Yes, car salesman get payed a hourly rate. A salesman’s wage usually includes a basic monthly wage with a commission payed for each car that is sold or delivered in that month. But it is important to note that almost all work more than a 40 hours per week. Meaning car salesman often earn less than minimum wage if they don’t sell many cars in a month.
This type of pay structure is normal whether a salesman is selling new or used cars. Pay structures and commission rate can vary depending on the business type and vehicle or product being sold. According to TotalJobs, the average car salesman earns £32,500 per year, but the range of income is massive. With some earning as little as £19,000, and the best making £47,500.
Typically a basic wage for a car salesman is circa £1000 per month. He or she will then get payed a commission on the number of car sold and any finance or insurance (known as F&I in the motor trade) products they sell as add on’s. Finance commissions are normally payed as a percentage of the profit from that product or as a set fee. This again varies from business to business and often depends on the product being sold.
The same is true of any additional insurance and warranty cover. These products can range from extended car warranties to alloy wheel and paint protection products. Guaranteed Asset Protection (GAP) insurance has also become a widely sold product in recent years. This insurance is designed to protect clients when they make an insurance claim and receive a payout that’s less than the cost or value of the car when they bought it. It will pay them the difference so they don’t lose money. This product is incredibly popular and is easy to sell. Garages often incentivise salespeople to sell these extras by offering higher commission rates, and has become a valuable additional income for both the salesman and garage.
Some garages and large dealer groups pay a basic wage and commission on a sliding scale. Often meaning you don’t receive any commission until you have sold a set number of cars per month. This could mean you fail to achieve a set number by 1 unit and receive zero commission for a months work.
This is often used to incentivise and pressure a salesman to always be selling and to always be at work. Often making taking time off or having a fortnights holiday stressful or in some cases impossible. Sale staff are also expected to take phone calls and emails during these periods. In most cases staff are expected to answer 24 hours a day, 7 days a week.
But this is not always the case. Some garages take a more modern approach and insist staff take time off and stay fresh. Keen to avoid salesman burning out under the continuing pressure or always needing to be selling. This attitude is a direct response to the high turnover of staff that is the norm on the cars sales environment. Some garage car of course see the value in retaining high performing staff and want to keep then performing well in the long term. While not yet the norm dealers do seem to be slowly moving in this direction.
New salesman are often given introductory offers when they first start in the job. These offer normally take the form of a guaranteed wage for the first three months in the job. This gives the new salesperson time to learn the ropes and get acclimatised to the new surroundings and sales environment. It’s also common for the new employe to shadow a more experienced salesman or sales manager if they have little or no previous experience.
Franchised dealers and used supermarkets often require a new salesman to take an introductory course regardless of their level of experience. These courses will often cover paperwork procedures and product introductions. Basics of salesmanship are also covered at these such events with various common customer facing situations played out via role-play.
Regardless of the type of business a car salesman works at he’s only as good as his next sale, and will always be under pressure to sell and make money for the company. So if a new sales person fails to make the grade he will soon find himself looking for other employment. Surviving on a car salesman’s basic hourly rate is not sustainable or worth doing for most people.