Q:
What Is the Average Commission Rate for Auto Sales?
A:
Quick Answer
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.
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Full Answer
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.
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