Dealership employees saw their earnings rise by 27 percent from 2020 levels, leading to an estimated earnings of around $103,000 per person in 2021 and marking the first time that average employee earnings crossed the $100,000 threshold.
This increase led to another milestone in the dealership world, the lowest employee turnover rate in the 11 years of the National Automobile Dealers Association’s (NADA) annual Dealership Workforce Study. According to data shared with Automotive News, average industry turnover was 34 percent in 2021, down from 46 percent in 2020. This was caused by employees being less inclined to quit or switch jobs because they were satisfied with their earnings.
These developments come on the heels of a record year for automotive dealerships, which saw average weekly earnings rise by 27 percent in 2021. Despite low inventories resulting from COVID-19 related bottlenecks and the microchip shortage, among other shortages, dealerships still profited.
This was caused by dealers having more power over negotiations for new cars, as the limited supply allowed them to justify selling a new car for sticker price or, in some cases, much more. In the case of used cars, dealerships have been notorious for listing them near or above what they retailed for brand new. This led to higher gross profits per-vehicle, which directly impacted the increase in earnings of sales employees, since their commissions are based on final vehicle sale price and the margin made on each vehicle sale.
“The drop in turnover and the increase in compensation were directly connected,” said president of ESi-Q Ted Kraybill. ESi-Q is a research company that conducts the study for NADA.
With new and used car prices falling but still siting near record highs, earnings for dealership employees is likely to remain elevated. In fact, industry analysts and the dealerships themselves believe this will remain the case for the near future. Due to an ongoing shortage of parts and labor, low inventories could remain well into 2024.
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Comments
Let the whining begin! 🤣
When you price up vehicles by $10-30k it’s easy to make that 100k.. Escalades and Corvettes in general.
Hard to believe.
Why?
Make it while they can – I have no hard feelings or envy. The number is referred to as the average so that means the executives, top salesmen and managers are all thrown in together to come up with an average figure. It would be more telling to see the median compensation rate (compensation number with half over and half under the figure). Still, make hay while the sun shines.
stealerships and their markups! My hats off to them! It’s the folks dumb enough throw money out the window I feel bad for🤷🏻♂️. Just sayin!!
Why are they dumb? Its not your money. Stop judging.
Dumb you ask! Enlighten us all on why you should pay over MSRP! You’re right it’s not my money! But anyone with a brain prob doesn’t like just giving a dealership that’s making dam good money on vehicle money just because! But please enlighten moron?
Sometimes a vehicle must be replaced and a driver does not have the luxury of waiting until an automotive glut occurs in order to get a reasonable sales price.
More & more evidence the good Ole US of A is upside down & a$$ backwards. Unskilled labor making as much or more than skilled labor & Professional Services that take years to get proficient at. Not a good trend as with many other things these days.
Sales people lying. cheating and stealing from GM employees and retirees at a record pace. I learned first hand.
What about the service advisor, no increase for them right. Just more broken new cars or unfinished cars.