Car Salesman Salary Per Hour

Posted on February 10, 2022

A car salesman showing an excited couple a new car.

Auto salesmen are not entitled to an hourly wage if they are exempt employees. Most of them are paid on a commission basis or at a "piece rate," though some of these workers also make an hourly wage in improver to their commissioned earnings.

Whether they get paid through commissions or on an hourly ground can modify their workplace rights.

What payment plans are available for a automobile salesman?

Auto salespeople tin can exist paid with whatsoever of the post-obit pay plans:

hourly wage,
salary,
commission-merely,
piece-charge per unit, or
a mixture of hourly or salaried pay and commission pay.

They can also make "spiffs," or cash prizes from automotive companies or sales managers, for selling specific vehicles that are hard to move.

Many car salespeople are paid at least in function on a committee construction.

Do car salespeople get paid hourly?

A commission is a wage that compensates a worker for their role in completing the sale of a product or a service, similar a car.¹ The amount of the commission depends on the value of the sale.² Many motorcar sales professionals are paid entirely on a committee footing. The terms of their compensation are outlined in their commission agreement. For car dealers, these terms typically include:

how the commission will exist calculated from the gross profit of the sale,
whether the commission is earned from the dorsum end of the sale, like financing or an extended warranty,
commission differences between selling a new auto and a used car,
when the commission will exist paid,
the conditions that have to be met before the commission from a sale becomes "earned,"
the minimum commission that tin be earned for a sale,
whether there is a trade-in as a office of the bargain that changes the pricing, and
deductions for selling a vehicle beneath its sticker toll.

Some machine salespeople are paid a specific amount of money for each of their auto sales. If that amount does non modify based on the value of the car, it is "piece-charge per unit" compensation, not commission.^three

For example: Juan works at Car Dealership A in Los Angeles. He sells a $70,000 Porsche, a $40,000 Nissan, and a $15,000 Honda. He is paid $500 for each sale. He is being compensated on a piece-rate footing.

Janet works next door at Automobile Dealership B. She as well sells a $70,000 BMW, a $twoscore,000 Chrysler, and a $15,000 Toyota. She receives $1,000 for her role in selling the BMW and $600 for selling the Chrysler, but only $200 for selling the Toyota. She is receiving commission payments.

Some car salespeople, however, are paid hourly or on a salary. They are paid the same amount, regardless of how many cars they sell.

Finally, in that location are plenty of auto salespeople who make a base hourly or salaried rate, plus deputed or piece-charge per unit bounty for their sales.

Car salesman with customer in front of sedan

Non-exempt automobile salesmen are entitled to minimum wage, fifty-fifty if they earn a commission.

Do car dealerships take to pay their salespeople minimum hourly wage?

Fifty-fifty if they earn commission pay, automobile salesmen may be entitled to an hourly rate of at to the lowest degree the minimum wage if they are non-exempt employees.

In California, not-exempt employees are non exempted from labor laws and the Off-white Labor Standards Act (FLSA). Therefore, they are entitled to:

overtime pay,
rest and repast breaks, and
a minimum hourly wage.

Whether a machine salesman is an exempt or a not-exempt employee depends on whether they are an inside or an outside salesperson.

Only a few car sales professionals are exempt every bit an outside salesperson. To be exempt in this way, the employee has to:

regularly spend more than half of his or her working time away from the car dealership, and
sell or obtain orders for products or services.^iv

Most car salespeople who are exempt are within salespeople. To be exempt in this way, employees have to:

earn at least 1.v times the minimum wage, and
earn more than half of their bounty through commissions.^five

If a car salesperson does not meet these requirements, then they are non-exempt employees. If they are non-exempt, and then they are entitled to an hourly wage of at least the applicative minimum wage standard.

How does this impact rest or meal breaks or overtime?

If a salesperson at a machine concern is a non-exempt worker, they are non only entitled to an hourly pay of at least the minimum wage: They are as well entitled to overtime and paid meal and rest breaks.

About the Author

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Neil Shouse

A sometime Los Angeles prosecutor, attorney Neil Shouse graduated with honors from UC Berkeley and Harvard Law School (and completed additional graduate studies at MIT). He has been featured on CNN, Skilful Morning America, Dr Phil, The Today Testify and Court Telly. Mr Shouse has been recognized by the National Trial Lawyers as one of the Height 100 Criminal and Top 100 Civil Attorneys.