How much commission do sales people make?

[Bloody Marty]

This is a funny read here. I sell (new & used) cars. Every dealership generally has a different pay plan & there are several ways that we get paid, not just on the vehicle.
I don't get any salary at all. In fact, if I don't sell any vehicles I don't eat, but, I eat well...... 100% commission. No safety net, no handouts, no union bullshit. Produce or get out. If you sweep streets for a living & you suck at it you won't be a street sweeper long & you won't want to be. Same for sales of any kind. Do people right, know your shit & get paid well.
People are so scared of car dealerships & thinking they are being ripped off at every turn that they fail to "listen" & then think they have a better way. I produce not by screwing people over but by taking care of my people that trust me to be there during & then after the deal is done.

There is no way I'd ever buy from a car vending set up like Carvana, etc.
Pick your dealership & salesperson just as you would the vehicle, carefully. There are bad ones out there for sure, but not all.
Good luck.

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[LarryB]

Dam so if they are making $8k on a car, the sales guy is making $2k. That's a nice chunk for these young adults peddling cars.

That would be a pretty big margin over dealer cost if you just bought the vehicle, I suspect it is lower. However, the real money is made in the finance office … warranty, rustproofing and security products have obscene margins. Some may push 75% or more margin.

 

[csjlu]

Nonsense. They pay much less than invoice that’s an arbitrary bullshit figure to make consumers think they got a great deal.

Dealers pay invoice. Dealers also receive holdback, which in Jeep's case is 3% of MSRP, after sales are recorded and the selling period closes. Temporary manufacturer-to-dealer incentives that retail buyers may not know about can also sweeten the pot. In Jeep's case, true dealer cost is generally MSRP-8%, unless there is a special incentive on. Sketchy dealer services and doc fees can also pad margin.

Some dealers are willing to sell new Jeeps at a loss in order to boost sales volumes and generate higher margin revenues from others parts of the dealership, like used car trade ins, financing, extended warranties and insurance, service bay revenues, and parts/mods.

 

[dgoodhue]

No, that sounds like a used car salesman's BS. Users around here regularly get $6k under invoice, add on the 'dealership fees' of a few hundred, at least $6500 in margin there. What are the holdbacks and other kickbacks after that? Do they get reimbursed for FCA employee discounts? if a $60k Wrangler is sold for $54k, what's the dealer actually paying which would equate their margin?

The typical best deals are 8% under and usually require using their financing. 6000 under invoice would be 75k Jeep with 8% under invoice. What is well known is that they pay invoice, the get 3% of MSRP as holdback and tread lightly adds another 2%. This is about 5.5% below invoice. Dealer have a couple more kick backs on normal sales. I don’t know Jeep specifically but I would not be surprise if it is 2-3%. They get money from Chrysler Capital (often more from a local bank) for financing, a % of tax all this financing warranty & plans, the document fee and other monthly sales incentives.

I think dealers like that they ‘pay invoice’ so they can tell the customer with a straight face that is their cost.

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