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How Much Do Car Salesman Make in Canada

How Much Do Car Salesman Make in Canada

How much money can you really make selling cars? It’s a question that attracts aspiring salespeople to dealership lots across Canada every year. The allure of big commission checks and six-figure incomes keeps the new car salesman dream alive.


But the reality often falls short of expectations. While it’s possible to earn over $100,000 as an auto sales consultant, it takes the perfect combination of talent, work ethic, and opportunity. For most, the median pay is far below the top 1% who claim the eye-popping salaries.


In this comprehensive guide, we’ll break down exactly how car salesmen get paid, what impacts their earnings, and how much income you can realistically expect. Whether you’re exploring a first step into car sales or a veteran looking to maximize commissions, you’ll learn the inside scoop on pay structures, how experience and performance affect your salary, and tips to increase your income selling cars.

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Average Car Salesman Salary

The average car salesman makes between $25,000-$60,000 per year according to ZipRecruiter data. This wide range depends heavily on experience level and performance. A rookie just starting out will be at the lower end while a seasoned pro can easily make over $100,000 at many dealerships. There’s a massive spectrum when it comes to earnings, with the top sales consultants taking home multiples of what the middle and bottom tier make.

 

How Dealerships Pay Car Salespeople

The majority of car dealerships pay their sales staff primarily through commission, which is a percentage of the gross profit made on each vehicle sold. This commission percentage typically falls in the range of 20-30% for new and used car sales consultants. So for example, if you sell a vehicle with a gross profit of $5,000, you would earn a commission of $1,000 – $1,500 on that sale at a standard pay plan.

There is often a tiered commission structure in place as well, with higher payout rates once sales volumes reach certain thresholds. The commission scales also tend to be more favorable towards new car sales, versus used vehicles. For a new car, the commission may be 25% of gross profit, while on a used car it is 20% of profit. This reflects the increased effort and time it takes to turn a new vehicle.

On top of regular commission, additional bonus opportunities exist at most dealers. There may be monthly or quarterly bonuses for hitting sales targets, customer satisfaction goals, or other performance metrics. Bonuses for finance product sales like extended warranties and service contracts are also common ways to increase overall pay.

 

What Impacts Earnings

There are several key factors that can greatly impact how much a car salesperson earns in a given year:

 

Experience Level

One of the biggest drivers of high pay is experience. Veteran salespeople who have been in the business for 5-10+ years earn more thanks to repeat and referral business. They build up a solid base of past customers who come back to them time and again when purchasing new vehicles. These repeat buyers translate into more units sold with less effort. Referrals from satisfied customers also provide a steady stream of fresh leads. So while new salespeople must prospect hard, veterans lean more on existing relationships.

 

Sales Performance

To earn top dollar in the car business, you need to move serious metal. The highest paid sales consultants consistently sell 20+ vehicles per month. They have mastered their product knowledge, negotiating tactics and closing skills to enable these exceptional sales volumes. While the average rep sells 8-12 cars per month, the top performers double or triple that productivity. More volume directly leads to higher commissions.

 

Extra Products

Another way top earners maximize pay is selling extra products and services to go with each vehicle sold. These add-ons like extended warranties, protection packages, financing and insurance all boost the profit per sale. The best salespeople have perfected the presentation of these back-end products and penetration rates north of 50%. That could mean an additional $1,000+ of gross profit on every deal thanks to extras.

 

Brand Prestige

One clear factor in earning potential is the brand a salesperson works for. Luxury and high-end vehicle dealerships typically have higher commission pay plans. The increased sticker prices and gross margins on premium brands allow for more compensation per sale. So while mainstream brands pay reasonably, landing a position with Mercedes, Lexus, BMW and other prestige marques holds more income potential.

 

Top Earning Potential

While the median pay for most car salespeople falls in the $40,000 to $60,000 range, the top earners in the industry make substantially more. The top 1-2% of sales consultants at high-volume, high-end dealerships have the potential to earn $150,000 per year or more. However, hitting this elite income level requires a perfect storm of favorable conditions:

 

  • Working at a prestigious luxury brand dealer in a wealthy metro area
  • Consistent inventory access for the most in-demand, highest-margin vehicles
  • Exceptional sales skills to move 20+ units a month
  • Maximizing backend profit on items like financing and extended warranties
  • Bonus spiffs for volume and customer satisfaction benchmarks

 

Essentially, to realistically earn over $150,000 annually selling cars requires being at the top luxury brand store in a hot market and having the skills to capitalize on that opportunity. It’s certainly possible, but requires standing out from the crowd substantially. For most salespeople, that six-figure zone will remain out of reach.

 

Median Pay Reality

While it’s enticing to think about the top producers earning over $100,000, the reality for most car sales consultants is much more modest. Industry data shows the median pay for mid-level salespeople is around $45,000 annually. This means half of all sales consultants earn less than this benchmark. Hitting the six-figure range is extremely rare and requires exceptional performance across all key metrics month after month.

To reach the $150,000+ earnings tier, you would need to sell 25+ vehicles per month on average, maintain excellent customer satisfaction scores, maximize finance/insurance profits, and have a high repeat/referral business rate. Essentially, you need the perfect storm of a hot market, inventory access, sales skills, work ethic, and a bit of luck. For most salespeople in an average dealership environment, a $45,000 median salary is a realistic expectation in the current market.

 

Pay Trends

The pay for car salespeople is rising in today’s market due to supply and demand dynamics. With low inventory levels at dealers, there is heightened demand from buyers which empowers salespeople in negotiations. This allows them to sell vehicles at or above MSRP more easily, boosting the profit per sale and their resulting commission checks. There is also a shortage of salespeople at many dealerships, making experienced and productive ones more valuable. Their pay plans and bonuses reflect this increased leverage.

These trends have combined to push car sales earnings up over the past couple years. Dealers need to offer strong pay plans to attract and retain sales talent in the current landscape. Many stores have increased commission rates and accelerated bonus scales in response. The most skilled sales consultants are taking advantage by moving to stores promising the highest incomes. Signing bonuses for luring top producers have also become more common.

For those able to sell 20+ vehicles per month consistently, six figure incomes are within reach at many dealerships today. This is especially true for those focused on new vehicle sales, and even more so in the luxury space. Brands like Mercedes-Benz, BMW and Lexus offer some of the most lucrative pay plans given the high prices and margins of their new models.

 

Getting Started

For those just entering the world of auto sales, the earnings potential likely starts on the lower end of the spectrum. According to data from ZipRecruiter, the average base salary for entry-level car sales consultants falls around $25,000 per year. This assumes you have less than 1 year of dealership experience and are still building your skills, client base and sales volume. It takes time to hone your product knowledge, practice your sales techniques and develop relationships with a steady stream of customers. And since pay is largely commission-based, inexperienced salespeople will close fewer deals and earn smaller bonuses at first. The good news is that skills improve quickly on the job, and pay can ramp up exponentially once you get rolling. After gaining just a year or two of experience and demonstrating strong sales abilities, you can expect your income potential to grow significantly. But when first starting out, be prepared for an initial base in the mid-$20K range.

 

Skills Needed

To succeed as a car salesman and maximize your earning potential, there are some key skills and attributes you’ll need to develop:

 

Strong salesmanship and people skills – Having the ability to connect with customers, build rapport, listen to their needs, and provide solutions is critical. You’ll need confidence, charisma, and emotional intelligence to guide customers through the sales process.

 

Persistence and work ethic – Car sales requires discipline, organization, and hustle. You have to follow-up relentlessly on leads and be willing to work evenings and weekends. Having the motivation to keep pushing through rejections and no’s will help you excel.

 

Product and industry knowledge – Customers expect salespeople to be experts on the vehicles they sell. You’ll need to thoroughly research and understand all the features, technologies, and specs of the models in your dealership. Ongoing training on current auto trends and innovations is a must.

 

Finding the Right Dealership

Choosing the right dealership to work for can have a major impact on your earnings as a car salesperson. You’ll want to research the reputation and pay plans at various stores in your area to find the best fit. Some key factors to consider:

 

Dealership Reputation – More established dealers with strong community standing tend to move higher volumes of units. This creates more sales opportunities. Look at online reviews and talk to current employees to get a feel for the work environment and management style.

Pay Structure – Pay plans can vary widely, so compare commission rates, bonuses and other compensation details. Some dealers pay 25% commission on new cars but only 15% on used. Volume bonuses also differ. Understanding the pay breakdown is crucial.

Inventory – Dealers with the hottest, latest model vehicles tend to attract more buyers. New car inventory is especially important if you want to maximize commission checks. Confirm the dealership gets adequate allocation from manufacturers.

Traffic – Are there always customers walking the lot and coming in the showroom? This indicates a high-potential location. Be wary of slow, low-traffic stores where you’ll be waiting around for sparse ups.

Volume vs Commission Rate – This is a key balancing act. Higher-volume dealers will provide more at-bats to make sales, but the commission rate may be lower. Lower-volume stores often incentivize with higher payouts per vehicle. Weigh these options carefully for your selling style.

 

Overall, you want a dealership with strong branding, adequate allocation, and a commission/bonus structure that rewards hard work. Finding the sweet spot between traffic and payouts maximizes your income potential selling cars.

 

Maximizing Earnings

To maximize your income in car sales, there are several key strategies:

 

Specialize in high-profit segments: Focus your skills on selling specific models or categories that have larger profit margins and commission potential. This may be luxury brands, performance cars, trucks, or SUVs. Become an expert in a niche.

 

Get manufacturer certifications: Earning special certifications directly from brands like Ford, Toyota, BMW etc. gives you access to more inventory, bonus pay plans and demonstrates expertise to customers.

 

Build repeat client base: Making an effort to stay in touch and earn return business from past buyers is hugely valuable. Happy customers who refer family and friends back to you represent sales that require much less work.

 

Combining these methods allows top sales consultants to maximize commissions on each sale, while having a larger pool of high-quality leads and inventory to sell.

 

Job Satisfaction

While the car sales career has its challenges, many find the job to be highly satisfying. Some of the rewarding aspects of the role include:

 

Flexible schedules – Dealerships are typically open 7 days a week, with shifts available on evenings and weekends. This allows sales consultants to work hours that fit their lifestyle best.

 

Unlimited earning potential – With commission-based pay, there is no cap on what top performers can make. Six-figure incomes are attainable for those with the right mix of skills, work ethic and market conditions.

 

Rewarding when sales are made – There’s a thrill and sense of accomplishment that comes with successfully matching customers with the right vehicle. Sales staff get to play a memorable role in one of life’s big purchases.

 

While there are certainly stressful aspects of the job like rejection and competition, the flexibility, income potential and customer interactions provide significant fulfillment for many auto sales professionals.

 

Downsides

While a car sales career offers high earning potential, there are some downsides to be aware of. The most significant is that pay is entirely commission-based. This leads to constant pressure to meet monthly sales quotas and income goals. The stress of uncertain earnings can be difficult for some to handle.

Turnover tends to be high, as many salespeople burn out quickly in the high-pressure environment. Dealerships are always looking to hire, as the average tenure for sales consultants is only 1-3 years. The role requires thick skin and perseverance.

The hours can also be long and unpredictable in the car business. Evenings and weekends tend to be the busiest times at dealerships, so standard 9-5 schedules are rare. Sales consultants are expected to work whenever inventory is available and customers are coming in. This makes achieving work-life balance challenging.

While the income potential is high for top performers, the car sales career path is not for everyone. The commission pay model creates significant stress to produce results consistently. Prospective salespeople should carefully consider whether the pressure of the dealership sales floor aligns with their skills and temperament.

 

Conclusion

In summary, a car sales career offers the potential for very high earnings, but reaching the top tier requires immense effort and sales skills. The median pay at most dealerships reflects the difficult nature of the role, with the typical sales consultant earning around $45,000 annually. However, for those able to consistently deliver sales volume, customer satisfaction, and backend profit, six-figure incomes are achievable. It comes down to targeting busy, high-end dealerships and then maximizing every aspect of the sales process. While the ceilings are uncapped, a car sales job is not for the faint of heart. With the right approach though, there are few careers that offer such direct control over your own earning potential.

 

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Questions About Canadian Car Salesman Pay

Car salesmen in Canada typically earn between $30,000 and $100,000 per year.** The average car salesperson salary in Canada is around $55,000. However, earnings can vary significantly depending on the individual’s sales abilities, dealership sales volumes, commission structure, and other factors.

 

The majority of pay for car salespeople comes from commissions. Commissions are usually a percentage of either the dealership’s profit margin on the vehicles sold or the salesperson’s total sales volume. Commission rates in Canada generally range from 20% to 30% of gross profit, but can sometimes be as high as 40%.

 

On a $30,000 vehicle with a 20% commission rate and $5,000 profit margin, the commission would be $1,000. Selling 10 vehicles per month at that commission rate would result in an annual income of $120,000. However, most salespeople sell fewer cars and earn less as a result. The top 10% of car salespeople sell 20+ vehicles per month.

According to Statistics Canada, the average salary for automotive sales professionals across the country is $55,254 per year.** However, car sales salaries can vary quite a bit across different dealerships. Luxury brand dealerships tend to pay higher commissions which allows their top salespeople to earn over $100,000 annually. Independent used car lots and high volume, low price dealerships tend to pay less — sometimes under $40,000 per year.

**On average, car salesmen in Canada make between $200 and $800 per vehicle sold.** However, it depends greatly on the price and profit margin of the vehicle.

 

For example, on a $10,000 used car with a $2,000 profit margin and a 25% commission rate, the salesperson would earn $500. On a $60,000 luxury SUV with a $5,000 profit margin and 30% commission, they could earn over $1,500.

 

The average new car sale commission is around $300, while high-end vehicles can garner commissions of $800 or more. Overall earnings depend on monthly or annual sales volumes.

For a $30,000 vehicle in Canada, most car salespeople would earn between $400 and $900 in commission per sale.** Assuming an average profit margin around 15-20% on a mid-range $30k car, that would come out to $4,500 to $6,000. With a 25% commission rate, that would result in $1,125 to $1,500 in potential commission per sale.

 

However, commission rates vary quite a bit by dealership — anywhere from 20% to 40% typically. On the low end at 20%, commission on a $30k car would be around $400. On the high end at 40%, it could reach $900+ for an exceptional salesperson at a luxury or high-volume dealership.

The average car sales commission in Canada is approximately 25% of gross profit.** However, commission structures vary widely depending on the dealership and vehicle brand. Some dealers offer 20-30% commission rates, while high-end brands or successful salespeople can make up to 40%.

 

On a $40,000 vehicle with a 20% profit margin ($8,000), the average Canadian sales commission would be 25% of $8,000, or $2,000. In contrast, a top salesperson selling that vehicle at a luxury dealer with a 40% commission rate could earn $3,200 or more.

The top 10-20% of Canadian car salespeople make quite good money, often over $100,000 per year.** However, the average and median incomes in the profession tend to be more modest, around $55,000 annually. About half of car salespeople in Canada take home between $30,000-$60,000 per year.

 

The most successful salespeople in the largest metro areas and luxury dealers can make upwards of $300,000 annually in high commissions. But that is less common. For most working in the industry, car sales provides a living wage but not necessarily high pay. Strong sales skills and willingness to work long hours improves earning potential significantly.

Most car dealerships in Canada pay salespeople through commission only, without any base salary.** This puts emphasis on sales volumes and rewards top performers. However, some dealerships offer a modest base salary to provide income stability in slower months.

 

When a base is offered in Canada, it typically ranges from $2,500-$5,000 per month — or $30,000-$60,000 annually. This guarantees the salesperson a minimum income, while commissions give opportunity to increase pay well beyond that. Dealerships more commonly offer salary guarantees to experienced sales managers. Base salaries are less prevalent for floor sales roles.

Since most Canadian car salesmen work on commission only, the hourly pay fluctuates dramatically** based on sales in a given week or month. During busy times and high selling periods, top salespeople can average $75-$100+ per hour after factoring in commissions.

 

However, during slower periods hourly pay can dip to below minimum wage levels if no vehicles are sold. When estimated across the full year, the typical car salesperson in Canada earns approximately $25-$35 per billable hour on average. Those numbers indicate annual pay between $40,000-$60,000 or more.

Car sales professionals tend to earn higher incomes working in Canada’s largest metropolitan areas**. This reflects higher sales volumes and luxury brand dealerships found in cities like Toronto, Vancouver, Montreal and Calgary.

 

Within these major cities, upscale neighborhood dealers and top brands like BMW, Mercedes-Benz and Porsche usually pay higher commission rates as well. For those reasons, **Toronto and Vancouver offer the highest car sales salaries** in the country on average.



**You do not need a college degree or diploma to work in car sales in Canada.** While postsecondary education could be helpful for sales skills, the most important requirements are strong interpersonal abilities, work ethic and motivation. Many of the top performing salespeople across the country did not attend or finish college.

 

Instead, dealerships look for smart, hardworking and ambitious candidates who can build rapport with customers. They prefer sales experience but also hire entry-level employees expected to learn on the job. Product knowledge can be gained along the way.

On average, female car salespeople earn similar incomes as their male colleagues in Canada.** Women with equivalent experience levels and sales skills tend to make comparable salaries across most dealerships.

 

However, research suggests women on car sales floors still face slight biases, especially from older male customers. This can subtly affect the number of sales and commissions achieved over time. But strong female salespersons continue breaking income barriers across the industry each year.

On average, Canadian car salespeople can earn higher dollar commissions selling new vehicles compared to used.** This reflects the higher average new car prices and dealership gross profit margins on new inventory. For example, commissions on a $50,000 new truck are usually greater than on a $10,000 used sedan.

 

However, profit margins and commission rates as percentages are often higher on used vehicle sales. And successful used car sales teams can sell higher volumes which increases overall earnings. So experienced sales professionals often maximize commissions across both new and used vehicles.

Top salespeople at luxury and exotic dealerships in Canada can make over $300,000 per year.** Brands like Ferrari, Lamborghini, Rolls Royce, Bentley, Porsche, Mercedes-Benz, BMW and Land Rover offer the highest potential commissions thanks to high prices and margins.

 

Commission rates at luxury dealers typically range from 25-35% of vehicle profits. Given the $150,000+ sticker prices, that allows Canada’s top high-end car salespeople to earn $5,000+ per sale in some cases. Those selling 20+ luxury vehicles monthly take home huge annual incomes.



No, car dealership commission structures and rates vary widely across Canada**. Independent used car lots often pay around 20-25% commission rates, while most major brand new car dealers offer 25-35% rates. Luxury and exotic dealers can pay up to 40% commissions to top performers.

 

Compensation plans also differ between franchised dealership groups. For example, AutoCanada and Dilawri Group have unique pay structures across their Canadian stores. So salespeople should research commission rates when considering dealership employment options.

Yes, it is possible for the top sales professionals in Canada to earn six-figure salaries of over $100,000 annually selling cars.** This is achieved primarily by those selling 15+ vehicles per month consistently, focused on high-end luxury or trucks/SUVs with the highest profit margins.

 

The country’s highest-paid car salespeople work at dealers representing premium brands like Porsche, Lamborghini, Ferrari, Land Rover, Mercedes-Benz, BMW and Lexus. They sell to affluent clients capable of paying $100,000+ per vehicle, earning commissions of $5,000 or more per sale.

 

But the percentage achieving six-figure car sales salaries remains below 10% industry-wide.

No specific education or certifications are mandatory to sell cars in Canada beyond a high school diploma.** Dealerships hire salespeople with strong communication abilities, customer service skills and the motivation to excel. Some prefer college degrees or industry experience, but many provide in-house training.

 

Essential soft skills for succeeding in Canadian auto sales include:

– Persuasion and negotiation talents

– Ability to build client relationships

– Product/market knowledge

– Resilience and work ethic

 

Many top performers across the country were hired without experience or auto education and worked their way up via continuous learning and refinement of selling abilities.

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