If you have thought about selling cars or if you’ve just started selling cars, you might have some questions. Most commonly – what do they get paid? This information is extremely current and is based on data from car dealerships all across Canada, from Vancouver Island to PEI.
How Does the Salary / Commission Work?
Car Salesman Salary and Commission:
- Typically the guaranteed wage is very low – about $2,000 per month.
- Pay structure based almost entirely off commission and bonuses.
- Average commission is about 25% of the gross profit made on the sale of the vehicle. For example, if the dealership made a profit of $1,600, the sales person would make $400. This would represent the average commission on a vehicle sale. It may be slightly lower on cheaper brands and slightly higher on luxury brands such as BMW or Mercedes.
- Bonus structures are set up to reward the high performers. For example, the top two or three sales people probably earn all of the bonuses.
- The average salesperson sells about 8 vehicles per month and makes about $3,000 per month.
- Top performers sell 20+ vehicles per month and make $12,000 – $15,000 plus per month with bonuses.
Finance Manager Salary and Commission:
- Pay plans vary significantly from dealership to dealership, but typically pay plans are based on the amount of profit generated in the “back end”.
- Back end profit is the profit that is not made on the sale of a vehicle. For example, the profit on extended warranties, protection packages (undercoating, leather protection, etc.), life and accident insurances, administration fees, etc.
- The finance department is one of the major profit centers in a dealership.
- A typical pay plan may be 20-25% of the profit the finance manager generates. Typical averages are between $1,000-$1,200 with top performers averaging over $2000 per deal.
- The average finance manager probably oversees 30-60 deals per month. Because of the huge impact one person can make on the owner’s profit, top finance managers are paid extremely well.
- Average finance managers make between $8,000-$12,000 per month and top performers make $20,000 plus per month.
Sales Manager Salary and Commission:
- Pay plans vary significantly, but are typically structured as a percentage of the total gross profit generated by the sales and finance departments.
- Average salaries for a sales manager are about $8,000-$10,000 per month with top performers earning $15,000 plus per month.
What Are the Other Perks of Selling Cars?
- If you’re a top performer, they’ll give you a “demo” (free car provided by the dealership) to drive at no cost.
- Almost all dealerships have excellent benefits plans.
- You can easily make over $100,000 in your first year selling cars (and you don’t have to be a superstar to do this).
- Typically a university degree is not required.
What sucks about selling cars?
- Extremely high pressure. Manufacturers apply huge pressure to the owners to sell vehicles, and that pressure is applied all the way down to the sales staff.
- Working every Saturday and almost never having two days off in a row. In most markets, dealerships are open at least six days per week (sometimes seven) and Saturday is the busiest day of the week so everyone has to work. Working late. If customers are still at the dealership, the managers are going to make you stay. Plus most dealerships are open until 9:00 PM.
- Customers hate you for no reason. So many people come in with their guard up, that even if you’re the nicest looking, most knowledgeable, laid back person in the world they’re still going to treat you horribly. Uncertain pay cheques, especially for new salespeople.
- Customers calling you 24/7 when their car breaks down (you must be a mechanic too, right?)
- And according to some people…everything! There’s a very good reason that this job has such a high turnover. It’s a market where the owner’s number one commodity might very well NOT be the people working there.
- It’s one of the only industries where people walk away from jobs paying $200,000 + per year because they dislike it that much.