FastTags

The ones who pull over $100,000 they only sell used? Or they sell both?

pman6

so maybe it's better to slip the salesman a hundred "tip", if that's legal ?

hell, I'll pay the salesguy his cut if it means a bigger discount for me.

FastTags

No. Salesman dont make deals, Sales Managers do. There is a thread All about leasing in the Car chat forum, read it. Somewhere in It explains how the sales works.

Bearcat

Unless you are a car dealer owner and ok at spilling your guts, I don't think any of us know the full story of what the dealership makes.

spwolf

i was car dealer owner, and I am telling you we made between 7% and 12% without any discount (which is impossible to make these days).

And manufacturers make between 2% and 10% operating margin as well.

I understand that urban legends tell you that everyone makes 50% on the vehicle, but thats not true, and it is easily checked and confirmed by looking at financial records of both car manufacturers and big dealership groups.

FastTags

What spwolf said. 12% only if sells at msrp, which is very rare especially if you sell US cars. The only car I have seen sold over MSRP was the brand new vette. Most cars sold on avg $300-400 over invoice. Which is like 1- 3% depending on the price.

Btw i worked as a selsman and i have wokred for used car dealership. I also have friends who have their own used car dealership. Which is completely different from new car dealerships with a mach larger profit margins

Joeb427

iTrader: (1)

Dealerships could never stay open just selling new vehicles.
The service dept and then used vehicle sales keep a dealership open.

FastTags

Exactly what I said in previous post. The most profit comes from service and selling used cars, which has a much larger profit margin, on avg they make $2500 per car. Thats where the real $ is. They also make out quite nice when they sell packages like oil, underbody, window treatments, warranty is another big one, z-bart etc

Ice350

iTrader: (1)

I've been a salesman only 2 years and no one really likes teaching you the business. But from what I see, the money is made from service, body shop then sales. But it's not just selling the car. There's parts, accessories, warranties, financing and the sales we get from the boutique and cafe.
Helping the dealership from suffering too much from the discounts are manufacturer rebates and dealer hold-backs...along with volume bonuses for selling all the cars they send you.

Salesmen at low volume dealers make good money per car because they don't give massive discounts and share the proceeds with the salesmen.
Volume stores like mine, the salesman makes very little per car but gets bonuses for selling lots of cars.
The trick is to be consistent. You might make 10K one month and only 2K the next. Volume stores like ours sells lots of cars and need a gazillion sales people to ensure every customer is engaged. We have so many salesmen it is down right depressing sometimes.

The salesmen who have been at the same store 3 years should be doing well because of repeat business and referrals.

Everyone needs to find their niche. I do okay because I love the cars and I provide information others may not give. I use exuberance and communication. I am straightforward and endeavor to be honest. Soon, I'll have a lot of repeat business and things will really take off.

It's not an easy job and most give up between 2-6 months. Maybe our system doesn't work for them. Maybe selling cars isn't for them. But there is tremendous turn over. We have a core group that's been there for years but the majority turns over every few months.

Then there are the personalities of car sales people. I'm a christian working with people who curse excessively, drink....I won't go into that too much but you get the point. I have have to stand up for myself forcefully several times or be eaten alive. Thankfully, although I'm a nice guy....I have a streak of craziness from my pre-christian days. If you're cool, I'm cool. You cross me, I will retaliate with more than you gave me. I will never start trouble but if you start with me, I will finish it. Then pray for forgiveness afterward. The atmosphere is better at a store that isn't volume but I don't plan on moving out of south florida.

I try to have fun everyday. I don't take it too seriously and don't obsess over money. I love the product and love the challenge of selling the car. Don't know how long I'll stay but I am having fun for now.

Leasing has saved the dealerships. Leasing a new car every 2-3 years brings the traffic. You get back cars you can then put on your used lot. Don't fret, the car business is alive and well.

That's about it. My rendition of life as a car salesman.

Ice350

iTrader: (1)

At our dealership, we all can sell both. Some stick with a certain stream but I try to sell everything that moves. We have new and used Lexus. New and used Subaru. We have a pre-owned assortment of other brands, as well. It moves, I'll sell it.

FastTags

Thats not bad. At the dealership I worked at, used cars were only allowed to sell by people who work in the used department who have over 10y experience. New car salesman couldnt touch used and barely made any money, unless you been there for 5y or more no one made over $50k.

FastTags

Exactly what Ive been saying, thank you. You ht the nail about large turn over in sales personel.

FastTags

Here is run down of a salesman salary, at least it was for me.

Salary: $250/wek + free car+ 25% of the profit per car

If you made say $800/week, you will not get the $250. If i made under $250 or nothing that week they will give me $250 but if i made money next week, they would take $250 from me.

If the car sold at invoice i would het only $100. If i could not deliver the vehicle (was my day off) and someone else delivered it, we split the deal 50/50, so i only get $50.

If someone else talk too the customer first its a split deal as well.

Cars bn$15-25k avg profit margin from msrp is $1200. $25k-35k profit around $2500. $35-45k profit $3200 and so on.
So on the $1200 profit if sold at msrp saleman get 25%= $300

90% of new cars are sold on avg $300-600 over incoice, so 25% from $300 is $75, that means you will get $100.

spwolf

in many true sales jobs, you wont be able to make a lot of money before you work it at last 3 and probably 5 years.

Key is repeat customers and referrals, without that, sales job commissions do not work.


But if you stick with it and you know how to do it well, then you have a great chance to make money later on.

Similar to that, my bro started selling insurance 4 years back... first 2 years were brutal, very low pay... 3rd year is all right, 4th year is now really good and in 5th year he will start making up for brutal 1st and 2nd year.

So if you ask average insurance salesman, who is there for 1-2 years, he will tell you that they literally make no money at all. However if you ask my bro who is there for 4 years now, he makes more money than average manager at some other job.

So all commission based sales jobs are like that - at least 3-4 years before decent money is made.

FastTags

I know that. I am not the ne who thinks otherwise. Another guy was arguing that my numbers are way off and that salesman make $60-100l easy