Making money in car sales

A while back, a reader suggested I lay out the details of two or three car deals in a row, just to give everyone an idea of how much a dealership actually makes. I’ll do you one better. I’ll lay out an entire month for you, so you can see for yourself what the dealership made and what I. Before I go further, let me assure you these are real numbers. I’m not that guy. I’m just a regular schmo with tired feet and a big making money in car sales, working editor’s note: and writing his butt off to make a living. This was done to motivate us to sell our remaining ’13s, to make way for newer models. The other thing you might notice is that, for the first time in «Car Salesman Confidential» history, I am using actual customer names for added authenticity. So here we go:. OK, I lied. I’m a car salesman, right? Those aren’t actual customer names.

10 Ways to Make Money with your Car

I get paid a commission every time I sell a car. My commission is a percentage of the profit. At the dealership where I work, I get paid 25 percent of the «front-end» profit and 5 percent of the «back end. The back-end profit is found in financing and anything else we sell you, such as extended service contracts or GAP insurance. I think most people understand this, to some degree. What they don’t understand is that I only get paid if I sell a car. If I don’t sell a car, I don’t get paid. I make nothing. So if you come in and ask me to test drive a few cars, and I work numbers with you, and you take up three or four hours of my time, but you leave and don’t buy a car. I have made nothing.

How New-Car Commissions Are Calculated

I am not compensated in any way for the time I just spent with you. I just poured three hours down the drain. Prior to getting into car sales I had always been paid a salary or on an hourly basis. If I worked 40 hours a week, I was paid whatever the hourly wage was, times 40 hours. When I was salaried, I was getting a fixed amount each month, as long as I did my job. But after my first week in sales I realized I had just given up 50 hours of my life and hadn’t made one red cent. Because I hadn’t sold a car that week. Let me tell you, that is a strange and sobering thought. And it changes your perspective completely. The following is a slight exaggeration: Imagine that one day civilization collapses, and all the grocery stores close, and you suddenly realize that if you want something to eat, you’re going to have to go out and hunt it down and kill it. Otherwise you’ll starve.

These Days, the ‘Home Run’ Is Harder to Come By

Ever wonder why you’re attacked by a swarm of car salesmen when you drive onto a dealer’s lot? Some of it has to do with how car salesmen are paid and how their pay plans work. When car salesmen work on a commission only pay plan, the hard and fast rule is — if you don’t sell, you don’t get paid. Retail car sales can be a great and rewarding career choice, but it’s not for everyone.

My Recommendation for Car Shoppers

It may look like a world of balloons and bad tweed. But making a living on the lot is anything but a Sunday drive. Forget about the high failure rates, pressures to sell, and potential debts to their employers. Car salespeople also have to endure brutal tactics used by fellow salespeople. They also risk life and limb whenever buyers take them out on a test drive. The dealership loses money on these cars, but the salesperson still gets commission. In fact, the first car a salesperson usually shows you is a spiff. Many salespeople work purely on commission, meaning they only make money if they sell a car. If a salesperson has a dry spell, some dealerships will let them draw against their commissions until they can pay it back. When that happens, the only thing you can do is quit. One strategy for luring customers is to rotate the vehicles around the lot to convey a busy, vibrant environment. Action creates reaction.

Gap insurance is usually only recommended to buyers who make a very small downpayment on a car and finance most of the purchase. Thank you very much, for your lovely ideas I am very glade to read it. Gleeson,, Patrick. You can use that money and invest into something new that you always wanted to. You join a company online and wait for a sponsor to come by. Nice and sensible article, Thank for sharing with us!! Should you sell your car independently or trade it in? You can also lease out your car for a year and get money lump sum.

New Car Sales

Since there was no profit on the sale itself, there is no 5-percent commission. If you own a minivan or a MUV multi utility vehicle or even a recreational vehicle then you can use it to earn some money. Errands like groceries, vegetables, milk etc can be salee using your car. But the great thing is you don’t have to cook the food as you just have to rent your car to someone who can use it as a food truck. If your driving route is extraordinary that generates a lot of business then you will definitely be paid. The best part is, you are your own boss and set your own working hours without having any issues with the company.

They’ll try to guilt you into paying a higher price, but don’t pay attention to the whining. I’m going to reveal how dealers really make money, and why you should never feel sorry for. First of all, most people assume that dealers pay for all their vehicles and have a bunch of money tied up in their inventory. This is false. The vast majority of dealers take out loans to build their inventory and are essentially «renting» the vehicles.

Most Common Types of Car Salesman Pay Plans

If a monej sells the vehicle in less than a month, they making money in car sales make a tidy profit simply on ij holdback. But we’re just getting started. But wait, there’s more! Way more Most dealers don’t make the bulk of their profits on the sale of a new car. The big profit usually comes through arranging car loans, selling add-ons, and making money on your trade-in. They simply low-ball your trade-in, then turn around and sell it for a nice profit. Of course, that large a profit is not typical, but most dealers do make the bulk of their profit in areas other than the actual sale of the vehicle. Think about that next time a dealer is whining about not making any profit. These sites show you no-haggle prices from dealers closest to you — and the deals are usually really good. This should be the first step you take when negotiating your car price.