I have talked to many former car salesmen and women during my time spent in the auto industry and one of the questions I always ask is why they left the car business. There are several top answers, but the one that I have heard more than any other is they had trouble living on a car sales salary.
They were unhappy not knowing what their car sales salary might be every week. They said that some weeks they would get a nice check and the next week they wouldn’t bring home much at all. They assured me that they were very good at selling cars, but they wanted a job where they knew exactly how much they were getting paid each week so they could budget their money.
A Car Sales Salary and Car Sales Success
The funny thing about those former car sales people is that the income that they showed on their credit application to buy a car was not more than or even close to that of a good car salesman. In fact it was closer to that of a mediocre car salesman. I never mentioned that to them because I didn’t want to blow a sale which I surely would have done if I gotten into that conversation. However I did wonder what kind of auto sales salary they were making when they sold cars if they took a job doing something that paid them half that of a successful car salesman.
Anyway to get back to the point, first off if you are earning a car sales salary you better quit because you being taken advantage of by the car dealership where you are working. If they are paying you a salary for selling cars you are missing out on the real money. Secondly, the true car sales professional is paid a car salesman commission which is based on their sales and profitability. (Details of a Car Salesman Commission are Here)
Now to move on to living on a car sales salary or a car salesman commission it can be a challenge if you are not selling enough cars and making enough money. It’s hard to keep your head in the game when you have money problems (like not having enough). My first few months of selling cars on 100% commission versus a fixed income job took some real getting used to, but I could see the light at the end of the tunnel.
Getting Used to a Car Sales Salary and Compensation
Once I started catching on and selling more cars, my weekly checks started growing and not to mention the month end bonuses. I tried to maintain my thrifty ways and keep from spending those bigger and bigger commission checks. In fact I would hold some of my checks to even out those weeks that were less than I hoped. I would only cash my checks when I needed to and at one point the person that did payroll asked me to ash my checks. That was when I decided I was getting used to living on a car salesman compensation and commission and not a car sales salary or any other kind of salary.
I will admit that is really a challenge trying to get used to living on a car salesman salary, but it is only because it is such a big change to most people. Most people were raised knowing how much they were bringing home every month or week and so it is really hard to get comfortable working on commission.
Whatever it takes make the effort to adjust to the change because otherwise you could be missing out making a six figure car salesman income. I can tell you first hand that is much easier to get used to the uneven paychecks when you are earning 100K a year. So don’t be like one of those former auto sales people above that accept a job that earns them half of what a successful car salesman makes. Get your head in the game and sell some cars and before you know it you will be thinking like a veteran and would never ever consider selling cars for a car sales salary. Get paid what your are worth rather than leave to accept a job that pays the same whether you work hard or hardly work. You can be a better car salesman.
I assume you are selling cars for a living because you want the opportunity to make some real money. Don’t let the method of car salesman compensation and getting used to how car salesman are paid get in the way of your success. Many others have done it and you can too, earn a six figure income selling cars.
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Best brand
What is the best brand to currently sell?
Ford, Honda, Chevy or Audi, Mini, Porsche?
Where can you make the best “start”?
Hi Paul,
Your best bet is a line with lots of traffic like Ford, Chevy, Honda, Toyota
Great advice,,,, just because you make it doesn’t mean it has to ALL be spent
I’m looking to get into auto sales. I’m a proven sales professional but from a different industry….garment/apparel mfg. and textile sales has been my calling for the last 20 yrs and now I want a change.
I’m a very attractive female w/ a great personality and people (especially men ) are quickly and easily drawn to me.
I’ll have my first interview tomorrow…any advice ??
Hi Sheila,
I think you already know how to sell yourself, so be yourself and Good Luck.
If you want to sell cars, choose the dealership with the most used cars. New cars are a pain in the ass and you pretty much NEVER make any money on a new car. You can spend three days trying to sell a new car to one customer, then the customer finally says yes. Then you spend three hours showing them the stupid buttons that they will forget about in 10 minutes! Orrrrrr you switch them to a used car, spend 3 hours total and make $1500.00! That’s how you sell cars! I started selling when I was 23 and now I’m 35. Hope that helps yall!
Thanks Sean
There is always good money in selling used cars!
Could someone please explain to me how the pay works?? What kind of base salary to expect? How the commission works? See all of these ads for used cars sale but never list pay or details.
Every dealer is a little different. Read the page on Car salesman Commission and then you need to talk to the individual dealership.
I’m 21 years old and have been working with KIA for the past 3 years and let me tell you there is money to be made. JJ the commission at least where i work is a percentage off the profit you make… I can only speak for the KIA that i work for but from what i hear most KIA dealers are similar and there one of the fastest growing company’s just past Toyota
cars sold per month:
1-9 20%
10-14 25%
15-21 30%
22- ++ 35%
BECAUSE THERE’S LITTLE MARK UP ON THESE KIA’S WE TELL CUSTOMER’S WHEN WE GET THE PENCIL FROM OUR BOSS THERE IS WHATS CALLED MARKET VALUE(THATS WHERE THE PERCENTAGE COMES FROM)
lets say the window sticker of a car is $22000 when i go to my boss and get the pencil it would say $24449 and a lot of other numbers that confuse the customer if you sell the car for that price he gives you that $2449 in profit you would get the percentage of that depending on how many cars you sold that month if that’s your 22nd car it would be 35% of $2449 $857.15 word of advice JJ stick with new car dealers because there’s a lot better pay structure plus most new dealers sell used car’s too. good luck hope this helps a little.
What about winter time? We have bad winters in Iowa, how well would that go over for sales?
Hi Tim,
The winter isn’t too bad. I am in Chicago and it is about the same as Iowa.
Question, I am in Canada and my 1st month selling 100% commision i bombed and only sold 2 units. Is the dealership required to pay me min wage? I have been told by another salesmen that they do but I want to be sure before going in and asking for it…thanks
Not usually, but I am not up on Canada labor laws.
For all you Potential car sales professional ( and sometimes I use that word loosely). I have been in the business for about 7 yrs total. However I do work for one of the Big 3 Car Companies. If you DO NOT put in the effort ( tenacity,high speed, motivation, etc..) you can expect a pay grade of about 25-38k per yr ( might as well work at a 9-5 retail clothing store for $10/hr.). I find the younger the sales professional ( late 20′s – 30′s) tend to do better in sales ( This being a new era, times & technology have changed). If your older ( 50′s+) DO NOT EXPECT TO MAKE A LIVING!!!! <——re-read ! Older sales professionals tend NOT to be as savy/high speed as the younger sales professionals. I am early 30's starting at a new dealership 1st yr (6 yrs prior exp), have beatin out the top salesman( who has 20+yrs exp, @ SAME DEALER! ) 5 TIMES IN MY 1ST YEAR!! My yearly salary is about $80k for this year of ( 2011). Next year (2012) should produce around 100k and the 3rd yr ( which is THEE MOST IMPORTANT) is going to be around 120k. However I put in crazy hours (65-75+hrs/week). THIS IS A POSITION SOLELY WHAT YOU PUT IN, YOU GET OUT!!!!! Cant put in those hours???? THEN MOVE ON TO ANOTHER JOB !!!! The 3rd's ( which is every 3rd yr since you started – i.e. 2000 ( start date), 2003, 2006, 2009, 2011 etc..) are your most promising yr(s). The reason why is because most ppl get a new car then, or lease is coming due. So they compound to the "fresh customers" your selling to as well. DO NOT expect to get rich fast as a greenhorn. Just because you have 15-25yrs exp. DOES NOT mean you are good, or that some rookie greenhorn wont take your top spot as saleman of the month/yr. Clientele does move, die off, found someone better(normally the case!) or cant drive, credit issues etc…
WINTER MONTHS ARE THE “BEST” and I REPEAT ( THEE BEST!) months that a dealership/sales professional can achieve ! The weather/winter is a misconception.
This article is very misleading. Most salespeople do not earn over six figure incomes unless they are in management. Good salespeople earn anywhere from $60k-$80k at a high volume dealership in today’s economy. I was a salesman for over 7 years and made a good living but there was no job security and the future was ONE BIG QUESTION MARK. I almost passed on the opportunity to take a law enforcement job because I loved sales so much..BOY am I glad I took the government job. I make well over six figures now with my base salary alone. I also have full benefits, a 401k and a pension plan that will pay me 90% of my highest salary when I retire at age 50. There is also plenty of overtime to make tons of extra money when I WANT to, not when I NEED to meet the Man’s sales quotas. There’s no car sales job that can even touch that unless you are the GM or the Owner of the dealership. This article doesn’t mention the fact that a large number of salespeople are ex-felons and drug users or recovering drug/alcohol addicts.
Hi Manny,
Sounds like you couldn’t make in the car business. Sorry it took you 7 years to figure that out. Glad you are happy and were lucky enough to land a Government job where people get paid not matter what they do or don’t do. However most people aren’t that lucky.
I have been earning six years a year since I began selling cars and know many people that do the same.
Thanks any way for you input.
KB
Thanks DD
You are correct, the winter months can be great.
Ive been selling cars for about 8 years now strictly with honda. I agree and disagree with some stuff on here. For starters used cars is where the money is at no matter what; internet discloses invoice on most brands and of course all customers want to pay invoice or close to it for most cars which means little commissions. Used cars are bought wholesale and sold at market value which can equal thousands of dollars in profits compared to hundreds on a new car. The age of the salesperson doesnt make a difference; I’m 35 and one of the youngest people here and I usually make between 70k on a bad year to about 105k on a good year while having perks like a company car, 3 weeks vacation a year and some health benefits. The older guys that have been here for about 20 years make about 120k a year and theres one guy here that is about 47 whom has one hondas top 10 salesman awards about 5 times and he makes about 200k as a Salesperson. He sells about 350-400 cars a year out of small dealership in the suburbs. I wish I had his skills but I sell between 180-220 units a year and still make a good living. Its all about the pay plan and staff. A lot of owners and management treat you like trash so make sure you like where you work if not youre not going to be happy regardless what the pay is. Good luck and happy selling
Thanks for your input HRosario
KB
After 20 years in the transport industry from employee to owner over the last 10 years I have moved to the USA from Canada. I was considering what I wanted to do and fortunately not the only one in my family who is the ” bread winner ”
I have considered lots of things that I would enjoy doing and working in automotive sales is one of them.
Could someone advise me what the hours are like? Are they mandated?
If I was to work at a Kia dealership, for example is there a base of any kind or is it simply commission sales?
I appreciate any and all feedback
Hi John,
The only thing that I can tell you for sure is that the hours and the pay plans are different at every dealership. You will have to talk to each dealership separately to know what is expected of you.
KB
I am starting as a sales rep at a Paramount KIA in a few weeks, and this article helped me quite a bit as far as understanding how things work. This will be my first sales job where I earn commission on top of base pay, and needless to say I was a bit worried and confused. Thanks for writing this.
I work at a Mazda Dealership and we only get 10% of the profit no matter how many cars we sell. And sometimes its even less than 10%. for example if we sell a used car that profits 3,100 we make 300 dollars. if we sell a used car that profit 3,900 we make 300 dollars. you dont go up to 400 until the profit hits 4,000. I am using it as a learning experience, getting my 6 months in and going somewhere that pays at least 20%. I have been here 2 months and sold 27 cars. I think thats pretty good for Jan/Feb which are slow months.
Hi B,
It sounds like you know what you need to do.
Yes, 27 cars in 2 months is good for January and February.
KB
I’ve been in the business for about 15 months – my background is real estate – make no doubt this is a difficult business. I made 53K last year but it sure didn;t seem like it. I work at a dealership where the “flat” is $225 if I sell over 8 cars – but I work at a smaller dealership that puts out less than 100 total cars with 12 reps. No benefits except $500 a week for 2 weeks vacation. This is a difficult job and you’re working for minimum wage. This real question is can you move up in the dealership such as management or my dream, finance. The dealership I’m in has no potential of either so I’m stuck until I can find another job, which may require relocation, or real estate picks back up.
Hi KBS,
There is always room for advancement when you are a consistent top producer. Sometimes you need to change dealerships to get the opportunity you desire.
KB