What’s One Example of a Company (Auto Dealership) That Came to You Stuck in a Bad PEO Contract — and How You Turned It Around?
How a New Jersey Auto Dealership Saved Over $100,000 by Switching PEOs
Most businesses don’t realize how much they’re overspending on their PEO — especially if they’ve been with the same provider for years. Pricing increases accumulate quietly over time, and without expert auditing or competitive benchmarking, employers often end up paying far more than they should.
This is exactly what happened to a South Jersey auto dealership that had been with the same PEO for a decade. After years of incremental rate increases — on administrative fees, workers’ comp, state unemployment, and health insurance — the dealership was significantly overpaying without even knowing it.
When PEO Blueprint stepped in, everything changed.
The Hidden Cost of Staying With the Same PEO Too Long
Like many long-term PEO clients, this dealership experienced “death by a thousand paper cuts.” Small, gradual increases across multiple pricing categories compounded over ten years:
Administrative fees quietly climbed far above market rates
State unemployment (SUTA) rates were higher than necessary — especially costly in New Jersey
Workers’ comp premiums increased despite a low-risk profile
Health insurance renewals compounded year over year, unrelated to the company’s actual risk
None of these increases felt dramatic in the moment. But over time, they created a massive and unnecessary financial burden.
How PEO Blueprint Reversed 10 Years of Price Creep
Once we took the dealership out to market, we reset every component of their pricing to competitive levels:
Admin fees reduced to standard — and in some cases below standard — pricing
SUTA rates significantly lowered (New Jersey employers save $433 per employee for every 1-point reduction)
Workers’ comp rates brought back in line with their true risk
Health insurance repriced based on actual employee risk, not outdated renewal history
Total employer savings: $98,000
Total employee savings: $20,000
Combined impact: $118,000 in annual savings
And this was achieved with only 25 employees.
The dealership’s owner summed it up perfectly:
“Do you know how hard it is to find $100,000 in savings as a 25-person auto dealership? This changed everything for us.”
Better Benefits. Lower Costs. Stronger PEO Alignment.
In addition to cost savings, the dealership:
Upgraded to a PEO that was a better cultural and service fit
Provided employees with richer benefits at lower costs
Increased take-home pay for staff
Passed along additional employer contributions because the savings were so substantial
This is what happens when you evaluate your PEO correctly — and why businesses should never stay with the same provider for ten years without a professional audit.
PEO Blueprint ensures you pay the right price, receive the right services, and partner with the right PEO — so your business and your employees win.
4 Key Takeaways:
Long-term PEO clients almost always overpay without realizing it.
Gradual increases in admin fees, workers’ comp, SUTA, and health insurance compound significantly over time.
A competitive market reset can deliver immediate and dramatic savings.
Most employers can reduce costs simply by benchmarking their PEO pricing against current market standards.
The right PEO doesn’t just save money — it improves employee benefits.
Lower healthcare contributions and better plan options drive higher satisfaction and higher retention.
Even small businesses can save six figures.
This 25-employee auto dealership reduced costs by $118,000 — proving that PEO optimization has massive impact at any size.
Video Transcription:
I have a client — an auto dealership in South Jersey — that had been with the same PEO for 10 years. And like any long-term vendor relationship, if you never evaluate or audit the contract, the pricing slowly creeps up over time. It’s the classic “death by a thousand paper cuts.” A PEO will gradually increase costs across different pricing categories, and while each small adjustment doesn’t feel significant on its own, they accumulate. Ten years later, the employer suddenly realizes their pricing is far higher than it should be.
Increases can come from cost-of-living adjustments, new product or service add-ons, workers’ comp renewals, or health insurance renewals — and many of these increases aren’t truly tied to the client’s actual risk. They often stem from the PEO mismanaging its own risk pool or simply passing along broad price increases.
This is why evaluating your PEO annually — or at least every other year — is so important.
For this particular dealership, their administrative fees, workers’ comp, state unemployment rates, and health insurance costs had all climbed significantly. When I took them to market, I reset their pricing to what a competitive baseline should look like today. For example, if their admin fees had increased 20% over 10 years, I brought those fees back to standard market-level pricing — and in some cases below that.
If a company is paying $50,000 in admin fees and I reset it to $30,000, that’s immediate, hard-dollar savings.
In this client’s case, several areas were overpriced:
1. Administrative fees – too high for their size
2. State unemployment (SUTA) – especially painful in New Jersey, where the taxable wage base is $43,300
3. Workers’ compensation – steadily inflated over the years
4. Health insurance – compounding increases unrelated to their true risk profile
To put SUTA savings into perspective: in New Jersey, a single point of SUTA rate equals $433 per employee. For 100 worksite employees, that’s $43,300 in savings for just one point of rate difference. This dealership only had 25 employees, but the savings were still meaningful.
Workers’ comp had also increased unnecessarily. Even a jump from $10,000 to $15,000 may seem small, but that’s a 50% increase — and it adds up when combined with increases in other areas.
On the health insurance side, going back out to market resets the client’s risk profile. Instead of compounding 8–15% increases for a decade, a new PEO evaluates the client based solely on their current health risk. That alone can generate massive savings.
When we combined all these savings — admin fees, SUTA, workers’ comp, and health insurance — the dealership saved roughly $98,000 in hard-dollar employer costs. Their employees saved an additional $20,000 due to lower benefit contributions.
The owner said something that really stuck with me:
“Do you know how hard it is, as a small auto dealership with 25 employees, to find $100,000 in savings? This changes everything.”
Not only did the employer save money, but the employees received:
Equal or better benefits
Lower healthcare costs
Higher take-home pay
The employer even chose to reinvest part of the savings into richer benefits for his team.
At the end of the day, they moved to a PEO that was a better cultural and service fit, reset all their pricing, improved benefits, and reduced costs for both the company and employees. It was a win across the board — the perfect example of why periodic PEO evaluation is so important, especially for long-term clients who haven’t gone to market in years.
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