| How are a car salesperson's commissions structured? How much does the average car salesperson earn? |
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Car salesmen are paid on a percentage of the profit of the sale. This percentage varies from dealership to dealership but usually runs in the 20% to 25% range. But they have from $100 to $200 minimum commission. It means if you buy the car for invoice they still make $100 to $200 a car. In addition to his commission, though, the salesman can earn bonuses that are available from both the dealership and the manufacturer for good sales performance. Usually bonuses - or "spiffs" - are offered to any salesman who sells, say, over 8 cars in a month. "Spiffs" may also be offered for meeting certain profit goals (for example, selling a car for $1,000 over the invoice cost), selling certain profit-making extras (such as paint or fabric protection, alarms, extended warranties, etc.), selling a particularly hard-to-sell vehicle, and so on. Many dealerships pay weekend spiffs. For example, if salesman sells certain amount of cars over the weekend he gets somewhere from $100 to $500 bonus. The average commission for car salesmen is $300 per vehicle sold. The average selling price per vehicle is about $1,000 over the invoice cost. And the average number of cars sold is 8 to 10 vehicles per salesman per month. |
