Re: how much do stealerships mark up new cars by?
 

And you wonder why used car salesman are amongst the least trusted of all
professions? I hope you are more honest with your customers than you are
with your peers.
-Brian


"IsellJeeps" <jsprauer2000@yahoo.com> wrote in message

> call a Jeep dealer near you and ask for the new car manager..
> tell him you are from abc motors and are trying to trade for an 05 unlmtd
> rubi with 2500 miles.(people dont like it anymore) ask what invoice is
> with
> all options and ask if there are any rebates?? he will think you are a
> dealer...then ask "are you a buyer if I trade for it" & what price... he
> will spill his guts on invoice rebates and all so you will have a good
> idea
> what to pay for a new one!!!! should I write a book or what!!!!
>
>
> --
> Jarod Sprauer
>
> Talk is JEEP at
> www.sprauermotorsports.com
> 281-807-JEEP (5337)

Re: how much do stealerships mark up new cars by?
 

And you wonder why used car salesman are amongst the least trusted of all
professions? I hope you are more honest with your customers than you are
with your peers.
-Brian


"IsellJeeps" <jsprauer2000@yahoo.com> wrote in message

> call a Jeep dealer near you and ask for the new car manager..
> tell him you are from abc motors and are trying to trade for an 05 unlmtd
> rubi with 2500 miles.(people dont like it anymore) ask what invoice is
> with
> all options and ask if there are any rebates?? he will think you are a
> dealer...then ask "are you a buyer if I trade for it" & what price... he
> will spill his guts on invoice rebates and all so you will have a good
> idea
> what to pay for a new one!!!! should I write a book or what!!!!
>
>
> --
> Jarod Sprauer
>
> Talk is JEEP at
> www.sprauermotorsports.com
> 281-807-JEEP (5337)

Re: how much do stealerships mark up new cars by?
 

And you wonder why used car salesman are amongst the least trusted of all
professions? I hope you are more honest with your customers than you are
with your peers.
-Brian


"IsellJeeps" <jsprauer2000@yahoo.com> wrote in message

> call a Jeep dealer near you and ask for the new car manager..
> tell him you are from abc motors and are trying to trade for an 05 unlmtd
> rubi with 2500 miles.(people dont like it anymore) ask what invoice is
> with
> all options and ask if there are any rebates?? he will think you are a
> dealer...then ask "are you a buyer if I trade for it" & what price... he
> will spill his guts on invoice rebates and all so you will have a good
> idea
> what to pay for a new one!!!! should I write a book or what!!!!
>
>
> --
> Jarod Sprauer
>
> Talk is JEEP at
> www.sprauermotorsports.com
> 281-807-JEEP (5337)

Re: how much do stealerships mark up new cars by?
 

wraithyjeep wrote:

> usually mark up is 10% so say a 20K$ sx 2.0 they will make 2000$ the
> dealer gets 1800 and the sales guy gets what's left.

Huh?

In most dealerships that go off of a commission based selling model, if the
car has say 10% markup, which is over invoice, and if they could sell it
for full sticker (say it's a new Mustang GT convertible), then here's how
it gets broken down.

First, the owner puts a "pack" on the car. This can vary. Usually, there's a
common amount on all cars, but very well selling cars get a higher pack.
This is what the owner skims off the top before he pays any commissions.
So, the commission is based on a number something less than what the car
sold for over invoice. Now, slow selling cars often have small and
sometimes no pack at all, but it doesn't matter because those cars almost
always sell for invoice, negating a pack anyway. Often with a hot selling
car, the pack is very steep. I knew someone that worked at a
Chrysler/Plymouth dealership when the Prowlers were new, and there was a
$4000 pack on it (it sold for something like $4000 over sticker). Some
dealerships put a pack on based on a percentage...something like 4% of the
purchase price. Some dealerships have a set pack. The dealership I used to
sell for had a $700 set pack. Then, there is usually a fee taken out for
dealer prep. They used to add this into the car's price years ago, but now
it gets taken off the margin made on the car. Usually, this is something
like $150. Now, it doesn't cost them $150 to prep the car, even if the
thing sat on the lot for 6 months getting washed quite a few times. Then,
what's left, the salesman gets a commission off of. This varies based on a
number of variables. Usually, more expensive cars that command a higher
profit get smaller commissions. I had a friend that sold BMW's and his rate
was 18% and it was a static rate, meaning the rate didn't increase after a
sales goal has been achieved. That brings me to the second variable:
graduated commission rates. Many dealerships have graduated commissions,
meaning that after a predetermined sales goal, the salesman gets a higher
commission. Some dealerships have retroactive rates, where after meeting
that goal, all of his cars sold are based on the higher rate. Some,
however, do not.

Now, let's base this scenario on what my particular dealership did. Using
your $2000 markup on a $20,000 car, the dealership took a $700 pack and
$150 prep fee off the top. That leaves us with $1150 over invoice. The
salesman, at the base rate, made 25% of that figure, which would be $288.
After selling 8 vehicles (at my old dealership), he goes to 30% commission,
and his commission would have been $345. At the top commission level, 35%,
he would have made $403. Now, this is all assuming that they had a home run
hit on the car, which is very, very unlikely.

An average month for me, during better times would have been about 12
vehicles sold with about 8 of them sold at or around invoice, giving me a
minimum commission, which was $100, and I likely had 2 cars that paid a
little better and 2 cars that paid very well - which would have been a Ram
Air Trans Am (rare back then) and/or a used car. The biggest commission I
had ever gotten was about $750 for a 1997 Ram Air Trans Am sold new. That
was a rarity!

If any of you think new car salesmen are making a good living, you're highly
mistaken. Theres a reason that from year to year almost the entire sales
staff has turned over. They usually don't make squat in the larger picture.
Sure, the months of March through June are usually pretty good, but
September through February are usually pretty rough. Most salesmen that I
ever worked with made an average income at best. There's always that one
guy, though, in each dealership that makes good money. But, he sees a lot
of customers, and works lots of hours to move that many cars. He's been
doing it a long time and has slowly built himself up to that point. This
isn't the average sales guy, though.

--



Registered Linux user #378193

Re: how much do stealerships mark up new cars by?
 

wraithyjeep wrote:

> usually mark up is 10% so say a 20K$ sx 2.0 they will make 2000$ the
> dealer gets 1800 and the sales guy gets what's left.

Huh?

In most dealerships that go off of a commission based selling model, if the
car has say 10% markup, which is over invoice, and if they could sell it
for full sticker (say it's a new Mustang GT convertible), then here's how
it gets broken down.

First, the owner puts a "pack" on the car. This can vary. Usually, there's a
common amount on all cars, but very well selling cars get a higher pack.
This is what the owner skims off the top before he pays any commissions.
So, the commission is based on a number something less than what the car
sold for over invoice. Now, slow selling cars often have small and
sometimes no pack at all, but it doesn't matter because those cars almost
always sell for invoice, negating a pack anyway. Often with a hot selling
car, the pack is very steep. I knew someone that worked at a
Chrysler/Plymouth dealership when the Prowlers were new, and there was a
$4000 pack on it (it sold for something like $4000 over sticker). Some
dealerships put a pack on based on a percentage...something like 4% of the
purchase price. Some dealerships have a set pack. The dealership I used to
sell for had a $700 set pack. Then, there is usually a fee taken out for
dealer prep. They used to add this into the car's price years ago, but now
it gets taken off the margin made on the car. Usually, this is something
like $150. Now, it doesn't cost them $150 to prep the car, even if the
thing sat on the lot for 6 months getting washed quite a few times. Then,
what's left, the salesman gets a commission off of. This varies based on a
number of variables. Usually, more expensive cars that command a higher
profit get smaller commissions. I had a friend that sold BMW's and his rate
was 18% and it was a static rate, meaning the rate didn't increase after a
sales goal has been achieved. That brings me to the second variable:
graduated commission rates. Many dealerships have graduated commissions,
meaning that after a predetermined sales goal, the salesman gets a higher
commission. Some dealerships have retroactive rates, where after meeting
that goal, all of his cars sold are based on the higher rate. Some,
however, do not.

Now, let's base this scenario on what my particular dealership did. Using
your $2000 markup on a $20,000 car, the dealership took a $700 pack and
$150 prep fee off the top. That leaves us with $1150 over invoice. The
salesman, at the base rate, made 25% of that figure, which would be $288.
After selling 8 vehicles (at my old dealership), he goes to 30% commission,
and his commission would have been $345. At the top commission level, 35%,
he would have made $403. Now, this is all assuming that they had a home run
hit on the car, which is very, very unlikely.

An average month for me, during better times would have been about 12
vehicles sold with about 8 of them sold at or around invoice, giving me a
minimum commission, which was $100, and I likely had 2 cars that paid a
little better and 2 cars that paid very well - which would have been a Ram
Air Trans Am (rare back then) and/or a used car. The biggest commission I
had ever gotten was about $750 for a 1997 Ram Air Trans Am sold new. That
was a rarity!

If any of you think new car salesmen are making a good living, you're highly
mistaken. Theres a reason that from year to year almost the entire sales
staff has turned over. They usually don't make squat in the larger picture.
Sure, the months of March through June are usually pretty good, but
September through February are usually pretty rough. Most salesmen that I
ever worked with made an average income at best. There's always that one
guy, though, in each dealership that makes good money. But, he sees a lot
of customers, and works lots of hours to move that many cars. He's been
doing it a long time and has slowly built himself up to that point. This
isn't the average sales guy, though.

--



Registered Linux user #378193

Re: how much do stealerships mark up new cars by?
 

wraithyjeep wrote:

> usually mark up is 10% so say a 20K$ sx 2.0 they will make 2000$ the
> dealer gets 1800 and the sales guy gets what's left.

Huh?

In most dealerships that go off of a commission based selling model, if the
car has say 10% markup, which is over invoice, and if they could sell it
for full sticker (say it's a new Mustang GT convertible), then here's how
it gets broken down.

First, the owner puts a "pack" on the car. This can vary. Usually, there's a
common amount on all cars, but very well selling cars get a higher pack.
This is what the owner skims off the top before he pays any commissions.
So, the commission is based on a number something less than what the car
sold for over invoice. Now, slow selling cars often have small and
sometimes no pack at all, but it doesn't matter because those cars almost
always sell for invoice, negating a pack anyway. Often with a hot selling
car, the pack is very steep. I knew someone that worked at a
Chrysler/Plymouth dealership when the Prowlers were new, and there was a
$4000 pack on it (it sold for something like $4000 over sticker). Some
dealerships put a pack on based on a percentage...something like 4% of the
purchase price. Some dealerships have a set pack. The dealership I used to
sell for had a $700 set pack. Then, there is usually a fee taken out for
dealer prep. They used to add this into the car's price years ago, but now
it gets taken off the margin made on the car. Usually, this is something
like $150. Now, it doesn't cost them $150 to prep the car, even if the
thing sat on the lot for 6 months getting washed quite a few times. Then,
what's left, the salesman gets a commission off of. This varies based on a
number of variables. Usually, more expensive cars that command a higher
profit get smaller commissions. I had a friend that sold BMW's and his rate
was 18% and it was a static rate, meaning the rate didn't increase after a
sales goal has been achieved. That brings me to the second variable:
graduated commission rates. Many dealerships have graduated commissions,
meaning that after a predetermined sales goal, the salesman gets a higher
commission. Some dealerships have retroactive rates, where after meeting
that goal, all of his cars sold are based on the higher rate. Some,
however, do not.

Now, let's base this scenario on what my particular dealership did. Using
your $2000 markup on a $20,000 car, the dealership took a $700 pack and
$150 prep fee off the top. That leaves us with $1150 over invoice. The
salesman, at the base rate, made 25% of that figure, which would be $288.
After selling 8 vehicles (at my old dealership), he goes to 30% commission,
and his commission would have been $345. At the top commission level, 35%,
he would have made $403. Now, this is all assuming that they had a home run
hit on the car, which is very, very unlikely.

An average month for me, during better times would have been about 12
vehicles sold with about 8 of them sold at or around invoice, giving me a
minimum commission, which was $100, and I likely had 2 cars that paid a
little better and 2 cars that paid very well - which would have been a Ram
Air Trans Am (rare back then) and/or a used car. The biggest commission I
had ever gotten was about $750 for a 1997 Ram Air Trans Am sold new. That
was a rarity!

If any of you think new car salesmen are making a good living, you're highly
mistaken. Theres a reason that from year to year almost the entire sales
staff has turned over. They usually don't make squat in the larger picture.
Sure, the months of March through June are usually pretty good, but
September through February are usually pretty rough. Most salesmen that I
ever worked with made an average income at best. There's always that one
guy, though, in each dealership that makes good money. But, he sees a lot
of customers, and works lots of hours to move that many cars. He's been
doing it a long time and has slowly built himself up to that point. This
isn't the average sales guy, though.

--



Registered Linux user #378193

Re: how much do stealerships mark up new cars by?
 

wraithyjeep wrote:

> usually mark up is 10% so say a 20K$ sx 2.0 they will make 2000$ the
> dealer gets 1800 and the sales guy gets what's left.

Huh?

In most dealerships that go off of a commission based selling model, if the
car has say 10% markup, which is over invoice, and if they could sell it
for full sticker (say it's a new Mustang GT convertible), then here's how
it gets broken down.

First, the owner puts a "pack" on the car. This can vary. Usually, there's a
common amount on all cars, but very well selling cars get a higher pack.
This is what the owner skims off the top before he pays any commissions.
So, the commission is based on a number something less than what the car
sold for over invoice. Now, slow selling cars often have small and
sometimes no pack at all, but it doesn't matter because those cars almost
always sell for invoice, negating a pack anyway. Often with a hot selling
car, the pack is very steep. I knew someone that worked at a
Chrysler/Plymouth dealership when the Prowlers were new, and there was a
$4000 pack on it (it sold for something like $4000 over sticker). Some
dealerships put a pack on based on a percentage...something like 4% of the
purchase price. Some dealerships have a set pack. The dealership I used to
sell for had a $700 set pack. Then, there is usually a fee taken out for
dealer prep. They used to add this into the car's price years ago, but now
it gets taken off the margin made on the car. Usually, this is something
like $150. Now, it doesn't cost them $150 to prep the car, even if the
thing sat on the lot for 6 months getting washed quite a few times. Then,
what's left, the salesman gets a commission off of. This varies based on a
number of variables. Usually, more expensive cars that command a higher
profit get smaller commissions. I had a friend that sold BMW's and his rate
was 18% and it was a static rate, meaning the rate didn't increase after a
sales goal has been achieved. That brings me to the second variable:
graduated commission rates. Many dealerships have graduated commissions,
meaning that after a predetermined sales goal, the salesman gets a higher
commission. Some dealerships have retroactive rates, where after meeting
that goal, all of his cars sold are based on the higher rate. Some,
however, do not.

Now, let's base this scenario on what my particular dealership did. Using
your $2000 markup on a $20,000 car, the dealership took a $700 pack and
$150 prep fee off the top. That leaves us with $1150 over invoice. The
salesman, at the base rate, made 25% of that figure, which would be $288.
After selling 8 vehicles (at my old dealership), he goes to 30% commission,
and his commission would have been $345. At the top commission level, 35%,
he would have made $403. Now, this is all assuming that they had a home run
hit on the car, which is very, very unlikely.

An average month for me, during better times would have been about 12
vehicles sold with about 8 of them sold at or around invoice, giving me a
minimum commission, which was $100, and I likely had 2 cars that paid a
little better and 2 cars that paid very well - which would have been a Ram
Air Trans Am (rare back then) and/or a used car. The biggest commission I
had ever gotten was about $750 for a 1997 Ram Air Trans Am sold new. That
was a rarity!

If any of you think new car salesmen are making a good living, you're highly
mistaken. Theres a reason that from year to year almost the entire sales
staff has turned over. They usually don't make squat in the larger picture.
Sure, the months of March through June are usually pretty good, but
September through February are usually pretty rough. Most salesmen that I
ever worked with made an average income at best. There's always that one
guy, though, in each dealership that makes good money. But, he sees a lot
of customers, and works lots of hours to move that many cars. He's been
doing it a long time and has slowly built himself up to that point. This
isn't the average sales guy, though.

--



Registered Linux user #378193

Re: how much do stealerships mark up new cars by?
 

you really are pathetic


"Cherokee-Ltd" <nospam@home.com> wrote in message
news:SZSdnZHVgMvlXRjfRVn-tw@rogers.com...
> And you wonder why used car salesman are amongst the least trusted of all
> professions? I hope you are more honest with your customers than you are
> with your peers.
> -Brian
>
>
> "IsellJeeps" <jsprauer2000@yahoo.com> wrote in message
>
> > call a Jeep dealer near you and ask for the new car manager..
> > tell him you are from abc motors and are trying to trade for an 05
unlmtd
> > rubi with 2500 miles.(people dont like it anymore) ask what invoice is
> > with
> > all options and ask if there are any rebates?? he will think you are a
> > dealer...then ask "are you a buyer if I trade for it" & what price... he
> > will spill his guts on invoice rebates and all so you will have a good
> > idea
> > what to pay for a new one!!!! should I write a book or what!!!!
> >
> >
> > --
> > Jarod Sprauer
> >
> > Talk is JEEP at
> > www.sprauermotorsports.com
> > 281-807-JEEP (5337)
>
>

Re: how much do stealerships mark up new cars by?
 

you really are pathetic


"Cherokee-Ltd" <nospam@home.com> wrote in message
news:SZSdnZHVgMvlXRjfRVn-tw@rogers.com...
> And you wonder why used car salesman are amongst the least trusted of all
> professions? I hope you are more honest with your customers than you are
> with your peers.
> -Brian
>
>
> "IsellJeeps" <jsprauer2000@yahoo.com> wrote in message
>
> > call a Jeep dealer near you and ask for the new car manager..
> > tell him you are from abc motors and are trying to trade for an 05
unlmtd
> > rubi with 2500 miles.(people dont like it anymore) ask what invoice is
> > with
> > all options and ask if there are any rebates?? he will think you are a
> > dealer...then ask "are you a buyer if I trade for it" & what price... he
> > will spill his guts on invoice rebates and all so you will have a good
> > idea
> > what to pay for a new one!!!! should I write a book or what!!!!
> >
> >
> > --
> > Jarod Sprauer
> >
> > Talk is JEEP at
> > www.sprauermotorsports.com
> > 281-807-JEEP (5337)
>
>

Re: how much do stealerships mark up new cars by?
 

you really are pathetic


"Cherokee-Ltd" <nospam@home.com> wrote in message
news:SZSdnZHVgMvlXRjfRVn-tw@rogers.com...
> And you wonder why used car salesman are amongst the least trusted of all
> professions? I hope you are more honest with your customers than you are
> with your peers.
> -Brian
>
>
> "IsellJeeps" <jsprauer2000@yahoo.com> wrote in message
>
> > call a Jeep dealer near you and ask for the new car manager..
> > tell him you are from abc motors and are trying to trade for an 05
unlmtd
> > rubi with 2500 miles.(people dont like it anymore) ask what invoice is
> > with
> > all options and ask if there are any rebates?? he will think you are a
> > dealer...then ask "are you a buyer if I trade for it" & what price... he
> > will spill his guts on invoice rebates and all so you will have a good
> > idea
> > what to pay for a new one!!!! should I write a book or what!!!!
> >
> >
> > --
> > Jarod Sprauer
> >
> > Talk is JEEP at
> > www.sprauermotorsports.com
> > 281-807-JEEP (5337)
>
>