Car Salesman Salary
With Little Effort!
Or is it just the opposite...?
Car salesman salary will vary from person to person based on each ones abilities and willingness. That's the boring answer anyway... We'll get to what you came here for, the real dollars and cents, in just a second.
I'll show you average incomes for all sales abilities first and below that I'll explain how some car dealerships offer guaranteed salaries, how salesman are typically paid and sales managers average incomes.
Based on a car salesmans abilities,
I'd estimate the average car salesman salary to be:
- Below Average - $0 to $15,000 annually
If a car salesmans salary falls in this range, they won't be employed long. This means they are under performing and not many dealerships will keep them around.
As a salesman, you'd really have to try to fail to be in this range or be really scared to talk to customers.
- Shows Up To Work - $15,000 to $30,000 annually
If a car salesmans salary falls in this range, the salesman is probably not very good, but shows up to work, listens to their managers and follows all the steps to the sale.
- Average - $30,000 to $45,000 annually
A car salesman in this salary range will usually rely solely on lot traffic to make their money. Unless a salesman has a really lucky year, they will probably always be stuck in this range.
Half the time, I've found that car salesman limit their own income by being overly knowledgeable (usually about credit, financing, down payment,etc.) and trying to over educate a customer and or make decisions they shouldn't be making out on the lot.
If you are a car salesman or looking to become one, do yourself a favor...Dumb yourself down! Trust me, it'll be an instant pay raise.
- Above Average - $45,000 to $80,000
Car salesman in this salary range probably have a somewhat steady stream of referral business and don't rely solely on lot traffic.
- Over Achievers - $80,000 to sky's the limit
Usually very steady stream of repeat and referral business. Typically, very organized, plans ahead, knows their inventory, good customer service and can close a deal the same day.
In my experience, the overall average car salesman salary falls in the $30,000 to $45,000 range.
There are exceptions and big ones at that! I've known really good sales people that earn over $200,000 a year.
A really good salesman working at a higher end dealership (BMW, Mercedes, Lexus, etc.) can easily make $200,000 a year.
The top earner I've ever met was making over $300,000 per year. Big money! He was an excellent salesman and new how to close a deal right then and there...
How A Car
Salesman Is Paid
Car salesman don't typically get paid a traditional salary and are usually paid on a full commission basis. That's not a hard and fast rule, I've been paid a base salary before, but that's the norm.
Some dealerships will offer a guaranteed car salesman salary to new car salesmen as an incentive to "come on board." This is becoming quite a bit more common.
This guarantee is usually between $2,000 and $2,500 a month and is typically for the first 90 days.
Typical Pay Plan
The most common pay plans that I've seen start a car salesmans average salary at 25% of the front end gross profit.
So if the dealer buys a car for $9,500 and does some repairs and a detail for $500, they'll own the car for $10,000.
Most dealers will have a pack on top of that (a non-commission profit paid directly to the dealer) which varies, but usually falls in the $500 range.
In this scenario the car salesman is starting with a base cost of $10,500. Now let's say the sale price on the vehicle is set at $15,995.
Assuming the customer pays full price, that would be a $5,495 front end gross profit, of which the car salesman salary, or commission, would be 25% or $1,373.75.
Wow! They make that much?
Not quite. Deals like that don't happen as often as some might think.
With new cars for instance, more often than not a car salesman will be paid a mini. A mini is a flat amount paid to salesmen when the commission amount is below the set "mini." Most dealers will have a mini of $100.
An example would be a car deal with a negative, or very small, front end profit. In this scenario, with no mini, the car salesman salary would be $0 or next to it.
Of course, not many people would be willing to sell cars for no money, so the dealership pays a mini to ensure the salesman earns something for their time and efforts.
Minis are most common with new cars since "skinny" deals are very common.
Keep in mind, the national average for car salesmen is roughly six to eight vehicles sold per month. Not many sales people are getting rich in this business, but can still make a comfortable living.
Bonuses and spiffs can make up a substantial portion of a car salesmans salary. Most dealerships will have some sort of incentive for car salesmen to sell a bunch of cars. This usually comes in the way of increased commission percentages for a certain amount of units sold in a month.
The most common I've seen, will up the car salesman salary percentage to 30% at ten sold units and go to 35% at thirteen to fifteen sold units for the month.
This is usually retroactive and will pay the higher percentage all the way back to deal one for the month.
In addition to a higher percentage, dealerships will usually pay extra bonuses, like the most common, a volume bonus; sell 15 cars in a month and get a $250 bonus. Even bonuses for top sales or top gross sales for the month.
There are also some quirky ones like a $50 "spiff" for getting a customer to climb into the trunk of a car and close the door to demonstrate the glow in the dark child safety trunk release. That ones always cracked me up...
[Additional Pages You Might Enjoy]
The Car Salesman Dictionary: Slang Words
Car Dealerships 11 Steps To A Sale: How To Sell Cars
Visitors Question About Becoming a Salesman: I Want to be a Car Salesman...Advice?
and The Rest Of The Crew
As for the rest of a dealers retail staff, i.e. management, their pay can vary widely depending on the car dealerships volume of vehicles sold.
- Sales and/or Desk Manager - roughly $6,000 - $12,000 a month.
- Closer - makes about the same $6,000-$12,000 a month.
- Finance Managers - roughly $5,000-$12,000 a month.
- General Sales Manager - roughly $10,000-$15,000 a month.
- General Manager - roughly $15,000-$30,000 a month.
For owners, their pay can vary even more. Smaller dealership owners can make a few thousand dollars a month, while owners of large dealerships can make up to, or more than, $1,000,000 a year in pay. Higher volume car dealer = more money, lower volume car dealer = less money.
Their pay definitely varies widely and typically depends on the size of the dealership.
Although, not always true, the same could be said for car salesman salary; the more customers they see on a daily basis the better their chances of having a higher income.
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