Are you planning to be a car salesman and you want to learn how much do car salesmen make? Well, if that is actually the case, then you are at the right place because, in this article, there will be a lot to cover on this topic.
- Car Salesman
- Job Description
- Interview Preparation
- How Much Do They Make?
- How You Get Paid
- Should You Become One?
Being a car salesman is not something easy. Even though a lot of people think that this is the easiest thing in the world. Well, we can say that in the US is not as difficult as in other countries with lower income, so a person is more easily convinced on whether should I buy a new car here in the US.
Still, convincing people on a daily basis to get a car can be a daunting task. Especially if you are very inexperienced at this type of work since car dealerships want really capable orators to sell cars. Hence, you’ll know the struggle of dealers as well as folks in the business, such as skilled auto brokers.
Otherwise, they’ll end up with unsold new cars. People who know every ins and outs when it comes to the models that they sell and also know the psychology of selling. And this is the most important thing. But more on that, we are going to discuss later on where we are going to cover the traits of the car salesman.
First, we are going to learn what is a car salesman in general, then we will take a look at the traits that you should have as well as the requirements to become a salesman. Then, we will move on and learn how much do car salesmen make and see what is the average yearly income of this profession. So, if you want to learn more, follow along.
What Is A Car Salesman
Now before we dive deeper into the topic and learn more about how much do car salesmen make. Let’s first take a look at what is a car salesman in general. There are a lot of people struggling with similar questions and want to start from the basics. So, what is a car salesman?
When a person opens the door of the dealership, they should be immediately served. You just don’t want people to roam around your dealership without any clue. Because if you do so, you will not sell any cars.
So, there are a few car salesmen at almost every bigger dealership that take people around and show them what the dealership has to offer. Or if they want something rather unique, they help them spec out their perfect car and add them to their waiting list until the car is produced and comes to the dealership.
And what is worth noting is that not all car salesmen make the same amount of money. There are really capable folks who just know how to sell cars and make a ton of money for the dealership. So, they are expected to make a lot more money on annual basis compared to rookies who are just starting.
And if you are a rookie, you should really learn from what these people are doing and master the technique of selling cars. But what are the traits that car salesmen should have? More about that, we are going to cover next. And once we clear that, we will cover how much do car salesmen make.
Car Salesman Job Description
So, we learned more about what is a car salesman. Now let’s take a look at an average job description for a car salesman. What a car salesman should do at his job?
The first thing that a car salesman should do is to serve customers. And that means that you need to discuss the different models and help a prospective buyer meet their requirements based on their budget.
The second thing would require that you arrange a test drive for the customers. Usually, the car purchasing process is not something that is done in one day. Sometimes it takes a few visits and test drives of different cars in order for the customer to be sure that this is the right car for them.
The next thing a salesman should do is negotiate prices. Both when it comes to trade-ins, leases, as well as sales. A good salesman always can negotiate the right price that will suit them, as well as the customer. After all, the customer is likely well-versed in how much off the MSRP can I negotiate.
The next requirements are the different features that a car can offer. And for this, you really have to read everything and prepare yourself for this. You just need to understand cars and the options they offer. To know which option which car has. You will have to read a lot of window stickers in order to get into this.
And the last requirement is to learn how to prepare the paperwork for the sale, trade-in, or lease. And for this, you will have to get approval from the manager. Usually, managers are the most experienced ones in the dealership. Overall, these are the main tasks that you will do. But how much do car salesmen make?
Tips For Car Salesman
Now before we learn more about how much do car salesmen make, let’s take a look at the tips that you should follow in order to be a good car salesman.
We all learn the car salesman stereotype. Car salesmen in movies say 100 words in a second so the buyer does not have time to react and basically passes the information that is thrown at him. And honestly, things were like that back in the day.
And there are still some car salesmen that work this way. But times have changed. A lot of new features and options were invented and people are already pre-informed about them, thanks to the internet of course.
So, the chance of the car salesman to manipulate to that extent with the buyers as back in the good old days is not an easy task.
People in fact avoid salesmen that are too pushy and arrogant. For instance, a dealer refuses to cancel your extended warranty program. So, if you try to emulate Robert De Niro like in the video above, you can expect to make zero dollars.
So, your best bet would be that you try to satisfy the customer. As they say, the customer is always right, especially when the customer throws tens of thousands of dollars for a car.
So, don’t be too pushy, always listen to the customer and establish a good rapport. Share your knowledge with the customer and tell them about the downsides as well. Since if you tell them only the positive sides of the car, the customer will be turned off.
Mainly because there is always some negative stuff. Minor things that can still be a deal breaker. So, good communication skills for this job are essential.
Car Salesman Requirements
Now let’s discuss more about the requirements that you will need to have in order of becoming a car salesman before we discuss how much do car salesmen make. So, what are the average requirements for you to be a car salesman?
The first requirement is education. You don’t need to have a college degree. But any type of education that is specific to business and sales is often useful if you want to get the job. Education will always be put on top of the list, no matter what profession we are talking about.
So, grabbing an online course or some sort of education on sales is the way to go if you want to compete with other applicants.
Another requirement is industry knowledge. You need to have an interest in cars and know the lineup that this dealership has, as well as some of the features these cars have. So, if you are a car guy, you will find this really useful because you will finally be able to use your knowledge of cars.
Also, you need to have excellent communication skills. Both written and spoken. You need to be polite no matter what pressure you are exposed to. Since not all customers friendly people. That includes situations where there’s intense back and forth, or if they’re trying to sell their car to the dealer.
Also, some dealerships work on weekends and you have to be flexible to work on weekends as well. If you don’t comply with their work schedule, you will be removed from the shortlist instantly.
Also, you need to have a valid driver’s license. Sometimes you will also have to do some other tasks outside of the dealership. So, having a driver’s license is essential.
Overall, these are the requirements. But how much do car salesmen make? More about that, we will cover it in a bit.
How To Prepare For An Interview As A Car Salesman
Now that we learned what requirements you should have before you apply for a car salesman. Let’s now discuss more about how you can prepare for an interview for a car salesman. Since preparation is key if you are asking me.
And for this, you have to prepare yourself well. And for this purpose, you will have to learn all of the models that they sell. For example, if you apply for a Toyota dealership, you need to learn all of the Toyota models that are offered in the US.
So, good and thorough online research is mandatory. Learn the powertrains that they offer, as well as the colors and trim levels. So, it’s worth learning stuff like how do I know what trim my car is, or how do I find out what options my car was ordered with. Since these are the most important.
So, when it comes to Toyota you have the L, SE, LE, XLE, XSE, and Limited for cars. When it comes to trucks, you have the SR, SR5, TRD, and TRD Pro. And also, with the TRD trim you have some special colors and you should learn the colors.
In addition to this, all these cars are equipped with different features. And when it comes to the features, you should know at least the basics in order to be considered a good candidate.
There will be a lot of questions in the interview. So, you will have a lot to answer since nowadays employers are very demanding.
This is why you need to show a good level of car knowledge. Since you should never be the person that knows less about the car than the customer.
And not only that, here you will share your car knowledge, you will also share your interpersonal skills and how good you are with people. But how much do car salesmen make? More about that, next.
How Much Do Car Salesmen Make
Now let’s discuss how much do car salesmen make. How much money can you expect to earn as a car salesman?
Well, to be honest, not a lot compared to other professions like dentists, doctors, mechanics, welders, and other professions that have a high learning curve.
The national average for a car salesman’s salary is about $45,000 a year. And as we noted, this is the average. So, in other words, there is much worse than this. The minimal salary for a car salesman is about $19,000.
Which is about $4,000 from the minimal annual wage in the country. So, we can say that this profession is better paid than many other sales positions like cashiers for example. This is made all the more confusing given the recent car market adjustment.
Still, it is worth noting that there are some places where these positions are better paid. For example Texas and California. In these states, car salesmen make about $54,000 on average. So, this is about $9,000 more than the national average salary.
Also, there are some outliers in the car salesmen crowd. Some people make crazy money from this profession and manage to hit between $100,000 and $112,000 annually. That is more than double the national average.
These people are less than 1% of the total salesmen in the US. What is good though, is that 6% of the salesmen make between $61,000 and $66,000. And as we go up the ladder, these percentages shrink close to zero.
As we noted, the maximum that you can get is about $112,000. But this doesn’t mean that you will get it. These people are basically the crème de la crème, people who sell either a lot of cars. Or they sell really expensive cars. So, we learned how much do car salesmen make.
Ways Car Salesmen Get Paid
We learned more about how much do car salesmen make. Now further discuss more about the ways car salesmen get paid.
As you probably know, the position of a car salesman is very flexible. And if you are really good at your work, there is no reason to work for a fixed salary. So, let’s discuss the different ways in the following chapters.
How Much Do Car Salesmen Make, Payment #1: Fixed Salary
Now that we covered how much do car salesmen make, let’s first discuss the first type of salary. And this is the fixed salary.
So, when it comes to this way of getting paid, you will get a fixed salary at the end of the month, no matter how many cars you sell.
And this is one of the downsides because you will not get any bonuses. And frankly, it is a good type of agreement if you are still a rookie. Rookies sell fewer cars than experienced salesmen. So, if you are a rookie it is a better idea to have a fixed salary.
How Much Do Car Salesmen Make, Payment #2: Commission Only
The second type of salary that you can earn is commission only. So, what does this mean? Well, this means that you will earn a commission based on the value of the car you sell. For more context, check out our guide on the fair market value of a car and the actual cash value of my car.
The more expensive car, the higher the commission. So, if you sell a lot of cars during a month, you can agree with the dealership to be paid a commission from each sale.
And this is what most of the pros are doing. They earn based on how many cars they sell. And honestly, this is a very good thing. Since you can make a ton of money if you are really good at selling cars.
How Much Do Car Salesmen Make, Payment #3: Salary + Commission
And now that we learned how much do car salesmen make, let’s discuss the last way of getting paid. This is the plan where you get a fixed salary + commission.
And this is not bad either. You will earn a minimal salary. But with the commission, you will end up making a lot more money compared to the case when you get only a fixed salary.
So, to sum things up, going for a fixed salary is only recommended for rookies. If you are experienced, go for a commission or a salary + commission.
Car Salesmen Perks
Now let’s cover some of the perks of working as a car salesman. What are the perks that car salesmen get?
Well, even if you work for a fixed salary, you can get bonuses as well. Experienced managers who don’t want to lose their cash-making machine are very generous. So, in some cases, you can also make a ton of money simply as a bonus from your dealership.
Also, there are some special offers known as spiffs. These are the cars that salesmen try to push on people since they just want to get rid of them and replenish the lot with new cars. And on average, a salesperson can make anywhere between $50 and $500 on each sale of these cars.
Another perk is that you get a demo car in some cases. These are the cars that are tested by customers and on some occasions, the employees are also allowed to drive them.
Another perk is the medical and dental insurance that you get. Especially if you are a top salesman that is making a ton of money for the dealership.
And the last perk is probably the easiness of the work. You work inside most of the time, you don’t get rained on, and you don’t lift, what is better than that?
Should You Become A Car Salesman
So, we learned how much do car salesmen make and the perks that you get as a car salesman. But should you become a car salesman?
Well, we would say yes. Especially if you lack a college degree, this would be a really good place to start. And also if you really love cars and you are on track with the newest inventions in the car industry, you will definitely like it.
This job will also make your interpersonal skills a lot better and you can climb up the ladder. And one day you can even become a dealership manager or get a different managerial work.
How Much Do Car Salesmen Make: In Conclusion…
In this article, we have covered quite a lot when it comes to being a car salesman. First, we learned what a car salesman is and the tasks that a car salesman does. Then we covered the requirements that you need to have in order to become a car salesman.
After that, we learned more about the perks of being a car salesman, as well as how much do car salesmen make annually. And lastly, we learned whether you should become a car salesman or not.
FAQs To How Much Do Car Salesmen Make
Now let’s answer some frequently asked questions.
How To Become A Car Salesman
Well, first you need to have a degree in sales. You just have to have a clue of what are sales and how sales happen. You can take courses, community college, or a similar educational facility to educate yourself in sales. Also, learning about cars and having extensive car knowledge is important.
How Much Does A Car Salesman Make
On average across the country, a car salesman makes about $45,000. Remember that this is the average. The minimum annual wage is somewhere at $19,000 and the maximum is $112,000.
How Do Car Salesman Get Paid
They can work for a fixed amount of money or they can work for a commission based on the number of cars they sell and their value. For the pros, the latter is a more popular option. You can also work for a salary, plus a commission.
How Do Car Dealerships Make Money
They make money by selling and leasing cars. They get the cars from the manufacturer and then they add their fees on top of the MSRP. Then this is their profit. Dealerships are not regulated by the manufacturer. So, they are free to charge a lot more if the car is in demand.
Do Car Salesman Get Paid Hourly
Nope, in most cases, the car salesmen work for a fixed salary. But there are also highly experienced car salesmen who work only for commission.
Do Car Salesman Make Good Money
The amount of money a car salesman makes is pretty average when you compare it to some other professions. For example, doctors, computer engineers, other engineers, mechanics, or even truck drivers. Any highly skilled professional is better paid than a car salesman. The national average for a salesman is about $45,000.