Practically every reader has gone through the aggravation and hassle of buying a car from a car salesman at a new or used car dealership. As the haggling commenced in full force, and then finally finished, you have no doubt wondered while you were wiping the sweat off of your brow how much these bargainers of automobiles actually make while they are driving you crazy in the car selling process. This article answers the question in some detail, and the honest answer may surprise you.
Car Salesmen Commissions
The fact is that car salesmen are generally paid a commission for each and every sale, or a percentage of the profit made on the sale of a new or used vehicle. While this percentage amount actually varies from one dealership to the next, it commonly is in the neighborhood of from twenty percent to twenty-five percent. There are dealerships now which operate on the sales team concept. You have possibly been a party to this idea, where a first sales person takes you on the magical test drive and writes up the deal proposal for you, while the sales team manager actually closes the sale and deal with you. In such a novel scenario, the two share the commissions. This all means that if you the car buyer purchase a new car for $300 more than the invoice price, which is the dealership’s cost from the manufacturer, then the car salesman is making a meager commission of only from $50 to $75. This is not exactly a lavish living.
Car Salesmen Bonuses
On top of his or her commissions, these sales people also have the opportunity to earn bonuses. Such bonuses are offered by both the car manufacturer and the car dealership in recognition of solid sales performance. These are referred to as spiffs. These are given to any sales person who manages to sell more than eight cars in a single month. Such spiffs can also be given out for attaining a particular profit goal for the cars sold. As an example, the dealership might mandate that a car has to be sold for more than a thousand dollars over the invoice price. They can also be offered for selling a variety of upgrades which are highly lucrative, like alarms, fabric protection, paint protection, or extended warranties. Another bonus category is for successfully selling an unusually difficult to sell car.
Average National Car Sales Person Commissions
A national survey recently demonstrated that the typical car sales person’s commission rounds out at approximately $250 for every car sold. On top of this, the per vehicle average sales price is around a thousand dollars over the invoice price and cost. Besides this, the typical number of cars which are sold by a sales person are between eight and ten such vehicles every month. This makes the monthly commissions an average of $2,250, or $27,000 per year. Keep in mind that this figure does not include any bonuses earned.
Average National Car Sales Person Earnings Per Year
The Pay Scale Report reveals the average car sales person salaries. These are ranked by their amount of experience. Beginners earn from $22,000 to $36,000 per year. With one to four full years of experience, these people make $21,916 to $45,588 per year. With five to nine years of experience, they receive from $28,925 to $57,182 per year.
