What do the salesperson gets?

In general, most car salesmen make about 25% of the profit on new cars. Of course, they never get to see how much profit was really made...

 

Normally 25% of the gross, after expnses and "pac".....Same with most dealerships..Chevy guys make on avg. $250 a car, but are expected to sell 10-20 cars per month..where as an exotic car sales person may sell 1-3 cars per month... Think of the selling used cars as a promotion..new car sales normally fall under a "mini" with a pull board..avg new car guy makes $100 per car (in the normal car business)..

 

That's all? What do these guys DO all day then?? Surf the net and post on FChat?

Ken

 

Yep!!

look at it like this, the largest franchised lamborghini dealership sold just over 100 cars in 2007! That 100 cars a year! The largest ferrari dealership did over 300 cars in 2007..

Where as a Chevy dealership is slow if it sells 300 cars per MONTH....

But in reality the job, is more stay in touch with past customers, following up with new callers and finding cars...

 

There's profit in car manufacturing? Don't tell that to Detroit. They're praying for a bailout package.

 

As a former Ferrari saleman I do not know of anyone in this business who makes 25% of the gross on a Ferrari. Most high-end salespeople have a comission structure that is 10 to 20% of the gross profit (based on invoice) in a car. Back in 'the good old days" of the late 80's TR's had 20% mark-up, based on a 20% comission of the gross there was good money selling Ferrari's. keep in mind production was far less and one had fewer opportunites to sell a car.

Since the margins have shrunk, and with most cars being "pre-sold" many stores have cut the salesman's comission. Many stores "cap" a comission if it exceeds a certain amout. I've heard of stores capping comissions at $1,000, and I've heard of stores capping comissions at $7,000.

In the early to mid 80's, and again in the early to mid 90's selling Ferrari's was not the easist job, from the late 90's till I suspect recently it was very easy!

 

Of course!

 

I know dealers that pay 25% of the gross after pac and expenses...

New car sales are diffrent at most stores, they are not paid on the gross like pre-owned sales people are. Normally they are paid a fixed comp, or they are paid a mini with spiffs...

 

I always thought the real profits were in service and parts?

 

Not the "real" profits but the fixed operation cost...

In other words the parts and service keep the lights on..the car sales make the profit...

 

Chris:

Not to split hairs....are you talking about 25% of the gross on a new Ferrari? If so I applaud the owners for taking care of their employees. My earlier statement was refering to new cars, forgive me for not being more specific.

Many (non-Ferrari, and prehaps some Ferrari) dealerships do pay "flats" or "mini's on most new car purchases, quite often combined with a volume bonus. A difficult way to make a living...10 years ago one could make 6 figures relatively easy at a Mercedes or BMW store, now most of them seem to be paying $300 or $400 flats on the volume cars....

 

Well that depends on how much gross profit there is in $130k car....It could be $5,000 or less....way less..or way more..

In car sales you live and die by the sale..i myself am against a gurentee and feel that gurentee's takes the hunger away...If you do not sell car you do not get paid...at least at most dealerships... Most dealers will not hire a first time sales person though to sell ferrari's..Are you looking to sell cars?

 

Dimitar...how much he makes is dependant on how much profit is in the car, to the late Max Hoffman "you make your money when you buy the car"....I suspect right now many Ferrari stores are stuck with too much inventory that was taken in prior to the last sixty days. In an ideal world I would hope the dealer could make at least 10% on car, say $13000 profit - 20% commission means $2600 per sale. $5,200 is not much money to make in one month.....

I think one thing clients usually forget it that most trades come from existing customers, I've had some clients purchase 10+ Ferrari's over the years. When you take a car in trade and you are selling another one you have to be very generous (or at least that is how I do business) to an existing client.....as such it is difficult to "steal" a trade.

I've sold $175,000 cars and made a $500 "mini" as the store was buried in the car.....and I have also done very handsomely, particularly on older cars!

 

I was selling Toyotas for one of the last independent dealers in Texas. The pay structure looked like this

$50 flat (minimum, no matter how many you sold)
15% of the financing profit, with a $15 minimum- no maximum
25% of the profit if you made $0 to $999 profit
30% of the profit if you made $1000-4999 profit
35% of the profit if you made $5000+ profit, and you were no longer "packed" on the deal.

I was a dark cold night in December in Dallas, Texas. A lone gentleman walked in the dealership and knowing what you know about selling cars, never take a single person as an "up" if you can avoid it. They'll always "have to talk to the wife."

The guy wanted to look at Land Cruisers. Whatever, I had a few hours to burn till I could leave.

Three hours later, we had one of the first Land Cruisers sold. Nearly $30,000 worth of chrome wheels, gold GAP coverage, brush guards, leasing, extended service contracts...

The MSRP had a market adjustment (just slang for a ripoff) of $10,000. All told, there was nearly $40,000 on top of the MSRP, which had a $9,000 profit built in. I couldn't believe my eyes when that commission voucher showed up three weeks later. These are the mythical stories that trick all new salesmen into joining the ranks of the plaid suited smooth talkers. But this one actually happened.

Don't ask me how many Toyota Camry and Corollas I sold working into midnight for a $50 mini. I'd rather not talk about it.

 

I used to be partners is another dealership here in Sioux Falls, that sold everyday daily driver cars, priced from $5,000 to around $35,000..we ware a used car dealership, not connected with any new car franchise. We did pay a gurentee every month, but we paid a flat fee per car. The comp started at $100 per car sold 1-10 and $200 10-20..if the salesperson sold more then 20 cars, from car 1 went to $350 per car..the gurentee was $2,000 per month and you did get that no matter what. BUT we set goals, if you did not sell a single car, you got paid, but you also did not have a job anymore. The avg. saleperson there sold 17 cars per month, the avg today is 15 cars per month..the avg nation wide is 12 cars sales per month....

 

Not anymore


There is a new meaning of s l o w lately in the Chevy world.
Only thing moving is the Malibu. And it's not anywhere near 300 a month
Wanna buy a Chevy dealership here in SoCal?

 

MAYBE!! I know a dealership here in town, the local Chevy dealership and when they sell 300 cars per month, its slow for them...Then again here in Sioux Falls we have not been hit like the rest of the country...

And what you are saying is true, but most used car departments are still very strong...if there GM notices and moves to less new and more pre-owned...

 

When I sold cars, I usually only sold 12-14 per month (mix of new and used). However, with the exception of my first month in the business out sold the guys who were pushing the most cars when it came time to count the profits. As a result, I was routinely rewarded with the top sales person award as well as taking home one of the largest paychecks outside of management.

The ability to make money on my deals is what landed me a job in management after only 5 months in the business.

However, that said, I left the business behind... but want to get back in one of these days... on the ownership end.

 

I myself had a 28.8 cars sold 3 month avg. I started selling cars in 1994 when I turned 18 and have never left! I love selling cars and the car businesses!!!

Most good car sales people make more then mangers...I know I did..Managers are the steady guys, as a owner you have to have your best sales people on the floor not behind the mangers desk...reminds me of a story my Grand pa told me, (No I am not a PhD you know "papa had a dealership" ) ...

Back in the 60's my Grand pa owned a small single point Ford dealership in West St. Louis county. At there dealership they had 5 sales people and a dog that all the customers loved! Customers would bring there kids for weeks after they bought the cars! Soon the dog was was selling more cars then all 5 sales people combined!!

One day my Grand Pa decided that since the numbers ware so high now they would hire a new sales person. During the new guy's training he noticed the dog, running all over the show room greeting customers and just having a great time! So the new guy ask one of the old timmers who the dog was, the old timmer said "that's our new sales mangager". The dog ran over to the old timer and the new guy and looked to like he wanted to be petted. "Yep" said the old timer, "He's sold more cars then anybody here, so we have promoted him to manager" The new guy understood and went about his Training.

Over the next couple of day's the new guy noticed that the dog had become lazy, just laying over in the coner, somtimes geting up to get some water, or a treat. The new guy worried, went to my Grand pa during a sales meeting and asked " I have notice the dog is getting tried or somthing he's not greeting customers anymore, and running all over the showroom or even playing with children that come in! Is everything ok with him?" My Grand pa turned to the new guy and said "No, you guy's made the mistake and promoted him to a sales manager, so he is acting like a sales manager and now he wont get off his ass"!!!!

I love this this story!!

 

A "mini" is a fixed minimum comp paid...Like if the mangers has to cut the deal to a "no profit deal" then you are paid a flat mini...like one poster stated $50..most mini's are $100 or so....

Are you looking to sell cars?

 

Have you ever sold cars before? If not, then get your experince at a daily driver store..