One question that we are often asked relates to the salary for a car salesperson. Many people express at least a passing interest in the role and naturally they become more than a little curious about the remuneration that they can expect if they were to become a car salesman or car saleswoman.
We have also noticed that there seems to be an unsubstantiated belief among the general public, that car salesman are all millionaires. We believe that this erroneous belief stems from a combination of fear and ignorance. So many car buyers are both fearful and ignorant when they look to buy a car that their fear and ignorance conjure up thoughts of worse-than-the-worst-possible scenarios.
When I was in my early twenties I was in an accident that left some shards of metal embedded in my back. I saw my doctor who referred me to a surgeon. I booked in for surgery and, as I lay on the operating table and had been administered anesthetic, the surgeon said “Shit! I left the X-Rays in my office. Quick, point to where the metal pieces are in your back!” I groggily tried to comply, as I succumbed to the anesthetic. I awoke to find that although he operated for an hour, he did not find or remove one of the metal shards! Obviously, this surgeon was extremely unprofessional and did not last long as a surgeon! There are good surgeons and bad surgeons. There are good and bad teachers, doctors, labourers, carpenters, electricians, plumbers, newsagents, managers, and car salespeople. If you are good at what you do, people are generally happier to spend their money with you and many (myself included) will pay more to deal with you if you are good at what they expect you to do.
So as a warning – a good car salesperson will earn significantly more than a bad car salesperson. They will grow a good reputation and receive repeat and referral business which will mean that they have to deal less with the aggressive, angry, fearful customers who shop 20 dealerships and get so confused and worked up that they will screw every last cent out of whatever they buy and still be miserable with their purchase!
A car salesperson’s remuneration is normally structured as follows:
Salary – Retainer
It varies from state to state. In NSW, for example, at the time of writing, the award wage for an experienced vehicle salesperson (not a trainee) is $34,366.80 p.a. Of course, this can be negotiable based on skills and experience and some dealerships will pay higher retainers to attract the right sales staff.
Generally, most dealerships pay a percentage of the profit in each sale, which is around 0.1 % of the price of the car. Especially in volume vehicle sales, this often means that salespeople are simply paid a ‘minimum commission’ of $50 or $60 per delivery when the percentage commission falls below this amount. In prestige sales, a higher level of personal service is generally expected and profit and commissions reflect this.
For a long time, one of the big attractions of a job in car sales was being provided with a company car. Since the introduction of Fringe Benefits Tax, dealerships have had to re-think and/or re-structure the company car. Some dealerships do still offer company cars, but some charge the salesperson some or all of the FBT. Other dealerships offer a car allowance. It’s good to know before accepting a job in car sales what your options are.
Some dealerships (particularly high volume dealerships) may pay a volume bonus for achievements of sales targets. For example, in a Toyota dealership a salesperson with a target of 25 deliveries per month may receive a bonus if he/she succeeds in delivering 25 vehicles for the month.
From time to time, manufacturers and/or dealerships may run incentive programmes where the salesperson who achieves best against a pre-set target will win a prize – sometimes cash, sometimes a weekend away, a holiday or dinner for two and sometimes electrical goods or gift vouchers for department stores.
It’s fair to say that a poor salesperson who won’t last long in the industry will probably earn about $40,000 p.a., an average salesperson will earn around $70,000 and top performers who work hard to become very good in this industry can earn well over $100,000 p.a.