Stair-Step Incentive
A stair-step incentive is a manufacturer bonus program that pays dealerships escalating per-unit bonuses based on sales volume thresholds.
A manufacturer incentive program that pays dealerships escalating bonuses based on sales volume thresholds. For example, a dealer might receive $500 per unit for selling 80 vehicles, but $750 per unit for selling 100 — making those last 20 units worth significantly more. Stair-step pressure can lead to increased desk overrides as managers push to hit thresholds, often approving aggressive pricing on the final units needed to reach the next tier. The economic logic is sound (the bonus on all units more than offsets the per-deal margin loss), but without override tracking, it is impossible to verify whether the discounting was proportional to the incentive at stake.
Category: Finance
Unlock calculator
See your estimated override exposure
Enter your work email once to unlock the calculator for this session. Same privacy as our extension lead flow.
By continuing you agree to hear from DealerInt about your trial. Unsubscribe anytime.
Related terms
Learn more
Get override visibility on your DMS
30-day free trial. No credit card. Works alongside your existing tools.