How Much Do Car Salesmen Really Make
How much does a car salesman earn from commission from selling a vehicle?: originally appeared on Quora: The best answer to any question. Ask a question, get a great answer. Learn from experts and access insider knowledge. You can follow Quora on , , and .
Answer by Jason Lancaster, Editor of AccurateAutoAdvice.com
The short answer is that most car salespeople don’t earn a whole hell of a lot of money. Dealership salespeople average about 10 car sales per month, and earn an average of about $40k per year. If you do the math, that’s about $330 per car.
However, that’s not the whole story. There’s a vast discrepancy between great salespeople and bad salespeople . A salesperson who moves 20 cars a month is probably going to earn $6-$8k, while a salesperson who can only move 8 cars a month is likely to earn minimum wage.
There’s also the fact that the $330 per car average includes both new and used vehicle sales. New vehicle sales rarely pay $300+ commissions, while used cars can sometimes pay $1,000 commissions.
To sum up, I’d guess the average is close to $250 a car.
If you want to learn more, here’s how commission structures are setup at your average volume brand dealership:*
1. Almost all dealerships set a minimum commission amount, which is the least amount of money you can earn when selling a car. It can range from $75 to $200, depending on the dealership.
Example: You sell a used car for $3000 over cost. The commission rate is 25% after pack, and pack is $800.
How Much Does The Average Salesperson Make
The average salesperson? That depends on which average salesperson. If you mean the average Audi salesperson in California, then I would say about $75k per year. The highest paid salesperson that Ive met makes about $450k per year.
Average car salesperson in the United States makes around $40k-$60k per year, according to a quick google search. If you read up on the car salespeople forums, such as reddit.com/askcarsales, you will find plenty of people who make six figures all across the country.
What Is A Car Sales Draw Or Draw Check
A draw check is normally minimum wage at a 40-hour workweek no matter how long or hard a salesman worked for the week. To entice a car salesman to apply with a dealership they may up the draw to $2,000 or more.
Previous sales commission a car salesman earns from the month before are normally paid around the 15th of the month. The total commission, bonuses and spiff money is calculated and then the draw amount is deducted from that amount. Taxes and any deductions are then deducted from the balance.
If a car salesman earns a total of $2,800 for the month and the draw was $1,500. The salesmans settle up commission check, before taxes, would be $1,300.
If the car salesman earns under the draw amount in total commissions, they will not receive a commission check. This will put a car salesman in the hole or in the bucket with the dealership.
Lets say the salesman only made $1,200 in total sales and commission he would start the next sales month in the hole with a $300 draw on the books. This salesman will have to make a minimum of $1,800 before making a commission check and getting out of the hole.
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Improve Your Sales Techniques
Developing your sales abilities is essential if you want to have a successful career selling automobiles. The use of excellent sales strategies can assist you in selling more automobiles and meeting or exceeding your monthly targets. The majority of sales strategies are based on determining what a customer need and then demonstrating how your product will answer that requirement. It is necessary in the automobile business to speak with your consumers and find out what they are searching for in a vehicle.
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The Average Salary Of A Car Salesman
Related
If you’re outgoing, relationship-oriented and possess the gift of gab, you might consider a career as a car salesperson. These individuals know a lot about the vehicles they’re selling and have the type of persuasive selling skills that can overcome resistance and turn a “maybe” into a “yes.” Most car salespeople work for a dealership, and their base salary may be fairly paltry as most of their income comes from commissions based on the dealership’s gross profit on the car. So, the more cars you sell, the more money you earn.
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Who Is The Highest Paid Salesman Top 10 Highest Paid Car Salesmen
- 8 minute read
Like every industry, the car industry is one industry that comes with its good and bad. It is an attractive industry with a lot of money but it is also competitive. You cant say exactly what the day holds at the dealership. Some days could be the best and others may be the worst. In all of these days, a car salesman is expected to be at his best whatsoever. The best and highest-paid car salesman results only if you can put in the work.
Car salesmen occupy a role in the automobile industry that is valuable and their knowledge of cars is highly appreciated by buyers. They are at the front line of the dealership. Every dealership considers the best from their salesmen when engaging buyers through their chosen car.
One thing that keeps you going in the industry is hard work. While there is a lot of money accrued for a car salesman, it is full of challenges. Here is it, closing a deal with a prospective buyer makes you a good salesman, and how you do it rightly determines if the car would leave the lot.
Every successful car salesman with a six-figure pay has qualities that separate them from the others. Rapport, trust, and likability are gems of the highest-paid car salesmen. Customers love it when you make it easy for them in their choice to buy the car they cherish to be the perfect fit for them. Show these qualities to customers on the floor of your dealership when you meet.
In this article, you will know if becoming a car salesman is for you.
How Much Money Does A Car Salesman Make Selling Cars
How much a car salesman can make depends on many factors. The #1 factor depends on each individuals attitude, determination, and ability. If a car salesman goes to work every day with the hopes of car sales falling in their lap they will ultimately fail. The salesmen that go to work and apply themselves every day will find selling cars can be a rich and enjoyable career.
Based on my experience in the car business and nationwide statistics, the following are income averages based on below, average, and top-performing car salesman.
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Top Salesperson Bonus Rates
Top salesperson bonus Some dealers, including myself, have a special bonus for the top three car sale producers every month. This is an added bonus to keep up morale and friendly competition between the salespeople.
$350 = Top salesman of the month$200 = Second place
*You must have a minimum of 12 cars sold to qualify.
Manufacturer bonuses.
What If You Dont Make Any Money In A Month
In reality, this would likely never happen. Most dealerships now will pay a minimum wage to a salesperson whose commission is less than what they would have made as an hourly employee. That said, this safety net is unlikely ever to be utilized since even in the worst months some people are buying cars.
The fear of not making any money because of a lack of a guaranteed salary is overblown, and exasperated by the culture of living paycheck to paycheck. To be successful financially, you need to get to financial safety as soon as possible. That means building up a savings account that you can tap if you do have a bad month.
Commission only car sales is an exercise in risk versus reward. Since you are willing to take the risk that you will not make any income, you can take advantage of the outsized rewards of this payment plan.
What other careers can you start that enable you to make six figures, with no college degree, your first year? Salary is safe, but it is capped. If your salary is $50k/year, then you cannot possibly make $100k in your first year. If your commission is risky, then the rewards can be huge!
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What Do You Mean Work Your Pay Plan
Working your payment plan is the beauty of a commission only job. On your first day, your management team gives you a payment plan that dictates how you can make money at the dealership.
Here is an example pay plan:
Salespeople earn $1000 guarantee per month. They also receive 35% of new car profit, 25% of used car profit, 5% of backend profit, and $100 per survey. If they sell 14 cars, they earn a $500 bonus, and if they sell 20 cars, they earn an additional $1500 bonus. All negative deals on new and used vehicles pay a $300 mini.
That is a fantastic pay plan since there are a few avenues to make money. The average salesperson looks at their pay plan once, and then forgets it, figuring that they will try and sell as many cars as possible.
The smart salesperson looks at their pay plan every month, figuring out how they can squeeze more money out of it. If front end profit is down, they will resort to trying to sell more cars on lease to maximize back end profit. They would always focus on the surveys since they can increase every cars income by $100 each! They would always try and sell volume, rather than just going for the big commission cars.
Who Wants To Be A Used
Being a used-car salesman has long been a job that came with something of a social stain. Famously, in surveys of the most and least-trusted professions, used-car salesmen – and car-sales professionals generally – have not rated well.
As recently as 2016, used-car salesmen were still right down the bottom, below even journalists, but things seem to be looking up these days.
The most recent Ipsos Global Trust in Professions survey, from 2019, was conducted in 22 countries, and car sales people didnt even make the list of least-trusted professions. Journalists were still way down the list, of course, but people who work in advertising were at the very bottom, even less trusted than pollsters – oh, the irony – politicians, government ministers and bankers.
Its a very interesting insight into the way our communitys perceptions have changed. Perhaps its the case that fewer people are encountering car dealers, as they transition to buying vehicles online, but for some reason, the dislike of them seems to be reducing.
What attracts people to the job has long been a desire to get rich, of course, perhaps twinned with a love of selling things to people.
Another site – payscale.com, which claims average car-salesman wages are as low as $47,000 – describes the job of automotive sales consultant as being responsible for “helping automobile buyers discover which vehicles best fit their needs within their price range.
You could argue that it should be better paid.
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How Much Commission Does A Car Salesman Make
There are several incentives available at bargaining dealerships that might encourage a salesperson to steer you in the wrong route. Heres how to fight back against it. A sinking feeling in your stomach should not accompany the signing of the paperwork for the purchase of a vehicle. However, there are a variety of reasons why you would consider doing so. Automobile ownership is one of the most significant financial commitments you will make in your lifetime. When purchasing a new automobile, the typical consumer takes out a loan of more than $30,000 to do so.
How Much Do Car Salespeople Make
Working as a car salesperson can be a lucrative career for target driven-professionals. Though many car salespeople make money working at an established car dealership, how much they make often depends on details like how much the car sells for and what capabilities the salesperson possesses. Learning about how much do car salespeople make can help you identify if this is the right career for you to pursue. In this article, we discuss what a car salesperson does, review how much they make, explore how they make their money, and examine how they can increase their salaries.
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How Does A Car Salesperson Earn Money
A car salesperson is likely to work with a car dealership and receive a relatively low starting salary. To compensate for this low base wage, they earn the majority of their money from sales commissions, which is when a salesperson gets paid a percentage of the total sale price. The percentage that a salesperson earns when they make a sale can vary. Car salespeople usually have a quota of cars that they need to sell each month. If they surpass this quota, then they might receive a substantial pay bonus or a permanent raise.
The skills of the salesperson can often determine how much they earn each month or year. The more cars a salesperson can sell, the more money and bonuses they can earn. A salesperson can potentially make a six-figure income if they can sell a lot of vehicles consistently. Any increase or decrease in their car sales metrics can cause their income for each year to fluctuate drastically.
How Much Do Car Salesman Make Per Car
Salesmen receive an average of $400 for every car that they sell. A car salesmans commission is calculated on the sale price of the car. The sale price is negotiated between the customer and the salesman, and based on the cars MSRP .
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Does A Car Salesman Make More Selling Luxury Cars
The other interesting kicker is that most luxury brands tend to produce slightly higher commissions. This is simply because the gross profits tend to be higher as compared to volume brands like, Chevy or Toyota and say, Honda.
I remember working in a Pontiac store in the mid 1990s, where I had two salesmen who each earned in excess of $150,000 a year , while I, as their Sales Manager, was earning considerably less! I have also worked with sales people who represented high end luxury brands like BMW and Porsche who consistently were earning $400,000 to $500,000 annually. Those salespeople would even hire their own 1099 staff to help them with all the customer follow up, and relationship building.
If your goal is to make more than six figures selling cars, then getting into a luxury store may be beneficial for you. However, the barrier to entry at a luxury store may also be higher .
Regardless, as you can see, there is a lot of money to be made in the retail automobile industry.
How Much Commission Does A Salesman Make On A Certified Pre
Salesmen commission starts at 25% in most dealerships. Certified pre-owned cars are well-maintained used cars. They are in better conditions than other used cars and have lower mileages. They are also more expensive than used cars and earn the dealership. Dealership have a profit margin of 5.7% as compared to 4.7% for non-certified cars. The more dealership gets, the more the salesman get too.
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Do You Get Incentives For Selling More Cars
From there, sellers receive additional incentives based on the number of vehicles sold. Usually this is the flat rate they earn, and in general, the more cars they sell, the higher the promotion for the device. Some employers may offer other incentives, such as insurance and financial products and warranty extensions.
How Much Commission Do Car Salesmen Make
Car salesmen commission is typically 25% on dealerships profit on the car. An average salesperson sell 10 cars per month. If you do the math, for selling a car for $28940, dealership makes about $1447, considering 5% of the MSRP and sales men make a commission of $361.75 per car. For 10 cars per month, its about $3617.50 per month.
Car salesmen earn a percentage of commission based on the amount a car sells for. The more the car sells for, the more a salesperson makes. But the real amount of money salesmen make varies widely depending on their commission structure, the type of vehicles they sell, and the type of dealership .
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