What Is the Average Commission Rate for Auto Sales?

What Is the Average Commission Rate for Auto Sales?

What Is the Average Commission Rate for Auto Sales?

The average auto salesman earns about 25 percent of the dealership's gross profit on a car that he or she sells. The gap between the manufacturer's suggested retail price and the dealer invoice varies among different cars and different dealers.

Add-ons, such as extended service contracts, tinted windows and an extended warranty, offered during the sale at a dealership are a major source of profit for the dealer. Car salesmen make approximately 5 percent of the profit made from add-ons. Dealers often offer incentive bonuses to salesmen to encourage more sales. For example, a dealership may offer a salesman the potential to earn an extra $175 per car if he or she sells at least 20 cars in one month.