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How much does a car salesman earn in Australia? It’s hard to give an exact answer, and different sources provide different numbers, but on average, it seems, car salesman aren’t as hugely well paid as you might think – with entry-level positions starting as low as $40,000 per annum, rising to $140,000 for more experienced salesmen. The median average for a car salesman, according to neuvoo.com, is around $82,500.
The fact is, of course, that working in such a commission-based, sales-incentivised industry means that exact figures are very difficult to put your finger on, and the amount of variance within the industry – or even within a single dealership – can be potentially huge.
Who wants to be a used-car salesman?
Being a used-car salesman has long been a job that came with something of a social stain. Famously, in surveys of the most and least-trusted professions, used-car salesmen – and car-sales professionals generally – have not rated well.
As recently as 2016, used-car salesmen were still right down the bottom, below even journalists, but things seem to be looking up these days.
The most recent Ipsos Global Trust in Professions survey, from 2019, was conducted in 22 countries, and car sales people didn’t even make the list of least-trusted professions. Journalists were still way down the list, of course, but people who work in advertising were at the very bottom, even less trusted than “pollsters” – oh, the irony – politicians, government ministers and bankers.
It’s a very interesting insight into the way our community’s perceptions have changed. Perhaps it’s the case that fewer people are encountering car dealers, as they transition to buying vehicles online, but for some reason, the dislike of them seems to be reducing.
What attracts people to the job has long been a desire to get rich, of course, perhaps twinned with a love of selling things to people.
Another site – payscale.com, which claims average car-salesman wages are as low as $47,000 – describes the job of “automotive sales consultant” as being responsible for “helping automobile buyers discover which vehicles best fit their needs within their price range”.
The salesman shows the buyer the available cars, explains their features, answers their questions and then advises them on finance, if necessary, before closing the sale.
“As with any sales job, an automotive sales consultant must be an open, personable and persuasive individual who can gain the customer’s trust and make them feel comfortable about the big decision they may be making.
“They should ideally have a thorough understanding of cars in general as well as specific models to be able to answer questions and offer recommendations.
“Sales consultants are often on their feet for long hours and are on the move constantly across lots, making a certain level of physical fitness necessary.”
So you need to work hard to convince people to buy your wares, and somehow not break a sweat (sweating looks suspicious), despite your physically draining job.
You could argue that it should be better paid.
On a commission
The perception that car dealers are rich may not be entirely accurate, but certainly those who rise to the position of dealer principal could earn a lot of money indeed. Again, this would vary wildly depending on the brand they are selling, the margins it offers per car, and the success and sales volume of that brand.
At a lower level, of course, car sales people are incentivised by commission, which means they get a certain amount of money for every car they sell, which can, if it’s been a tough period, make them seem particularly desperate at the end of any given month, and even more so at the end of the financial year.
It’s safe to assume that the way the market works in the US is fairly similar, and over there, according to Jason Lancaster, editor of AccurateAutoAdvice.com, “most car salespeople don’t earn a whole hell of a lot of money”.
He would, of course, be generalising when he says that dealership salespeople average about 10 car sales a month, and earn, in the US, around $US40K a year – or about $330 for every car they sell.
As he points out, of course, there’s a big gap between truly great salespeople – generally those with more experience as well as the gift of the gab – and bad ones. A good sales person at a Toyota dealer in Sydney might easily move 20 HiLuxes and a few Camrys per month, while a less talented one might struggle to sell half a dozen. The money they take home, as a result, would be entirely different.
It’s also often the case that the commission can vary, depending on the type of car being sold, and whether it is new or used. There are many variables and moving parts, and these deals are negotiated differently in different dealerships.
It’s not unusual, however, to see car-salesman roles advertised with a “retainer” – meaning a guaranteed, basic wage for turning up – plus commissions on top. The variance here can be large as well. We fund jobs with a retainer of $55,000, plus a car allowance and “commission expected to top $50K”, which sounds like no guarantee at all.
Other ads feature the phrase “uncapped commissions”, which suggests that sometimes your commissions would be capped, no matter how many cars you sold.
Where your dealership is, and what brand you’re selling, will obviously effect your earnings. We saw one traineeship offered in a nice Sydney suburb that was paying $120,000 and included “training and support”. That’s a pretty good starting wage for a trainee.
According to payscale.com, the average wage for a car sales person is $48,000, but they can also earn an average of $3000 a year in bonuses on top of that, plus an average of $19,888 in commissions.
It goes on to say that salary can range from $38K to $55K while commissions can range from $10k to $54K.
The cream rises to the top
As we’ve explained, a car salesman’s salary can be a very changeable thing. Ask some experts how much car salesmen make per car and they’ll tell you it’s as little as $300 per sale, while others will tell you it’s $1500, or more.
What is clear is that to car salesmen, commissions are everything, and the more cars you sell, the more money you will make, and that if you continue to exceed your quotas every month – every salesperson is expected to sell a certain number of vehicles per week and per month, and those who don’t make quota don’t last long – the amount of commission you’re getting could be negotiated upwards.
In the end, being a car salesman is all about making sales, and if you’ve got the confidence to pull it off, you can make buyers feel safe and comfortable, and even have them trust you, you’re going to earn pretty good money. And hopefully own your own car dealership one day.