Originally posted by: Cleaner
It is important to realize that this isn't hurting the dealer or manufacturers' bottom line its affecting the salesmen. They are now being given a set commission on every car instead of the floating one they get normally. That's why you have to haggle with the salesman you're changing his percentage. This now limits them to $500 a car or so instead of the regular $2000 or more. The dealer and manufacturer are still getting thier share.
Nah, it definitely is hurting the big three. I live in one of the metro detroit suburbs and a lot of people work for one of the auto companies. Considering that the margins on cars were extremely low already (only a couple hundred for a lot of cars) and the fact that they make very little on employee purchases, I think they are only hurting themselves byt starting this price war. Oh, and my dad mentioned that this isn't new, or at least at Chrysler. Apparently any employee was allowed to give out employee discounts to 5 other people (per year? I don't remember the duration).