work. Only 10 percent of dealers perform random drug testing of employees.
Copies of the Dealernews Wages & Benefits Study are available for review this weekend at the Dealernews booth in the Indiana Convention Center Lobby. Order forms for the complete 271-page report (price: $99.95) are available at the booth. — Mary Slepicka