Dealerships should tweak pay plans, offer consumers a best buy

News flash: Some car dealerships rip off customers.

That was the point behind a year-end follow-up report on NBC's Today show on Thursday.

The report -- first aired in October -- revealed that four out of five dealerships that NBC's undercover producer visited recommended additional service work that expert mechanics said was not needed to fix the problem.

Perhaps it's time for dealers to redesign their pay plans, because, as the report noted, many service managers get a commission. So they're motivated to up the bill.

In its report, NBC rigged a 2007 Jeep Grand Cherokee so that it needed just one component replaced to the tune of about $100, expert mechanics said.

Yet some of the Chrysler-Jeep dealerships in the report recommended additional repairs that jacked the price up -- in one extreme case to close to $2,000.

As a consumer, I'm all for exposing fraud.

But as an automotive journalist who talks to dozens of dealers regularly, I cringed. The report is a black eye on the industry, and I felt sorry for the many good guys and gals who do not overcharge or recommend unnecessary work just to pad their pockets.

But as the report noted, service business is important to support many dealerships' overall revenue, and the service managers earn a commission.

I've talked to several dealers who are considering revising parts of their pay plans to put more employees on salary rather than pay on commission.

Their reasoning: Younger employees want a set income, not a variable one.

I think there's another reason to consider tweaking the pay plan to emphasize salary, particularly for the service manager's job: Perception often becomes reality.

Consider the appliance and electronics retailer Best Buy. The chain's salespeople make a point to tell customers they do not receive a commission.

Why? To earn your trust with the perception that the salesperson has no financial stake in how big a TV set you buy or how much you spend.

I'd like to tune into the Today show this time next year and see a report on how car dealerships -- once perceived by some as borderline crooks -- now offer the best buy for service work.

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