Most traditional car dealerships pay their salespeople on a “commission only” pay plan. This means if they do not sell a car, they do not get paid. For some “green peas” (new to car sales), there can be several days between selling a car and getting paid.
Commission-only pay plans are also one of the major factors to such high turnover rates associated with the retail car sales industry. There is no limit to what a car salesman can make on this kind of payment plan. The more experienced and talented the salesperson is, the more money they can make.
I know several car salesmen that make well over $100,000 a year on these kinds of payment plans. These salesmen have turned down Management positions several times because they are comfortable where they’re at, and they know their skill in sales is providing them well financially.
A commission-only pay plan may also fill the car dealer’s floor with “sharks,” these kinds of salespeople will stick you in the back every chance they get. If you’re timid, don’t apply yourself, and don’t have any natural sales skills or work habits. You’ll be lucky to make enough money to survive very long with this type of payment plan.
If a car salesman does not sell enough cars in a month on a commission-only sales plan to meet the guidelines of the state on minimum wage. The dealer will give the salesperson a “draw” against their commission. This option will not last very long either, commonly just a few months. The dealer is looking for producers that make them money, not cost them money.