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How Much Do Car Salesman Earn?

Posted: Aug, 04 2009

Have you ever wondered how a car salesperson's commission is structured? How are they getting paid and how much does that mean they earn? Knowing how much the car salesman is paid can help us understand the thinking behind their sales approach. This, in turn, can help you as you look to buy your car at the dealership (or over the phone or internet, if you choose those routes).

How much does the average car salesperson earn? We posed this question to our car-buying expert, Michael Royce, and here is his response:

Car salesmen are paid on a percentage of the profit of the sale. This percentage varies from dealership to dealership but usually runs in the 20% to 25% range. (Some dealerships use "sales teams." In this method, one salesperson will give you the test drive, do the write-up, etc. and the "team manager" will close the deal. In this case, they share the commission.) So if you buy a new car for, say, $300 over the invoice cost, the salesman may earn only a $50 to $75 commission.

In addition to his commission, though, the salesman can earn bonuses that are available from both the dealership and the manufacturer for good sales performance. Usually bonuses - or "spiffs" - are offered to any salesman who sells, say, over 8 cars in a month. "Spiffs" may also be offered for meeting certain profit goals (for example, selling a car for $1,000 over the invoice cost), selling certain profit-making extras (such as paint or fabric protection, alarms, extended warranties, etc.), selling a particularly hard-to-sell vehicle, and so on.

According to a recent national survey, the average commission for car salesmen is $250 per vehicle sold. The average selling price per vehicle is about $1,000 over the invoice cost. And the average number of cars sold is 8 to 10 vehicles per salesman per month.

Read More About Car Buying:

- Car Buyer Secrets
- Car Buyer School
- Car Buyer FAQs

Michael Royce is a consumer advocate and former car salesman. For more car-buying tips and advice, visit his Beat The Car Salesman website.

 
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1 - 5 of 293 Comments
navigator9000 Nov 07, 2009 10:36 PM
I just got a job as a salesman for a Ford dealership. I never sold a car in my life, never was a salesman before this job either. I retired early from my previous job and collect my pension, I was bored doing nothing and decided to look for a job. Well with the economy the way it is with few jobs available I decided to give car sales a try. I mean what do i have to lose but my time and since I collect my pension I am under no pressure to sell immediatly. I figured I would learn on the job and take it from there. Well today I started, I got thrown into the fire immediatly. I signed in at 9am, sold my FIRST car at 11:30, took me 2 1/2 hours for my first sale. I made $300 for this sale so I am happy about that. The guy who bought this vehicle was a easy sale, he was a payment buyer, he didnt care much about anything other than his monthly payment. So easy with that type of a guy, now he has his payment in his range that he wated but at SEVEN YEARS!!!! Now if any of you read this, do not buy a car based on monthly payments because if a dealership could put that payment for 10 years they would. You will get your payment you want but at a extended time period, YEARS AND YEARS!! When its time to get rid of that car you may have paid for it 2 times, if you want to trade it in before that 7 year time frame you will be upside down on the trade. You will owe more than what the car is actually worth. Look at the prices on the internet, look for the manufacturers rebates, look at the kelly blue book or edmunds for invoice price and do your home work because if you come to me unprepared I will take your wallet as well as your first born kid!!! I will do this with a smile and a hand shake and not think twice about it.
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navigator9000 Nov 07, 2009 10:36 PM
I just got a job as a salesman for a Ford dealership. I never sold a car in my life, never was a salesman before this job either. I retired early from my previous job and collect my pension, I was bored doing nothing and decided to look for a job. Well with the economy the way it is with few jobs available I decided to give car sales a try. I mean what do i have to lose but my time and since I collect my pension I am under no pressure to sell immediatly. I figured I would learn on the job and take it from there. Well today I started, I got thrown into the fire immediatly. I signed in at 9am, sold my FIRST car at 11:30, took me 2 1/2 hours for my first sale. I made $300 for this sale so I am happy about that. The guy who bought this vehicle was a easy sale, he was a payment buyer, he didnt care much about anything other than his monthly payment. So easy with that type of a guy, now he has his payment in his range that he wated but at SEVEN YEARS!!!! Now if any of you read this, do not buy a car based on monthly payments because if a dealership could put that payment for 10 years they would. You will get your payment you want but at a extended time period, YEARS AND YEARS!! When its time to get rid of that car you may have paid for it 2 times, if you want to trade it in before that 7 year time frame you will be upside down on the trade. You will owe more than what the car is actually worth. Look at the prices on the internet, look for the manufacturers rebates, look at the kelly blue book or edmunds for invoice price and do your home work because if you come to me unprepared I will take your wallet as well as your first born kid!!! I will do this with a smile and a hand shake and not think twice about it.
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steveroof911 Sep 10, 2009 5:47 PM
Preowned sales consultants make more money per sale . Agood used car sales personscronin can still make in excess of 75k per year. scronin
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jprpfan58 Sep 10, 2009 5:36 PM
I'd worry more about how the government is screwing us if I were you...
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jmorton525 Sep 10, 2009 3:40 PM
The writer is correct on a few points, however being an Automotive Sales Consultant (not a euphanism, I'll explain after) myself, I can complete this article. First, the title is not grammatically correct. Plural for salesman is salesmen. Could be a typo. Anyway, the correct term is Sales Consultant. There is probably a higher percentage of women in congress than in auto sales, but this is changing. Consultant, as I mentioned is not a euphanism. Salesmen, or better yet salespeople work in many places, such as department or outlet stores. Sales Consultants work in more specialized fields, such as automobiles, airplanes, and electronics, to name just a few. Agents work in fields such as travel and real estate. Representatives, agents and regular sales people mainly present a product or service, and most of those positions do require a certain amount of training. Sales Consultants on the other hand, require a great deal more training. Selling products with an average price tag of $20k to $40k is quite similiar to what real estate agents are doing, except that there is a lot more specialized knowledge necessary to properly sell an automobile than a house. Some would disagree with that comment, especially those in real estate sales with several sets of letters after their name. Does that mean that all auto sales consultants are doing the job correctly? Unfortunately no. Neither is every doctor, lawyer, police officer, college professor, etc,. Yet today, the person you buy an automobile from is likely to be far, far removed from the ones you have seen in the movies, like Cadillac Man or The Goods. So why is there still a stigma? I believe it is because you aren't required to have a selling license in order to sell vehicles. That should change. In the meantime, if you go out to shop for a vehicle and find the sales consultant to not listen to your needs, then ask for another sales consultant or go to another dealership. If however, you find a sales consultant who listens to your wants and needs, treats you right, and finds you a vehicle that fits your wants and needs then don't worry about what they are getting paid to do it. A professional sales consultant in any field has no interest in how much money you earn, our interest is in how we can consult you with our expertise to best fulfill your wants and needs in our product or service. Our ability to do that will determine our income.
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How are a car salesperson's commissions structured? How much does the average car salesperson earn?
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