How Much Do Car Salesmen Make? A Breakdown of Auto Sales Pay Structures

If you’ve ever wondered what car salespeople earn from negotiating deals and moving inventory off the lot, you’re not alone. Most buyers are curious just how much money car salesmen make from commissions and other incentives at dealerships.

Understanding how auto sales teams are compensated sheds light on negotiation strategies and competitive brand offerings. Let’s take an in-depth look at how much car salesmen make across the industry.

Average Annual Car Salesman Salary

Most salespeople in franchised dealerships earn between:

• $42,000 to $58,000 per year on average
• Top performers exceed $75,000 annually

However, some independent used car lots may pay as low as $30,000 annually.

Pay typically includes a lower base salary plus commissions, monthly bonuses, and other performance incentives. High performers take home bigger checks.

Sales roles at luxury brands tend to be the highest paying thanks to higher commissions on more expensive vehicles.

Typical Car Sales Commissions

The bulk of pay comes from sales commissions. Typical commission rates are:

• 15% to 25% of gross profit per vehicle sold
• Commissions may vary for used vs new car sales
• Minimum commission payout per vehicle, e.g. $200
• Higher commission rates at 20–30% for luxury brands

Gross profit is the difference between the vehicle sale price and dealer acquisition cost. Commission is a percentage of this gross profit per unit sold.

Higher commission percentages along with higher gross profit at luxury brands results in larger payouts for sales staff.

Common Bonuses and Performance Incentives

In addition to commissions, most dealerships offer monthly bonuses based on:

• Volume bonuses for selling 20+ vehicles per month
• CSI (Customer Satisfaction Index) bonuses for good reviews
• New car bonus for exceeding sales targets
• Used car bonuses for certified pre-owned sales
• Finance bonus for exceeding finance penetration goals

These programs incentivize sales staff to pitch used vehicles, financing packages, service contracts and more to boost overall store profits.

Pay Differences Between Brands

You can expect variations in pay across brands based on factors like:

• Luxury brands — Higher commissions thanks to larger profits. Top performers can exceed $100k.
• Mainstream brands — Moderate commissions but high sales volume. $60–70k average.
• Import brands — Competitive salaries but lower commissions than luxury. Around $50–60k on average.
• Independent used car lots — Smaller staff and tighter margins mean lower pay, often $30–40k range.

The brand prestige, vehicle price points, and dealership culture drive earnings potential for salespeople.

Potential Earnings for Top Performers

The very top car salespeople can earn $150,000 to $200,000+ annually through:

• Selling 25+ vehicles monthly
• Closing add-ons like service contracts
• Maximizing finance reserve profits
• Earning top tier volume bonuses
• Maintaining high CSI scores for bonus pay
• Pursuing positions as finance or sales managers

However, this level of income is extremely rare. Only the top 1–2% of seasoned professionals reach six figure pay across the auto retail industry.

Changes to Car Sales Jobs Over Time

The internet has dramatically changed car sales roles:

• More educated buyers performing research online
• Less reliance on salesperson’s knowledge
• Focus shifts to relationship building over product features
• Higher turnover as negotiations become more complex
• Online sales limiting walk-in opportunities

While still lucrative for hard workers, the path to success in automotive sales today requires more digital savvy and broader business skills than in decades past.

Steps to Becoming a Car Salesperson

To get started in automotive sales careers:

• Graduate high school or complete GED preferred
• Apply for open sales positions at area dealerships
• Go through hiring process including interviews and background checks
• Complete 2–8 week dealership training program
• Pass licensing exam to obtain state sales license
• Get assigned existing inventory to sell on lot
• Build client base and begin earning commission

No prior auto experience is required. Sales skills, persistence, product knowledge, and work ethic determine success once trained.

Pros and Cons of Car Sales as a Career

Pros

• High earnings potential in commissions/bonuses
• Low barriers to entry
• Ability to move into management roles
• Chance to run your own department
• Meet new people and build relationships
• Competitive pay at luxury brands

Cons

• High-pressure results driven environment
• Long, irregular hours including weekends
• High turnover and burnout is common
• Feast or famine paycheck fluctuations
• Dealing with rejection and customer negotiation

The lucrative upside comes with a high-stress sales grind. The role is performance based and not suited to all personalities.

Tips to Increase Your Earnings as a Car Salesman

To maximize your pay in auto sales:

• Prospect new leads relentlessly
• Build a referral and repeat client base
• Learn your inventory thoroughly
• Master your dealership’s sales systems
• Deliver excellent customer service
• Ask managers for better unit allocation
• Request leads for high-margin units like certified pre-owned
• Cross-sell added products like service contracts
• Capture positive online reviews to earn CSI bonuses

The hardest working, most driven salespeople who go above and beyond take home the biggest paychecks.

5 Key Factors That Determine Car Salesman Pay

1. Ability to move high volumes of inventory
2. Closing add-ons like finance and insurance
3. Customer satisfaction scores and reviews
4. Sales experience and tenure
5. Prestige of the brand and vehicle prices

Maximizing these areas through hard work and skill leads to the highest earnings.

FAQs

Do car salesmen get base salaries or only commissions?

Most get a lower base salary around minimum wage, with commissions making up 50–90% of total pay. Top performers earn 100% in commissions.

Which dealerships pay car salespeople the most?

Luxury brands like Mercedes, BMW, Lexus, Infiniti tend to pay higher due to larger profits per vehicle sold.

How much do car salesmen make on a $50,000 car?

Around $500 commission assuming a 25% payout of gross profit. Higher trim levels earn more due to added gross margin.

Can you make 6 figures selling cars?

Yes, the top 1–2% of salespeople at busy, high-end dealers can exceed $150k-$200k annually through high volume, add-ons and bonuses.

Should I expect feast or famine earnings in car sales?

Yes, some months you may sell 15+ for big checks, while others you may struggle. Managing your pipeline is key for stability.

Rev Up Your Earnings as an Automotive Sales Pro

While competing with online sales and negotiating educated buyers makes car sales challenging today, high performers can still earn excellent incomes at the right dealership.

Understanding pay structures and maximizing your skills at prospecting, negotiating, and building rapport drive top tier earnings year after year. With hard work, the potential for a lucrative sales career remains.

Now that you know how much car salesmen make, you can gauge if an automotive sales career aligns with your earning goals and determine which dealer may be the best fit.

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