Car Salesperson Pay

by Automotive Employment on July 3, 2010

Before committing yourself to a new career in car sales, it is worthwhile to ask how much you are likely to be paid as a car salesperson and how you will be paid.

It is important to establish an understanding up front that all car salespeople are not paid the same and there are several determining factors in this.  One of the main ones is the dealership employer and the second is how successful the salesperson is.  Contrary to popular belief, a  salesperson who is lazy, undisciplined, or who lies or rips people off will earn far less than a professional salesperson who provides the right customer service.

When you think about it, this applies to probably every service provider in a competitive market.  There are good and bad pharmacists, lawyers, doctors, plumbers, newsagents, labourers, carpenters, electricians, sales managers,  and car salespeople.  If you are good at what you do, people are generally happier to spend their money with you and many will pay more to deal with you and will return to you again and again if you are good at what they expect you to do.

So take this as an initial warning – a good car salesperson will earn a lot more money than a bad car salesperson.  Good salespeople develop good reputations and receive repeat sales and referral  sales which grow their business and their income faster.

A car salesperson’s pay is normally structured with the following:

Salary – Retainer

This varies from state to state and sometimes from dealership to dealership.  Currently in New South Wales, the award salary for an experienced vehicle salesperson (not a trainee) is $660.90 per week (plus Sunday loading if applicable).  Wages may be paid either weekly or fortnightly, depending on the dealership.  Of course, the amount can be negotiable based on skills and experience and some dealerships may pay higher retainers to attract the right sales staff.

Commission

A salesperson is normally paid a percentage of the profit in each sale.  In volume vehicle sales, salespeople are often paid a ‘minimum commission’ of $50 – $60 per delivery when the percentage commission falls below this amount.  Prestige vehicle sales require a higher level of personal service and the profit and commissions are higher to account for this.  Sales commissions are normally paid monthly.

Company Car

Historically, one attractive benefit of a car sales job was receiving a company car.  From the introduction of Fringe Benefits Tax, dealerships have had to review the provision of a company car.  Some dealerships may still offer company cars, but others pass on the FBT obligations to the salesperson.  Other dealerships may instead provide a car allowance, which will be paid either weekly or fortnightly.  It’s worthwhile to know before accepting a job in car sales what your choices are.

Bonuses

Many dealerships (especially high volume dealerships) may pay a sales volume bonus for reaching sales targets.  For example, in a Hyundai dealership a salesperson with a sales target of 22 deliveries per month may receive a bonus if he/she succeeds in delivering 22 vehicles or more within a single month.  When bonuses will be paid will be advised when the bonus is announced.

Other Incentives

Sometimes, manufacturers and/or dealerships offer incentive programmes that reward with a prize the salesperson who delivers the best percentage over their sales target for a particular period, e.g. three months.   Examples of these prizes include cash, holidays, household appliances or department store gift vouchers.

A poor-performing salesperson will not last long in the industry and will probably earn about $40,000 p.a.    An average salesperson earns about $70,000 p.a. and the best performers who develop their skills and service can earn well over $100,000 p.a.

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