Find a new set of tires that are right for your Ford vehicle. Base Salary. By beating the book time associated with every vehicle that comes through the service lane. Find available accessories designed and engineered specifically for your Ford vehicle. Prepare and administrator annual forecast and budget for new vehicle department. A passion for cars is great, but it's more important to understand what makes a great deal, whether that involves new vehicle sales or trade-ins. Several people are curious to know how much money auto dealerships in the USA earn and how they may generate money. First of all, the advisor will ask how many miles are on the car. How much commission does a car salesman make per vehicle? In fact, some auto dealers choose to work exclusively with manufacturers that offer holdback. Fortunately, many manufacturers offer holdback. In research, its explored that car dealers spend 10x less on digital marketing compared to traditional marketing. Dealerships are required to provide a guaranteetypically equal to minimum wageif a salesman doesnt make enough commission to exceed that amount. Base Salary. Luxury cars have more gross profit potential but there are fewer opportunities to sell a car. The average retail net profit in 2016 from selling a used car was $65. Because new vehicles must be sold through a franchised dealership, the costs associated with new car dealerships are higher than those for used car dealerships. Save your money. Bachelor's Degree, 5 + years experience This can lead to higher earnings and more responsibilities, such as managing multiple locations. As per the survey, the average fixed dealer margin on Ex-showroom prices for major American automakers is less than 5%, ranging from 2.9% to 7.49% across all categories. The dealer sets a spiff for certain modelscars that have been on the lot for too long or overstock on a certain model, for exampleto encourage salespeople to get them sold first. Best Ford Lease Deals: 2023 Ford Bronco Sport: $404 per month; 2023 Ford Edge: $502 per month; 2023 Ford Expedition: $751 per month; . That depends on the commission structure at the dealership, and its usually calculated based on volume ranging from 20% to 40% of gross profit. The truth, however, is that most dealers just want to satisfy their customers rather than gouge them. Dont miss out on the opportunity to close more deals and enhance your customers experience! No doubt, owning a used car dealership is profitable. According to industry estimates, approximately seven percent of a new cars market share is earned by car dealers. In fact, its an increasingly common way to pay sales staff, although its not the standard yet. 947 views, 38 likes, 10 loves, 51 comments, 36 shares, Facebook Watch Videos from Akoma 87.9 FM: LIVE #AkomaSports with Abusuapanin Samuel Acheampong >>> 17th April, 2023 Is it profitable to sell cars? Don't forget to subtract the $1,000 rebate. For example, in Texas the fees range from $300 to $750. But if you hire an expert to manage your digital marketing, they will do everything on their own. Before you can apply for financing and get your dealership off the ground, you need a formal business plan. An average salaried salesperson may earn around $3,000 per montha far cry from the potential earnings on car salesman commission rates. Average Ford Dealership hourly pay ranges from approximately $9.27 per hour for Automotive Detailer to $29.59 per hour for Auto Body Technician. Source: Haig Partners via The Detroit Bureau, Some stock vehicle imagery licensed from EVOX images, Study Shows Which Vehicles Have Highest Dealer Markups In Each State, Nissan Lets Dealers Charge, Finance Up To $2,500 On Some Lease Buyouts, 2025 Volkswagen ID.7 Debuts With Up To 382-Mile Range In WLTP Test, 2024 Mercedes-Maybach EQS SUV Revealed In All Its Two-Tone Glory, 2023 Lincoln Corsair First Drive Review: All Good Things Come With A Price, VW ID. Words such as friendly, helpful, and knowledgeable emerge often in positive dealership reviews. When someone is buying a car, if you are good at dealing, you can sell a lot of stuff along with the vehicle. For salespeople on salary only, theres security in knowing exactly how much youll collect on your paycheck every two weeks, and it takes the pressure off making the next sale to put bread on your table. According to NADA, some of the automakers have responded favorably and proactively. If you dont buy a car, and instead you lease it, dealers have a way to make some profit there too. i know a guy who owns a ford dealership and he said he has about 10mil not including the cars 09-23-2012, . At Bumper, we are on a mission to bring vehicle history reports and ownership up to speed with modern times. Used car dealerships are run on a smaller scale and often work well as a small business, because they require less capital and lower operating costs. Tennessee - $500. Vehicle ZipRecruiter ATS Jobs for ZipSearch/ZipAlerts - 19 days ago, Swickard Auto Group - Wilsonville So, how much commission does a car salesman get when they sell more expensive cars but fewer of them? Approximately $2,337 per used car is the average gross profit reported by the National Automobile Dealers Association . The ability of a dealership to make money . Disclaimer: The above is solely intended for informational purposes and in no way constitutes legal advice or specific recommendations. Up to now weve covered the traditional ways car dealers make money. Will you make more money if your vehicles sell for higher money? Salary information comes from 10,848 data points . The average Ford Dealership salary ranges from approximately $65,000 per year for Shop Technician to $108,991 per year for Parts Manager. On the other hand, if you dont give time and are not good at marketing, you might not even make $1000. In fact, businesses usually spend up to $1500 per car sold unless they fully utilizecost-effective marketing strategies (discussed at the end). There are a few nontraditional ways dealers , can make money. 3.41%. That means if you could get financed a car, you are making from the retail price and getting a flat amount or commission from the bank. After school, Jason entered the workforce at a car dealership and worked his way through several positions in both sales and service. A salesperson who drives a demonstrator, or demo, may not pay for it out of pocket but its usually accounted for as taxable income on their check. Here's how it works: $28,000 (New Car Price) - $10,000 (Trade-in Amount) = $18,000 (Taxable Trade Difference / Pay Tax on This Amount) Your trade difference of $18,000 is the amount you will pay taxes on. Once youve signed on to be a Ford dealer, youll be part of the overall Ford culture. From there they can use the three delivery methods to distribute the cars to the different dealers. The reason is that you can not sell for more than the retail price. EV Owners: Beyond 35 miles, your vehicle will be taken to the closest public charger or EV Certified Ford Dealer. According to data from J.D. For instance, the franchise fee can range from $30,000 for Ford to $500,000 for Hyundai and Toyota. How much does a car salesman make? Typically, it averages out to very much the same. ** We are fueled by our goalthe car buying experience and delivering personalized service to our guests. Commissions on new car sales vary from one dealership to another, but the usual range is from a 20-to-30 percent of the profit. Commission may have to be returned if a customer returns a vehicle in some cases. Auto dealerships can only exist if they are lucrative and self-evident. You may wonder how much money you have leftover if your dealership generates around $2k in gross profit each transaction. The company has over 19,000 dealers throughout the world. Used car dealers carry cars from many different manufacturers, while new car dealerships are generally franchises associated with only one manufacturer. Thats why if you want to start this business, you should learn the key areas where car dealers make the most. Even though luxury automobile dealers often earn more money for each car sold, their total sales volume is usually less. Over the course of a year, a demonstrator ends up being around $4,000 to $6,000 in taxable benefit. Employee Flight Risk, As a car dealer, you can earn a decent wage after getting your business up and running. Now, as a full-time writer, he writes engaging content in all different aspects of the automotive industry. . If you arent aggressive, other sales staff could try to scoop your customers. I'll add to Rick's answer by saying that shipping cost is added to the cost that dealers pay the manufacturer (Ford does it the same as all other manufacturers). Just in case you need a simple salary calculator, that works out to be approximately $29.82 an hour. Immediately the car is sold and the employees are paid, the owner can take a portion of the profit as salary. Note that a dealership owners salary is based on the profit earned by the sales staff. Ford dealers will likely switch over to the automaker's new business model by 2023 and will need to specialize in ICE, EVs, or Ford Pro commercial vehicles. Some fees, like registration and sales tax, are mandatory directly to the government. According to CareerExplorer, entry-level car salesmen can expect to earn around $28,000 per year. How much money you will earn at your car dealership is entirely up to you. Now you add the $995 destination charge (which is a legitimate charge) and you get $20,761. But many car dealership owners have told that the profit ranges between $1000 to $1500 a car. But many car dealership owners have told that the profit ranges between $1000 to $1500 a car. There are actually several ways for salespeople to get paid for selling cars. That's a whopping 180 percent increase from pre-pandemic levels in 2019, and with supply chain problems still a major issue due to COVID-19 and the chip shortage, the trend is expected to continue through this year at the very least. Georgia - $545. The amount you pay a manufacturer for a vehicle will ideally be less than what you sell it for. We fix up those that need it, then put them out on the lot for sale. How much do dealership owners make a year? While the U.S. Bureau of Labor Statistics does not keep data specifically for auto dealers, it projects that the number of jobs in the retail sales industry, including automotive sales, will grow by 7 percent through 2030. Pre-pandemic, wed buy around 15 cars per week to sell on our lot now were purchasing about three. For 15 cars and over, the car salesman commission rate is 40% per car. This difference also becomes a great addition to their profits. In the same vein, one might wonder how much profit do used car dealers make. Car dealers get 5% to 10% profit on each new car sold. For example: Taking into consideration an average car deal with $1,200 gross profit, selling seven cars per month would earn the salesperson just $2,100 for the month. the number of years you have spent in your profession. Salary ranges can vary widely depending on many important factors, including education, certifications, additional skills, the number of years you have spent in your profession. Independent business owners must also plan for all their startup expenses. For a Service department, it doesnt matter if a vehicle is under warranty or not , what is most important is that their mechanics can beat the book times stipulated for each job. Have it in mind that a successful business will bring a higher profit, and thus a higher salary. Now, the main point to remember is that . May 4, 2022 at 10:33 AM . That means that some RAV4 crossovers now cost over $60K. You should also look into the area in which you want to open a dealership. An entry-level, beginner commission-based salesperson will earn around $2,000 per month while an exceptional salesman can earn more than $10,000 per month on commission. A car sales agent's salary can vary from one dealership to the other. For new cars, it includes freight and pre-delivery inspection (PDI) and for used cars it includes reconditioning and detailing expenses. Former Manager Explains How Dealers Get Compensated. The average gross profit per new vehicle sits at $6,244. Hence, the typical salary range for car dealership owners is quite broad, with some making just $18,902 a year and others making $495,413 in August 2022, according to Comparably. Individualize employee pay based on unique job requirements and personal qualifications. Contact Fords corporate office to request this information before you proceed. During that time they will use Ford resources and Ford . Car dealership owners make the most in San Francisco at $147,548, which is 51 percent higher than the national average. A salespersons total compensation comes from multiple income streams, including: For a typical salesperson that sells between 10 and 15 cars per month, commission is by far the largest component to their paycheck. At Les Stanford Chevrolet Cadillac in Dearborn, Michigan, Ali Reda earned the record for most cars sold in a year at an astounding 1,582 cars. Definitely not! Dealers can make 10-15% profit margins when selling used cars, which is very strong. Apparently, this might sound costly but you will get more ROI on your digital marketing spending. While ZipRecruiter is seeing annual . How much does Ford Dealership in the United States pay? Form your Car Dealership into a Legal Entity. As a result, you have come to the perfect spot since we have discussed the Car Dealership Margins in this post. how much does a ford car dealership owner make. The Average Salary of an Owner of an Automotive Garage. Replace accessory drive belts, orange coolant, engine air filter, and manual transmission fluids. *Visit FordPassRewards.com for important program details and terms and conditions. Almost every step toward becoming a car dealer will cost you money. That was more than double the $1.3 million in net pretax profit reported for the first nine months of 2020. Spiffs might be $50 up to $500, and its in addition to the commission on the unit. In my 42 years in the car business, Ive seen dealers of all sizes make money from paying themselves rent. Salaries at Ford Motor Company range from an average of $68,228 to $131,831 a year. How do dealers make money in the Service department then? But if you hire an expert to manage your digital marketing, they will do everything on their own. Lets dig deep to focus on all the areas that generate most of the money in the car dealership business. Everyone is well aware of widespread dealership markups, but with fewer vehicles to sell, are these companies facing the same financial concerns as automakers? Computers can determine how much each used automobile will sell at the dealership. Pass an inspection of your place of business by an approved inspector. Car dealers get 5% to 10% profit on each new car sold. The automotive industry is highly competitive, and car salesmen must continually strive to attract new customers while maintaining their existing customer base. Just filling out the necessary sections of a business plan forces you to find ways to avoid potential problems and build a better dealership. Establish a Workplace. Theres serious money to be made in the car industry, with many dealership owners earning salaries in the six-figure range. According to the National Automobile Dealers Association (NADA), the typical gross profit on a used car is $2,337. $4k - $72k. The other expenses are still out there rents, wages, and many other running business costs. WA. The Service department is where car dealerships make most all of their money. Car dealers have great opportunities to make from their business. 20 lakhs, the dealer margin ranges from 2.45 to 4.99 per cent. Once we identify and purchase the vehicles were interested in and those that fit the criteria of what we sell at the dealership family cars, SUVs, sedans, and trucks we bring them back to our in-house shop to do a safety check. Search thousands of open positions to find your next opportunity. A vehicle is one of the most expensive purchases you'll likely make, and you deserve to have access to $1,264 to 1,580. Something went wrong, please try again later. As recently as last month, the National Automobile Dealers Association stated that it wanted the OEMs to set dealer margin on automobiles at 8% of the selling price. Use free ways to make your car dealership business . Whether you are starting your first company or you are a dedicated entrepreneur diving into a new venture, Bizfluent is here to equip you with the tactics, tools and information to establish and run your ventures. 140,000 miles. Dont Miss: What Rental Car Companies Take Debit Cards, In the United States and Canada, a franchised new-car and -truck dealership is a retailer that sells new and also possibly used cars, including certified preowned vehicles, employs trained automotive technicians, and offers financing. Customers have high standards: the words great customer experience or excellent customer service occur most often in positive dealership reviews, followed by variations of best or great buying experience. Choose a Product. A car dealership earns revenue by selling vehicles above the dealers invoice price and by doing routine maintenance on vehicles sold. Automotive Business Manager / Sales Manager, Interstate Honda of Chehalis - Whether youre a car sales veteran or looking to break into the industry, unlock your potential with a Bumper subscription. The average Car Dealership Sales Manager salary in Texas is $125,045 as of February 27, 2023, but the range typically falls between $106,290 and $146,660.Salary ranges can vary widely depending on the city and many other important factors, including education, certifications, additional skills, the number of years you have spent in . How much does a Ford car dealership owner make? Virginia - $599. Find parts designed and engineered specifically for your Ford vehicle. In other words, how much do auto dealerships profit from used cars? Customers are invited to participate in a survey administered by MaritzCX, an independent, third-party supplier. With more online, real-time compensation data than any other website, Salary.com helps you determine your exact pay target. How much does a Car Dealership Sales Manager make in the United States? CA. Best Sports Car Deals in August 2022. The Ford X plan price for a vehicle is the dealer invoice minus 0.4% dealer invoice plus an administration fee of $275. A typically used automobile dealer has profits between $500 and $3,000 per vehicle, with most cars selling between $2,500 and $5,000. If theyre found to be taking it easy or they have prolonged stretches without selling anything, management could put pressure on them to shape up or ship out. $18,902 $495,413. In truth, this profit is no longer the most significant element for most automobile dealers. On this page. To increase their earnings, car dealership owners can try to grow their business by expanding their inventory, adding new services or opening additional locations. Are reviews modified or monitored before being published? How much does a luxury vehicle salesman earn? Karoly's smooth sales approach earns him as much as $160,000 in a good year, meaning a . Glassdoor provides our best prediction for total pay in today's job market, along with other types of pay like cash bonuses, stock bonuses, profit sharing, sales commissions, and tips. You can do it by paying attention to all the areas of this business. Successful dealerships will pay close attention to this vision and get involved in making it happen in their own communities. Offering a maintenance service is another big profitable area in the car dealership business. The biggest expense is, of course, the initial inventory of vehicles, though you can start small but with just a handful of used cars and a great website. Wyoming - $500. We've identified four states where the typical salary for a Car Dealership Owner job is above the national average. Learn more about: Compensation Packages, NADA claims to have sent the message to all of the carmakers. Find the right tires for your Ford vehicle. This includes crowdsourced shuttle services, ridesharing, drones and autonomous vehicles as part of its City of Tomorrow proposal. Financing is one of the biggest revenue sectors in car dealerships. Car dealerships make vast amounts by selling accessories and warranties. The car dealership business is an eye-catching business for two reasons. However, earnings can vary greatly depending on the size, location and average gross profit of the dealership as well as the owner's experience and ability to grow the business. But marketing for car dealerships takes a lot from your balance sheet. Lets reveal the secret of making huge profits for the car dealership business. How much does a Car Dealership Owner make? The process might sound complicated. But not car dealerships charge a lot more than that. Make no mistake, when all the salespeople on the floor are vying for commission, it becomes a cutthroat environment. As mentioned earlier, its one of the most profitable sides of this business. Some make much higher than a few others. Once youre ready to get started, contact Ford and ask for an application to become a dealer. The plan should explain the dealership's structure, marketing plans, income estimates, expected expenses, and the research you find. Chehalis, WA, Sonic Automotive - As with dealer operating costs, profit depends entirely on the dealers wholesale pricing and cost for inventory, cost for bonds and insurance and other overhead. However, it takes years and years to build such a considerable customership. Not all car dealers make the same money. For 15 cars and over, the car salesman commission rate is 40% per car. Although it will require a small investment on your part, a quick review from an attorney can save you headaches down the line. Car dealers generate money in different ways, and you may expect to earn a lot if you open your dealership. threatening to harm employees or others), Lack of adequate text (e.g., symbols, emojis and random letters), Reviews on the product and not the customers Sales or Service experience. All will be my responsibility. Most conventional cars have narrow profit margins. Nadareportsthat used car dealerships make $2,337 per car, and selling a new car costs approximately $2000 per car. The average salary for a Used Car Manager is $60,789. If a certain job should take four hours, and a mechanic can get it done in two, guess what the dealer is going to charge you for? , an independent, third-party supplier industry estimates, expected expenses, thus... Salesperson may earn around $ 4,000 to $ 750 with modern times approximately $ 65,000 per year for Manager... The typical gross profit per new vehicle sits at $ 6,244 charger or ev Certified Ford,... 28,000 per year $ 29.82 an hour you sell it for year for Parts Manager opportunity to close deals... To manage your digital marketing, you should learn the key areas where car dealers generate in... Car sold your part, a demonstrator ends up being around $ 3,000 montha! Even make $ 1000 to $ 1500 a car dealership and worked his way through several positions in sales! You open your dealership off the ground, you have come to the other expenses still! Cars market share is earned by car dealers carry cars from many different manufacturers while! Ways for salespeople to get started, contact Ford and ask for an application to become a dealer,... You will get more ROI on your digital marketing spending over the course of business! Get more ROI on your part, a quick review from an average of $ 275 Ford plan! % per car that most dealers just want to open a dealership owners the! Gouge them a Ford car dealership owners have told that the profit between... The area in which you want to open a dealership and its in addition to their profits since have... Made in the United States this information before you proceed the company has over 19,000 dealers throughout the.. Part of its City of Tomorrow proposal paying attention to this vision and get involved in making it happen their... For important program details and terms and conditions forces you to find your next.! Ev owners how much does a ford car dealership owner make Beyond 35 miles, your vehicle will be taken to the other you hire an to... Invoice price and by doing routine maintenance on vehicles sold net pretax profit for... $ 68,228 to $ 500,000 for Hyundai and Toyota customer base digital marketing they! Designed and engineered specifically for your Ford vehicle since we have discussed the car salesman commission rates nine months 2020. Smooth sales approach earns him as much as $ 160,000 in a survey administered MaritzCX! Words, how much does a car often earn more money if your vehicles for. Your part, a demonstrator ends up being around $ 3,000 per montha far cry from potential... It includes reconditioning and detailing expenses pretax profit reported for the car dealership owner make double the 1.3. You lease it, dealers have a way to make from their.. $ 1000 to $ 108,991 per year for Shop Technician to $ 6,000 in benefit! Meaning a 's structure, marketing plans, income estimates, approximately seven percent of biggest. Will be taken to the government sold, their total sales volume is usually less aggressive, other staff... Mentioned earlier, its one of the profit ranges between $ 1000 to $ 750 a vehicle be. Job is above the National automobile dealers, ridesharing, drones and autonomous vehicles as part of overall...: compensation Packages, NADA claims to have sent the message to all the areas of this business, seen. At Bumper, we are on the opportunity to close more deals and your! New set of tires that are right for your Ford vehicle from selling a new cars, is! Typical salary for a car dealer, you can apply for financing and get in! Dealership reviews and build a better dealership exceed that amount should explain the dealership 's structure, marketing,! His way through several positions in both sales and service are required to provide a guaranteetypically equal to wageif! Might wonder how much does a car dealer will cost you money, supplier... Profit do used car Manager is $ 60,789 case you need a simple salary calculator, that works to. Beating the book time associated with every vehicle that comes through the service then. Profitable sides of this business much commission does a Ford dealership in the car dealership business about: compensation,. 3,000 per montha far cry from the potential earnings on car salesman commission rate is 40 % per car up. Make more money if your dealership off the ground, you should also into! Should learn the key areas where car dealers get 5 % to 10 % profit on new! If your dealership off the ground, you should learn the key where. 147,548, which is very strong all the areas that generate most of the automakers have responded favorably and.. Sales vary from one dealership to another, but the usual range is from a 20-to-30 of! Their money ready to get paid for selling cars biggest revenue sectors in car how much does a ford car dealership owner make! But marketing for car dealerships make $ 1000 to $ 1500 a car commission... Of years you have come to the government build a better dealership bring a profit... Dealership and worked his way through several positions in both sales and service may! Making it happen in their own an independent, third-party supplier cars market share earned! Are still out there rents, wages, and many other running business costs paid, franchise! To bring vehicle history reports and ownership up to speed with modern times but not dealerships. Charger or ev Certified Ford dealer, youll be part of the automakers have responded favorably and proactively the... Case you need a simple salary calculator, that works out to very much the same,., an independent, third-party supplier profitable sides of this business for all their startup expenses owning! Startup expenses, he writes engaging content in all different aspects of the money in ways. Is $ 2,337 per used car dealers get 5 % to 10 profit! Their business an attorney can save you headaches down the line dealership generates around $ 3,000 montha! Significant element for most automobile dealers element for most automobile dealers Association is usually less right for your Ford.. Miss out on the floor are vying for commission, it averages out to be if... Exact pay target determine how much does a car dealer will cost you.. Can vary from one dealership to the different dealers 2k in gross profit per new vehicle.! Get $ 20,761, engine air filter, and you get $ 20,761 responded favorably and proactively, we on! Average retail net profit in 2016 from selling a used car dealerships make all. Higher money higher than the National average make enough commission to exceed that amount that are right for your vehicle... Dealerships are required to provide a guaranteetypically equal to minimum wageif a salesman doesnt make enough commission exceed. Advisor will ask how many miles are on a used car dealers generate money salesman commission is! Get 5 % to 10 % profit on a mission to bring vehicle history reports ownership! Per new vehicle department and you may expect to earn a lot you! New vehicle sits at $ 147,548, which is 51 percent higher than the retail price ground. The secret of making huge profits for the first nine months of 2020 ask for an application to become dealer. A cutthroat environment Ford dealer earn and how they may generate money in the six-figure range responded favorably and.. You add the $ 1,000 rebate pay ranges from approximately $ 9.27 per hour auto. Your part, a demonstrator ends up being around $ 2k in gross profit per new department. Your place of business by an approved inspector to find ways to some... And its in addition to the perfect spot since we have discussed the car dealership.. Sell it for, approximately seven percent of the automakers have responded favorably and proactively to scoop your experience... More deals and enhance your customers car was $ 65 6,000 in taxable benefit s sales... Money to be returned if a customer returns a vehicle is the dealer invoice plus an administration of... To open a dealership the potential earnings on car salesman commission rate is %... Customers rather than gouge them 29.59 per hour for auto Body Technician contact Ford ask. Part, a quick review from an attorney can save you headaches down the line wed buy around cars! The message to all of the profit as salary and he said he has 10mil! Actually several ways for salespeople to get started, contact Ford and for... Making it happen in their own much the same vein, one might wonder how much profit do used dealership! Many dealership owners have told that the profit as salary engineered specifically for Ford. For more than the National average lot more than that salesperson may earn around 28,000... Necessary sections of a business plan forces you to find ways to avoid potential problems and a! Per hour for auto Body Technician secret of making huge profits for the first nine of. Contact Ford and ask for an application to become a dealer and by doing routine on. The United States demonstrator ends up being around $ 28,000 per year for Parts Manager and. One dealership to the different dealers rate is 40 % per car, and many other business. This can lead to higher earnings and more responsibilities, such as friendly, helpful and... To know how much does a Ford car dealership owners have told that profit. $ 108,991 per year for Shop Technician to $ 750 although its not the standard yet four! Content in all different aspects of the profit earned by the sales staff has about 10mil how much does a ford car dealership owner make including the 09-23-2012. Theres serious money to be approximately $ 65,000 per year for Shop Technician to $ 29.59 hour!

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