How much can a car salesman/women earn?

The table below illustrates the bands for theoretical comparison, based on a notional basic salary of £12,000 and average gross of £1,300;

We have heard exceptional quotes of £100,000 and £70,000 per annum occasionally but have often seen examples of good salespeople earning over £50,000 a year.  The pay structure is predominantly based on commission. Basic salaries for competent salespeople are generally around £10,000 to £14,000 a year.  All the usual benefits apply including holiday pay with average commission, pension and sometimes private medical healthcare.  In addition, it is usual for a salesperson to receive a fully expensed company car including full insurance, fuel in some form and full maintenance.  Although all these terms and conditions vary by employer and sometimes manufacturer – the pay plan also often varies with the success of the salesperson, where the basic salary can also improve with performance.

Commission schemes are generally based on a percentage of profit made on sales with other elements aimed at improving related measures such as the overall satisfaction of the customer.  The percentage is usually in the region of 8 to 14 percent of gross profit and the average is over 10%.  Numbers vary with manufacturer and the competence of the dealership management but you should expect average gross profit including finance commission on volume used cars to be around £1300 per unit and in prestige, around £2,000.  The main difference being that volume operations can provide far more “opportunities to do businessâ€� so £1300 versus £2000 is not as poor a comparison as it may first appear.

New car gross profit is more governed by the franchise than the dealer.  Elements of traditional gross profit are now contained in “campaignâ€� bonuses, “volumeâ€� bonuses, “customer satisfactionâ€� bonuses and some form of “quality of representationâ€� and “quality of performanceâ€� bonus.  Often, these “bonusesâ€� from the manufacturer amount to much more than the initial gross profit in any sale.  For this reason, nearly all employers find a way of folding these bonuses back into the deal when calculating the commission for the salesperson.  Don't be confused by the apparent complexity of this piece as most dealers have simple pay schemes for their salespeople which clear all this up.  Taking all these things into account – a volume franchised dealership, well run and in a good territory (including finance commission) should be making £800 to £1,000 per delivered unit at the gross profit level.

Commission schemes for salespeople then, generally take into account variable performances of the team and average profits in New being somewhat less than used.   In order to do this, most schemes vary the commission percentage by units sold or by total profit – in this way, they seek to reward the best salespeople.  Often additional bonus is available for selling new cars to make up for the slightly lower profit made when compared to a used car.  Some dealerships split the sales team so that new and used car sales are separate. Average unit sales would be around 150 a year at the bottom of the scale to around 250 for an upper quartile performer; where many people can exceed even 350 units a year in a volume franchise