The rules of dealership compensation are changing. Fast.
Today's top performers, whether in sales or service, aren't just looking for bigger bonuses. They want clarity, fairness, and rewards for the right behaviors. And smart dealers are listening.
Here are three major shifts redefining how leading dealerships are compensating their teams in 2025.
Shift #1: Simplicity and Transparency Are In, Confusing Pay Plans Are Out
For decades, dealership pay plans were built like puzzles: base pay, gross profit splits, volume bonuses, CSI deductions, spiffs, and more. They were complicated by design. But that's changing.
Here's how it is: They don't make 10 different components in a single pay plan to give the salesperson any advantage. It's confusing for a reason, and that sucks.
Instead, progressive GMs are embracing simplicity. Here's a "napkin test" a general manager can use: if a salesperson can't explain their pay plan on a napkin, it's too complex.
You can flip the traditional model by rewarding customer relationship value instead of gross profit. Here's the plan:
- $100 bonus for walk-ins
- $300 for referrals
- $400 for service drive conversions
- $500 for repeat customers
What's the logic? Maintaining a relationship with that customer and bringing them back in is more valuable than just some random person walking in off the street.
In service, you can apply the same principle. Service advisors can get a flat +1% commission if their dollars per repair order beat manufacturer benchmarks or -1% if they fall short. That's it. No politics. No moving targets. Just performance.
Shift #2: Hybrid Pay Plans Are Beating Commission-Only and Flat Salaries
The old model (100% commission for sales, hourly pay for service) created either feast-or-famine cycles or capped motivation.
Forward-thinking dealers are moving to blended comp plans that balance stability with upside.
Some GMs are exploring a model with 70–80% fixed pay and 20–30% variable. It gives sales teams predictability while still encouraging performance.
You can level it even further. Your salespeople can earn:
- $450 for selling at asking price
- $350 with a 2% discount
- $250 for deeper discounts
This structure promotes price discipline, reduces margin erosion, and still gives top performers a clear path to six-figure income. In fact, top salespeople can earn over $250,000 annually.
Shift #3: Service Staff Are Finally Getting Paid Like Sales Stars
The most overlooked compensation evolution is happening in the service department.
Historically, service advisors, despite handling far more customer interactions than salespeople, were paid flat wages or minimal bonuses. But savvy operators are correcting that.
Here's how you can lead the way by paying commission based on the type of work performed:
- 1% for internal jobs like prep work
- 1.5% for warranty labor
- 4–7% for customer pay work
What's the logic? A service advisor talks to 300 people a month. In sales, you sell 20 cars and talk to 40 people.
With this plan, advisors who exceed manufacturer benchmarks can now earning an extra $20,000 annually. That's retention insurance.
Relationship-Focused Compensation Wins
As margins tighten and talent grows scarce, the dealers who win will be the ones who simplify pay plans, balance stability with performance, and reward the people who drive customer loyalty.
At Autopeople, we've seen firsthand how the best compensation plans help recruit, retain, and grow top teams.
Schedule a call with David Adragna today – 650 808-7066.
