In dealership speak, the OEM is your factory partner. The one who supplies the inventory, sets the rules, offers incentive programs, and issues recalls. Most of all, they approve your reimbursements on warranty work. If you’re franchised, your entire business runs inside their expectations and requirements.
Whether you’re talking new car allocations, marketing co-op dollars, or warranty RO audits, you’re dealing with the OEM. In short, the OEM relationship is both your greatest asset and the tightest leash.
DealerSpeak Translation
You’ll hear folks say:
- “That’s an OEM recall job.”
- “We’re not hitting our OEM incentive number.”
- “OEM warranty times don’t cover the real labor.”
- “Let me check the OEM bulletin on that.”
Where OEMs Show Up in the Dealership World
- Warranty ROs → Every claim needs OEM approval. Denied claims? Often a documentation miss.
- F&I Programs → Many OEMs offer their own financing, protection plans, and reserve structures.
- Sales Objectives → Bonuses tied to monthly sales goals? OEM-driven.
- Parts & Accessories → OEM parts cost more, but keep customers in-warranty and satisfied.
- Payroll? → Yep. Many spiff or bonus structures are based on OEM-backed campaigns.
OEM, commissions, who cares?!
Here’s the thing: OEMs might feel like a background force, but their decisions affect real money—especially on the service drive and the showroom floor.
- Warranty flat-rate times = how much your techs can flag (and get paid).
- OEM incentives = how much your salespeople can make on a deal.
- OEM approvals = whether accounting collects on that work or eats it.
The more you align your pay plans with OEM structure—and stay sharp on what’s reimbursed and what’s not—the more consistent, compliant, and profitable your comp process becomes.
All dealership roads lead back to the OEM at some point.
