Ever wondered how much a luxury car salesperson makes? The average hourly pay in the United States is $23-$40USD an hour, and in Australia it’s around $40-$50AUD an hour. This is an average, and greatly depends on the level of experience that the salesperson has. Today we’ll explore the various factors that contribute to their income. Let’s go!
Commissions
How do car sales commissions work? Well, instead of getting a fixed salary, salespeople generally earn their income based on the deals they close and the revenue they generate for the dealership. The commission structure can differ from one dealership to another and even among luxury car brands, but the basic idea is that a percentage of the car’s sale price goes to the salesperson as their commission. This means that the more expensive the car, the higher the potential commission. On top of that, some dealerships offer bonuses and rewards based on sales performance, like reaching specific targets or surpassing sales quotas, giving salespeople even more earning opportunities.
Let’s take an example, like a high-end sports car that oozes luxury and has all the bells and whistles. These types of cars usually come with a big price tag, which makes them a golden opportunity for salespeople to earn a higher commission.
When a salesperson successfully sells a high-end luxury car, they earn a commission that’s calculated as a percentage of the sale price. Since the price of a luxury car tends to be much higher than an average car, the commission they receive is also larger. For instance, if the commission rate is set at 3% and the car sells for $200,000, the salesperson would earn $6,000 in commission. In comparison, selling a more affordable car for $50,000 with the same commission rate would result in a commission of $1,500. This is like comparing the Porsche Taycan and the 2022 Audi Q5 – a salesperson would earn a higher commission on the Porsche Taycan.
But, why do more expensive cars lead to a higher commission? The reason is that these vehicles often bring in more profit for the dealership. Luxury car brands invest a lot in developing and manufacturing their top-tier models, incorporating advanced technology, premium materials, and exclusive features. As a result, selling a luxury car can bring in a larger profit for the dealership compared to selling lower-priced cars.
Additionally, customers who buy luxury cars expect personalised experiences and exceptional service. Selling high-end cars requires salespeople to have deep knowledge about the product, understand the customer’s preferences and desires, and provide an unforgettable buying experience. Salespeople who excel in these areas and successfully sell high-end cars are rewarded with a higher commission to recognise their expertise and contribution to the dealership’s success.
Instead of getting a fixed salary, salespeople generally earn their income based on the deals they close and the revenue they generate for the dealership.
Factors Influencing Earnings of Car Salesmen
Several other factors come into play and influence their overall income.
Experience
Experience is a significant factor that can impact a luxury car salesman’s earnings. Salespeople who have been in the industry for a long time and have accumulated extensive knowledge and expertise tend to have a higher income. With experience, they develop strong relationships with customers and a loyal client base, which can result in more frequent sales and repeat business. Their seasoned skills in understanding customer preferences, negotiating deals, and providing exceptional service contribute to their success and ultimately higher earnings.
Brand
The brand of luxury vehicles that a salesman represents can also make a difference in their earnings. Some luxury car brands have established themselves as prestigious and sought-after, attracting a loyal customer following. Selling cars from such brands can lead to increased sales opportunities and higher commissions. Customers who are specifically looking for those luxury brands may be more willing to spend a significant amount, which can positively impact a salesman’s earnings. On the other hand, representing a lesser-known or newer luxury brand might require extra effort to build customer trust and generate sales.
Location
The location of the dealership is another factor that influences a luxury car salesman’s earnings. Dealerships situated in wealthy areas or thriving luxury car markets tend to offer greater opportunities for sales. These locations often have a higher concentration of potential customers who have the financial means and desire to purchase luxury vehicles. Additionally, wealthy areas may have a higher demand for luxury cars, leading to more frequent sales. Another example of how location influences sales is when car dealerships position themselves near other car dealerships or shop clusters. This strategic positioning allows customers to conveniently compare options, explore multiple dealerships in one visit, and creates a competitive environment.
Related: How to Rent a Luxury Car
Career Progression in Sales
Those who consistently perform at the top of their game often find themselves on a trajectory that leads to advancement within the dealership. This journey can involve transitioning into managerial roles, where they take on increased responsibility and enjoy additional benefits that come with it. Alongside their base salary, top-performing salesmen turned managers may have the chance to earn higher base salaries or even a share of the dealership’s profits. These added financial incentives reflect the increased responsibilities they shoulder, such as overseeing a team of salespeople, managing inventory, implementing sales strategies, and ensuring smooth operations. With greater influence and decision-making power, they contribute to the overall success of the dealership and are rewarded accordingly.
Alongside their base salary, top-performing salesmen turned managers may have the chance to earn higher base salaries or even a share of the dealership’s profits.
Market Trends in the Sales Industry
Staying up to date with the latest trends allows salesmen to effectively communicate the unique selling points of each vehicle and highlight the benefits that resonate with customers. For example, as electric and autonomous vehicles gain traction, understanding the intricacies of these technologies allows salesmen to educate customers, address their concerns, and emphasise the advantages of these cutting-edge options. Being knowledgeable about industry developments positions salesmen as trusted advisors and helps build stronger rapport with potential buyers.
Job Satisfaction and Challenges as a Salesman
Selling high-end vehicles as a luxury car salesman is a profession that offers both fulfillment and challenges. On one hand, there is a deep sense of satisfaction in meeting customers’ desires for luxury and performance, closing significant deals, and experiencing a sense of pride in the accomplishment. Successfully catering to customers’ aspirations and providing them with a top-tier product that aligns with their lifestyle can be incredibly rewarding.
However, the job also presents challenges that salesmen must navigate. Meeting sales targets consistently is essential, requiring perseverance and strategic approaches to overcome challenges. The luxury car industry is highly competitive, with customers having numerous options and high expectations. Salesmen should constantly differentiate themselves and their offerings to stand out in the crowded marketplace. To succeed, they need to master a range of skills, including strong interpersonal abilities to build relationships, in-depth product knowledge to effectively showcase vehicle features and negotiation expertise to close successful transactions.
Salesmen should constantly differentiate themselves and their offerings to stand out in the crowded marketplace.
Training and Qualifications to be a Salesman
Many dealerships recognise the importance of equipping their salesmen with the necessary skills and knowledge to succeed in the competitive automotive industry. It’s usually assumed that you would have finished High School at minimum, and it’s a bonus if you have a degree in finance or sales. Dealerships often offer comprehensive training programs as well.
These training programs cover a wide range of areas that are essential for success in the luxury car sales profession. One key aspect is product knowledge. Salesmen must have a deep understanding of the luxury vehicles they are selling, including their features, specifications, performance capabilities and technological advancements. This knowledge enables them to effectively showcase the unique selling points of each vehicle and answer customer questions. Additionally, understanding the brand’s history, reputation and values can further ensure the salesman’s credibility and ability to connect with customers.
Salesmen must have a deep understanding of the luxury vehicles they are selling, including their features, specifications, performance capabilities and technological advancements.
Sales techniques and customer relationship management are also crucial components of training programs. Salesmen learn various strategies and approaches to engage customers, build rapport, identify their needs, be persuasive and provide personalised solutions. Training programs often include role-playing exercises, simulated sales scenarios and guidance on negotiation techniques to help salesmen navigate the sales process with finesse. They need to be able to tell a potential customer why a luxury car is worth it for them and their specific circumstances.
Is Being a Luxury Car Salesperson a Good job?
Whether being a luxury car salesperson is a good job or not depends on individual preferences, skills, and career goals. Here are some factors to consider when evaluating the suitability of this profession:
- Financial rewards – Luxury car sales can offer high earning potential, especially when dealing with high-end vehicles that come with larger commissions. Successful salespeople who consistently meet targets and build a loyal client base can enjoy substantial financial rewards.
- Work environment – Working in a luxury car dealership often means being surrounded by high-end vehicles and a sophisticated atmosphere. This can create an exciting and dynamic work environment that appeals to those who appreciate luxury and enjoy interacting with affluent clientele. If you enjoy showing up to work looking and feeling professional, this might be a job for you!
- Industry and market challenges – The luxury car sales industry is competitive, requiring salespeople to constantly adapt to market trends, meet sales targets, and differentiate themselves from competitors. It can be a challenging and demanding profession that requires resilience, dedication, and continuous learning. Before becoming a car salesperson, make sure you can meet the demands that come with the job.
- Interpersonal skills – Successful luxury car salespeople possess strong interpersonal skills, as they need to build relationships, understand customer needs, and deliver exceptional customer service. Those who enjoy connecting with people and providing personalised solutions may find this aspect of the job rewarding. On the other hand, if you don’t enjoy socialising and talking to people, let’s just say you likely wouldn’t make it past the interview room!
- Lifestyle flexibility – Depending on the dealership, luxury car salespeople may have flexibility in their work schedule, allowing for a better work-life balance. However, note that weekends, holidays, and long hours might be required during peak sales periods like Christmas.
While the income of luxury car salesmen can vary, the potential for high earnings is undeniable. Commission-based structures, along with factors such as experience, the luxury brand represented, and location, contribute to their overall income. The industry offers opportunities for career progression, allowing top performers to get into managerial or executive roles. To thrive in this field, salesmen should stay up-to-date with market trends and constantly improve their skills. Ultimately, for those with a passion for luxury cars and a knack for sales, the rewards can extend far beyond the financial aspect, making it a fulfilling and profitable career choice.
Any information and advice is general in nature, and any opinions expressed are those of the author.
