Here at the Car Sales Professional Blog we get lots of visitors that want to know more about Car Salesman Commission or how car salesmen get paid and how it works. Some of the visitors here are people considering a car sales career and some are Newbies or Green Peas. People that are new to selling cars for a living have many questions and concerns when it comes to car salesman compensation and pay, working on commission and not having a paycheck that is exactly the same every week. I get many emails that ask what does a car salesman get paid. Regardless of how hard they work or don’t work they feel better when they know how much their paycheck will be every Friday unlike the mythical car sales salary. That’s why so many people ask how much do car salesmen make.
Choosing a Car Salesman Commission or Not
The good car salesman that has been selling cars for any period of time couldn’t imagine a car sales salary or getting paid any other way. The car salesman commission reflects the exact amount of labor, experience and skills used throughout the week or month to sell cars and accessories (in most cases). There is no question that your paycheck can vary greatly from week to week and be influenced by the time of year, weather, manufacturers specials or a whole list of other things. But you have to ask your self would you rather make $40,000 a year and have the exact same paycheck every week or would you rather have your car sales commission check vary greatly from week to week and have a car salesman income of $100,000 a year. Sounds like an easy choice to me. I personally love getting paid on commission because I can control my annual income rather than a job classification, contract or seniority. If you get a fixed car sales salary then you are missing out on the benefits of car salesman compensation .
Car Salesman Compensation or How Do Car Salesmen Get Paid?
I will start right of by telling you that almost every auto dealership sales commissions and compensation pay plan that I know is slightly different than the next. However I will give the overall idea of how and what does a car salesmen get paid and how a sales commission and pay plan works, which in no way is a car sales salary.
To answer the common question of what percent does an auto salesman make on a car I will start off the commission of car salesmen and car saleswomen is based on a percentage of profit on the “front end” of the deal or car sold. The front end is the difference between the dealer’s invoice cost and the amount the customer paid for the car you sold. As an example: you sold the car for $20,000 and the invoice cost was $18,000. The front end profit is $2,000. How ever there is also a charge that is called “Pack” or “the Pack” that is assessed to each car for the dealership’s overhead. This is to pay for porters to clean the cars, lot maintenance, office people, paperwork, etc. This pack is different for every dealer and I have seen it go from $300 on a new car to $800 on a used car. Some high line dealerships have a “pack” charge that is $ 1400 or more. So to get back to our example the $2,000 profit from above is reduce by the “pack” charge for lets say $500 which leaves you with a commission-able profit of $1500. Now your $1500 profit is used to determine your auto dealership sales commissions and compensation.
The next step of figuring your car salesman commission or how car salesmen get paid is determined by your dealership. I have seen auto dealership sales commissions that pay anywhere from 20% up to 40% commission which is solely up to the dealership management and owners. For an example we will use 30% rate. That means that 30% of your “front end” profit or $1500 equals $450. Not bad for one sale, but what there is much more involved when it comes to car salesman compensation.
Let’s take the example of the car above where the invoice cost is $18,000 and you sold the car for $18,200. Now when you subtract the “Pack” of $500 you have a ($300) negative amount of “front end” profit. This example is known as a “Mini Deal” or “Mini” where the dealership decides to sell the car for a very low profit and there is nothing left for the car salesman commission. When this happens there car salesman get paid a “Mini” which is also different at every dealer. I have seen “Minis” pay anywhere between $100 to $200 to the salesman for selling a “Mini Deal”. If all your deals were “minis” you would have to sell quite a few cars to make any money for the month.
Bonuses, Incentives and Car Salesman Commission
To move along, another part of a car salesman commission that you can control are the sale of extras or add-ons that can earn you an incentive. Not all, but many auto dealership sales commissions plans allow the car salesmen to sell things like rustproofing, paint protection, fabric protection and undercoating. These are often sold as packages and the sales person can earn an extra $50 to $200 for selling one of these packages. The next thing that a car salesman can sell are accessories for the car they just sold. Things like remote starts, sunroofs, body molding, splash guards, trailer hitches and entertainment systems just to name a few. Some dealers add these accessories to the deal and pay car sales commission on the profit of everything and some dealers pay a fixed amount for each item sold. Either way it is a chance to make some more car salesman income.
Next on the list are car salesman bonuses which added to your car salesman commission can make a big difference to your auto salesman compensation and personal bottom line. Once again, bonuses are different at every car dealer across the country and not all dealers have all the bonuses I mention, but most have something similar. Bonuses are the extra incentive to reward the top sales people and the most successful car salesmen or women that are the top producers for the dealership that go beyond auto dealership sales commissions.
Car Salesman Commission Bonuses and How Car Salesman Get Paid
Here is a list of some of the ways car salesmen get compensated in the form of bonuses that I have seen at various car dealers that are above and beyond their regular auto dealership sales commissions.
Salesman or Saleswoman of the Month: $100 to $400 (most cars sold)
Monthly Car Count Bonus: Sell 10 or 12 cars and get a $300 bonus, 15 cars sold get $600, sell 18 cars and get $900, sell 21 cars get $1200, sell 24 cars get $1500, sell 27 cars and get $1800. Again this amount will vary and is not a program at all dealers.
Sell Certain Cars: Management may select certain cars that are aged and hard to sell, so when you sell any of those cars you a bonus of $50 to $150 extra.
Sliding Scale Car Salesman Commission Percentage: When I talked amount the commission percentage above I used 30% as an example, but some dealers use the sliding scale in order to motivate their sales people to sell more cars. An example of a sliding scale percentage pay plan is as follows. Sell 6 cars get 20% commission, sell 9 cars get 25%, sell 12 car get 30%, sell 15 cars get 35% and sell 18 or more and get 40%. You can clearly see how this sliding scale auto sales commission pay plan rewards the top sellers in a dealership.
Miscellaneous Bonuses: Car dealers can have any number of different bonuses that are used to motivate their sales people. I have seen Saturday Bonuses for most cars sold, weekend rewards for most cars sold, extra money for cars sold on a holiday…etc.
Manufacturer Incentives as Car Salesman Compensation: There are several manufacturers that offer incentives the dealership sales people that are paid directly to the sales person. Some (not all) of the car makers require a sales person to take some of their car sales training classes and become “certified” or some other term that will register them with the factory and when a new car is sold by that person the factory will pay them a bonus. I heard of one sales person at a dealership that received more than $30,000 from the factory over the course of a calender year. Now that’s real money that can help you make a six figure income.
How Much Do Car Salesmen Make?
Selling cars is about the numbers and if you are trying to figure out what kind of money you can make over the course of a month you should know that every deal is different and so is the auto salesman commission. Over the course of a month you can figure that your deals can probably be classified in thirds. One third “Minis”, one third average and one third nice front end grosses or commissions. As you can see the car salesman compensation does not stop with commission and that is why a successful car salesman can earn over a $100,000 a year which is some serious money. That should be a sufficient answer for those that wonder about how much do car salesmen make and auto dealership sales commissions.
I hope this helps you understand how do car salesmen get paid and the basic structure of a car salesman commission pay plan. I hope that helps all of you that have asked what does a car salesman get paid and what percent does an auto salesman make on a car. There are several opportunities for the car salesman to make big money and many other automobile sales careers that have big earning potential.
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Later, Fresh Up on the Lot
K.B.
Hi Bryan,
J.D.Byrider is a good company, but they are not the first thing that comes to mind when I think of selling cars. Most of their customers are “get me done’s” because they have bad credit. There is not too much selling going on there because it is about the ability to get the customer financed.
KB
i’ve been working at a subaru dealer for 3 months and sold, 5, 6, and 8.5 cars with absolutely no training, and extremely slow traffic. This month I have finally figured out how to negotiate and close my own deals, this has lead me to have 5 cars out in 7 days with a goal of a least 15 to 20 cars for the month. the previous month i could have finished with double the amount for each month but the people I turned to were not very good at closing deals.
this past week I feel very unmotivated since when i opened the envelope with my check, I found out that i was only making a few hundred dollars more than the rest (three) of the salesmen that only sold 1.5 – 2 cars (as opposed to my 8.5) and have been in the business for 20 years because they worked lots of hours and made about $1500-2000 on minimum wage. The only other person making money is another salesman who is in charge of all the internet leads, get spoons, and also can do ups. he sells about 15-25 cars depending on the month.
it is un-motivating knowing that i can make about the same amount of money just sitting at my desk all day pretending to make phone calls and making overtime on minimum wage while not selling cars, as working long hours busting my ass on every single up and getting the same amount of money.
Hi Carlos,
Maybe it is time to consider another dealership with a better pay plan for their car salesmen
KB
Thank you, this is really helpful and enlightning for some one thinking of moving into the career path of car sales.
Hey KB my name is jason and i just started working for a dealership I have been there since the 13th and am trying to find out how the commission works I have sold 2 cars so far and was told that i will only get the commission if it is higher then my pay check is that true.
Hi Jason,
This is fairly common for new people that are receiving a weekly paycheck instead of 100% commission.
However there are more details about the pay plan than need to be disclosed to you.
KB
hey kb
I have a series of questions to ask you if you don’t mind.
1. How long would the learning curve for someone who has never sold a car before be?(green pea) 2.What are some good opening lines when approaching a customer on the lot? 3. Should the invoice cost always stay a secret from the customer?
Hi Ricky,
#1. 3 to 6 months. However you will have things to learn for years, but it get much easier after 3 to 6 months depending on the person and their desire to succeed.
#2. Welome to ABC Motors, my name is ______ and you are? or I noticed you were looking at the ________, nice car isn’t it? or Great day to look at cars which one were you interested in?
Notice they are all questions so the customer is supposed to respond to you.
#3. Most customers can easily find the invoice amount on a car today so it doesn’t have to be kept a secret if they already know through their research. Although talking about invoice doesn’t help you build value and will definitely hurt your commission. Price is important to customers, but it isn’t the only factor that they use to decide to buy a car. Price is the thing buyers use as a defense mechanism to keep the salesman from getting too close.
KB
Hi KB,
I’m starting at a dealership on Monday. I’ve been working commission-based selling for almost 6 years, and have never had a problem talking and selling. The thing that has me take-aback here is they have put me on a 60 day trial period. I’ve only ever done a 14 day trial. What should be expected for the 60 days? What is the average per-week sales volume for starters so I can set a reasonable goal to keep the job after 60 days and increase my sales?
Cheers,
Hello I have one question and that is do used car salesmen make more then new cars salesmen.
The reason I ask this is because I have been selling new cars for four years and known I’m about to move on to the pre owend cars I was told I could make more money is this true?
Hi DJ,
It is often true that you can make more commission on used cars as long as the dealership has good traffic.
KB
Hi Squirrel
You will have pretty good idea if you are going to continue after 30 days without anyone telling you.
Every dealership expects a minimum number of sales per salesperson and varies widely between dealerships.
Setting a goal for units sold per month depends on may factors like location, brand, area population and experience so it would be hard to give you a number.
If you are used to commission selling you should catch on pretty quick.
Best of Luck
KB
How much (percentage), should a dealer take off on the car the dealership manager drives for a couple of months….and puts on about 750 miles?
Hi Rick,
You are talking about selling a demo. You should be able to sell a demo just as you would any other car. NEGOTIATE.
You just have to sell it to the right person and not a mooch.
KB
hey KB,
It’s me again:)
I got interviewed last week and turns out I landed the job just by being a good talker and having customer service experience. I also impressed the owner when I told him that I have my own Jump-house rental business that I run as a side gig.
Anyway, I can you give me a little insight on what I should focus on and what I should expect to be taught in the first month? Also, what is some basic knowledge I should come on board with? I’m a fast learner but it would be nice to hear some more motivational words from you, since i partly credit landing this job to you
Rick
Hey I have a question. I was just hired as a are saleswoman for a Nissan dealership and I’ve recently been told that if I don’t sell any cars I won’t be coming home with a check. Do salesman make hourly and then commission or could I potentially be working days and have nothing to show for it at all?
Hi Jen,
There are some dealerships that pay a weekly amount to their salespeople, but then they don’t make nearly as much commission as working all commission.
Yes, you could work for days with nothing to show for it, but you are focusing on the wrong thing.
You also make a bundle selling cars without having to work very hard an you might sell one car and make more commission than some people bring home in whole week.
So what is it going to be?
Lets move some metal and make some big money!
KB
Why would someone take a job and not even know the dealers pay structure? It’s imperative to have the dealer show you exactly how you will get paid BEFORE taking the job.
Hi KB, I am considering leaving my 9-5 office job for a career in sales. I loves VW and I am thinking of applying at the 4 dealers in this city because they are all hiring sales professionals. I am used to making the same amount each week. My fear is going from getting paid to getting nothing. Can I expect to sell cars in my first month and get better from there? I have previous sales experience just not auto sales.
Hi Jason,
Everyone likes knowing how much they are going to make every month, but obviously you are not happy with that amount.
The question is whether you are will ing to take a risk on yourself in order to make a better like. Getting paid on commission only can be pretty scary.
Don’t expect to make too much for the first month or two as it takes a while to get in the groove.
Just be prepared and decide that you will succeed no matter what and focus on what kind of money you can make as a car salesman.
Good Luck
KB
KB You seem to be the one with all the great advice.
I went to my local GM dealer to drop off a resume. All of the sudden I find myself talking with the 2 owners and the financial manager, all at separate times. This took about an hour and a half. We talked about the fact that I am 41 and never have sold cars before. I was in the construction business for 26 years. I have sold jobs from $100 to $500000 dollars. I told them that selling is basically designing something for someone and then selling it to them, tile, kitchens, cars, etc.
They called me back in a day later, which was today, and I met another manager named Scott. They all were impressed with my attitude and personality. They said that I would receive a call Monday and handed me an employment application.I hope this means I am going to get hired.
I then asked as I was leaving if I could stroll the lot to look at the cars. He said be my guest. I ran into another sales team member there named Johnny. Johnny explained how happy he was to work there and that the owners are very encouraging. Also he said that there are only 4 other salesman in the company. Is this good. It is a GMC and Buick dealership.
Anyway, lots of positives. I am only in fear that I will not be able to make enough to support my family. We are not big spenders and have thinned our lives out.
With that said, am I making a good idea to change careers? And will I enjoy selling cars because I love to sell.
Thank you so much in advance for you response.
Kevin
Hi Kevin,
I hope you get the job. As far as your question about making enough to support your family, that is up to you because the opportunity is available.
However if you love to sell then then you will love selling cars.
About changing careers, that is hard for me to say, but loving what you do always leads to success.
Go get em
KB
Hi guys
You guys have been most helpful. Thanks a lot
Kunta
Hi KB,
This is a great thread and answers a lot of questions I had. To be a little more specific on some of my questions, I’m about to land a job at a BMW dealership as a “customer advisor” aka salesman. In the interview i plan on asking how many vehicles their top advisor moves a month, bottom advisor moves a month and if their overall volume is up or down vs LY, having these answered, is BMW a smart move to work for or is someone like Honda or Hyundai with everyone moving to high mpgs the better option? There are some other local dealers that are also hiring.
Thanks,
Berg
Hi Berg,
BMW is a great line, but the buyers of these cars are not as concerned about the gas mileage as the other lines that you mentioned. You didn’t say if you worked as a salesperson somewhere else or not, but for someone that is new to the business one of the brands that has more showroom traffic would probably a better place to get your feet wet.
I wouldn’t pass on the opportunity if it presented itself when you are new the higher traffic will help you get used to selling cars.
KB
I was offered a job today at a smaller start-up dealership that has been quite successful over the last few months and I am wondering what commission rate do you think I should ask for? It is looking like it will be somewhat negotiable right now so I don’t want to miss this opportunity and just take what they give me. Keep in mind that I am a seasoned salesperson with a great track record of success. The dealer called me at home and offered me the job based on a referral, I did not seek them out. Please give me any additional advice you might have.
Hi KB,
Great work here, I’m about to start working at a dealership in Manhattan selling FIATs and I was wondering if that would be different from selling other car brands. As in how does the one car model work out? (any help from Mini car salesmen?) and what kind of influence does the “new car company” have in the business? Also what kinds of things are gone over in typical car sales training?
I’m more than excited to start this but I’m a little nervous. I’ve got my school loans to pay off and NYC is expensive, but I’m going in head first and not looking back for the first 3 months.
Griffin
Hi Hays,
We all want as much as we can get, but you will have to feel them out.
You are experienced so you will know how to handle them.
KB
Hi KB,
I’ve been thinking about switching my sales career, and I would really appreciate if you could give some advise. I’m currently a membership advisor at an up-scale fitness club in the Miami area, and I also have sales managenment experience in the same field. I’ve been in the business for over 5 years, but I’m tired of the industry for a few reasons. I know I’m good at selling, but I’ve realized that in order to make $$$(when you need it the most)you must sell what people want to buy. Who doesn’t want a new car???
My only concern is that car salespeople’s reputation is not the best one. Do you have any tips to be successful in this business?
Thank you. Mateus
Congrats Griffin.
The new Fiat line should sell and it won’t be much different than selling and other brand.
It’s a great car company and a good product, yes you won’t have a dive line up of vehicles, but the people that visit your still will be there because they are interested.
Sell them like any other brand and you should do well.
Hi Mateus,
I will admit the reputation of the car salesman is not great and that is why we need more people in the business to be car sales professionals.
The money is there, the opportunity is there and all we need now are people that will be professional so we can drive out the riff raff.
KB
Is it true that new salesman gets a guarantee $2000 a month at Toyota Scion even if no sales were made?
Any experience with Sprinter van sales and potential commission?
KB-
I just interviewed and received a call that I am going to get the job. I have never sold cars before but have 19 years in RealEstate and Insurance sales. I will be with one of the largest dealerships in the area, this dealer is consistently the top seller in our area.
My question is, during the interview I met and spoke with 2 managers, both seemed to be upfront and did not sugarcoat anything. After speaking with them I was told that another would be coming in to speak with me. I was thrown back, this individual ripped my resume and application into pieces. He just went off on me and everything I had accomplished over the last 20 + years, telling how inadequate and irrelevant my accomplishments were.
I really did not what to think, he just got up told me I was not cut out for any type of sales and left. The manager then said thanks for coming in and I left. As I said earlier, I then got a call telling me they wanted to hire me and I showed them I was thick-skinned and could handle the car business. Back to my question, is this a normal interview & hiring practice?
Thanks
Sorry, no experience with that one.
No, every dealer is different.
No that is not a normal hiring practice, but it sounds a little interesting.
Glad you got the job, You must have the RIGHT STUFF.
KB
hi kb, about to get a job at a lia Honda dealership with new and pre owned cars. the sales manager told me to come in tomorrow to talk he didnt say anything about a interview or anything im wondering how the normal hiring process goes?
Hi there,
I started in the car business 3 1/2 years ago. With no experience, my first full year, I made $103,000. I work for a domestic dealer with a solid pay plan. Management is awesome for both training as well as motivation. I have made as little as $4000 in a month to a high of $23,000 in ONE month. My previous experience was as an undertaker in a funeral home so if I can do it almost anyone can. Best of luck to all you new people out there. With proper management and lots of product knowledge you CAN do it
Hi JohnR,
Nice career move and GREAT JOB!
Hear that people!!!
KB
Hi..I’m planning to be a car salesman.What if the customer did not pay the full price of the vehicle, will I still get all the 25% commission?
Hi DJ,
Twenty Five percent commission is 25% of the profit on the sale, not the sale itself.
KB
Hi Mike,
Based on what you are saying I would think that “talk” means informal interview.
Sounds like you have a good shot.
Good Luck
KB
I am going to an interview for sales person job, I have never worked in sales before. I currently work at a casino, I have been in the casino business for 20 years. I have not worked with the public in 10 years, I am wondering if going into car sales is good idea.
So, I work at a gas station across the road from a dealership and they always try to get me to go over there and talk highly about getting paid more. Now do I do it an leave the 370 every two weeks or not. I mean I am 21 an have some college and engaged. I know I am young, but to my fiancé the wedding would mean the world to her and we have had to post pone it because of financial issues so what do I do? Is it wise to go or is it too much of a risk? …I would hate to fail for the first time an have it risk my future.
Please Help haha
Hi Mark,
You are asking if Car Sales is a good idea?
Of course it is a good idea, do you want to control your own income?
Do you want to make six figures a year?
Selling cars is the way to make the big bucks.
KB
Hi,
Got a question, I’ve been in sales for over nine years selling different things from car audio, electronics to home and business alarm systems. I also own my own business doing professional detailing and auto customs, and I love selling and talking with customers getting them what they want. The problem is I really want the chance to jump in car sales but I’m having a hard ttime getting my foot in the door, I’ve put into almost all the local dealers I think would give me a shot both mom and pop to the major hitter but in not getting any responces back on my app and resume. I call and show up to theses dealerships as often as I can but all I get is the run around, so if there’s any advice u can give on how I can get the attention I need to get in would be highly highly appreciated. I have a good sales record everywhere I’ve been and I can sell water to dry land but this really has me puzzled! Thanks
Hello I was wondering can I get some advice. I just landed a job at Southern Motors Honda and from what I seen I will be the only female car saleswomen. I wanted to know what kind of advice would you give me to be a successful saleswomen? Btw I have no prior sales experience but in my interview I was told to sale a pen to him and when I finished he said that was great and I beleieve you have what it takes.
hello, i’m seriously considering in working for Mercedes Benz right now. I’ve been thinking about if it is the right time to sell prime cars, considering the bad economy, i am in doubt if i would sell any MB’s….thanks!
KB,
After my unusual interview I began my training, lots of reading, tests, and 12 hour days. My first day on the lot I completed my first sale and delivery. The most difficult part of the job is trying to stay busy and away from the negativity. I have yet to meet one sales person on our lot who does to hate everything about the job and our dealer. Is this normal?
I appreciate your site and the information you share. I’m buying your book tonight and will spend this week reading, and hopefully taking it all in. I’m actually really enjoying this opportunity, I can see this can be a very good way to make a living.