All over Texas, the dealer pays a dealer’s hourly wage to the customer and then gets a commission for handling those sales. This is why many people call a “dealer”.
There are a few different ways to put a price on the total time spent by a person buying cars. I like to use a sales-per-minute model which takes the time spent by an individual, the number of transactions, and then adds those sales-per-minute prices to get the total time. For example, an individual could purchase four cars in two hours, but the overall time and sales rate could be four cars per minute of time (four x $100,000 in sales per minute $8,000 or 8,000 x 9 hours in total revenue.
Here are some examples for different car models. First we’ll start out by using the average customer’s time spent per car. Then we’ll use the total car sales per hour to figure out what kind of an hourly sales rate dealers will get for a particular car.
First, let’s look at a typical customer’s time to buy a car by making two assumptions: the customer only buys one car per hour but purchases several cars or multiple cars in a relatively short span such as two hours. When looking at the car sale rates and time-on-site sales from an hourly model, we can see four things.
1. The average dealer takes 7 minutes to complete a car sale. That means the average dealer sells 12 cars per hour.
2. The average customer buys two cars each hour.
3. The average customer completes four car sales per hour.
4. The average customer buys a maximum of $6,850 worth of cars per month. This means the average customer bought 11 cars per month and paid $2,450 each month in sales taxes, license and registration fees, title insurance and deposit fees and fees. This means the average customer used 3.3 million hours each month.
Since we’re using the average hourly rate, we can divide the total sales revenue by this number to get the car sale price. Here the sales price per minute is $100,000 = $.0024. If a consumer buys a $50,000 car in five minutes, then it will be a sales price equivalent to 2.00 times sales per minute. So the wholesale price for a $50,000 car is $14,500.
So if a buyer is
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