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How are a car salesperson's commissions structured? How much does the average car salesperson earn?

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. (Some dealerships use "sales teams." In this method, one salesperson will give you the test drive, do the write-up, etc. and the "team manager" will close the deal. In this case, they share the commission.) So if you buy a new car for, say, $300 over the invoice cost, the salesman may earn only a $50 to $75 commission.

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 a certainn amount of 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 (paint protection, extended warranties, etc.), selling a particularily hard-to-sell vehicle, and so on.

According to a recent national survey, the average commission for car salesmen is $250 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.


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