What does A Car Salesperson Earn?
With few exceptions, car salespeople are paid on commission. Anyone with any amount of time in sales knows this, but if you’re just getting to the business, you may be unfamiliar with the idea of getting paid solely on your success.
Commission Pay. In most sales jobs, the employee is paid a commission. The commission paid to a salesperson is a percentage of the profit of the sale. The pay may not be predictable, is not guaranteed, and is not proportionate to how many hours you worked. Your income is based entirely upon your success.
- Base Pay + Commission. From time to time, this pay-plan goes in and out of fashion. It is a hybrid of sorts between hourly and commission. There is a small base salary and a commission paid for sales, although at a lower percentage of the sale’s gross or profit.
With a fundamental understanding of how car salespeople are paid — on their profit — one can begin to understand the earning potential in the job.
In my experience, a car salesperson will earn an average of $425 per car sold. This will vary, of course, based on the skill and expertise of the salesperson. A salesperson who is skilled at selling the vehicle’s value has a much greater earning potential than a salesperson who solely knows how to sell on price.
To be able to sell value and have the most significant earning potential in the business, a salesperson will need to be a master at
- Prospecting – A good salesperson will generate his/her own business.
- Following a proven sales process – A sales process is a set of repeatable steps that can be rehearsed and perfected.
- Building rapport – If given a choice, people prefer to buy from their friends. Learn to make friends.
- Asking questions – Asking questions is easy. Asking questions that close the sale takes deliberate practice
- Product knowledge– A skilled salesperson will present to the customer only the features that matter most.
- Presenting and demonstrating the vehicle – Demonstrating the car is where the client takes mental ownership of the vehicle.
- Bypassing price – Price isn’t as crucial to the customer as you may think it is.
- Negotiation – Negotiating doesn’t have to be uncomfortable.
- Closing the sale – When do you start closing the deal? The second question you ask is your first closing question.
- Unsold follow-up – Having the skills to continue to work the sale after the customer has left the showroom will be a significant factor in earning professional wages.
- Generating referrals and repeat customers – Learning to maintain relationships with customers will account for the easiest sales you will ever make.
With a collection of tools and skills, a well-trained salesperson who takes their job seriously can sell 11 to 17 cars per month in their first year. Let’s average that out to 14 vehicles per month.
A well-trained and seasoned salesperson can sell 30 or more cars per month.
As I mentioned earlier, in my experience, the average commission on a car sale is $425.
- $425 x 14 cars = $5,950 per month
- $5,950 x 12 months = $71,400 per year
Not bad for a well-trained first-year rookie. The well-seasoned salesperson can easily earn $150,000 or more.
To achieve this level of income, training, skills, and commitment are required. It’s not hard, and it’s not hard to learn.
If I can help, let me know.
Until next time.