The Average Car Dealership Employee Made Over $100,000 Last Year

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It’s Thursday and we’ve got a study that looks at car dealership employees, some more news on Argo AI’s demise, and a little hint at the future of the Renault-Nissan-Mitsubishi-Funyon alliance.

Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.

Dealership Turnover Lowest In A Decade

Since 2011, the National Automobile Dealers Association (NADA) has been studying dealership employees to watch employment trends in the industry. This year’s survey is out, showing that in 2021 salaries rose and turnover dropped by a large amount.

I haven’t seen the study, but the data was shared with Automotive News:

Average industry turnover was 34 percent in 2021 — the lowest level in the 11-year history of the National Automobile Dealers Association’s annual Dealership Workforce Study, the dealer trade association shared with Automotive News. It fell from 2020’s figure of 46 percent, which is where the annual turnover number had been hovering for several years.

That’s still a fairly high turnover. By comparison, the construction industry has an average turnover of 9.2%.

Doing a little math, Automotive News also determined that the average employee made $103,000 a year in 2021, a 27% increase over 2020 when the industry was in the throes of the pandemic. Obviously, that average includes higher paying jobs (sales/service managers) as well as lower paying positions.

All this makes sense given that, in a pandemic, you’re not likely to jump into another job (even with hiring up). It’ll be interesting to see how this changes next year, but good for Toyota Jan!

Lyft Cancelling Argo AI-Backed Taxis In Austin

LyfttttWith Ford’s announcement that they will essentially implode Argo AI we see the rest of the chips are starting to fall. Back in 2021, Ford, Lyft, and Argo made a big splash with a plan to add something like 1,000 new robo taxis to Lyft’s fleet.

You can guess how that plan is going. Lyft announced it was immediately suspending self-driving taxis in its trial markets of Miami and Austin.

From Fast Company:

“Argo AI has been a great partner and we’ve learned a lot from each other,” a Lyft spokesperson tells Fast Company. “This development does not impact Lyft’s autonomous strategy. We will continue working with our other partners to advance the safety and commercialization of AV technology.”

Life comes at you fast.

VW Pairing Up With Mobileye

VwwwwwThe collapse of Argo AI was a surprise, but it’s not much of a shock that Volkswagen is going with Intel-backed Mobileye to pick up where Argo left off, especially since Mobileye and Volkswagen are already working together.

What I am curious about are the details from this Reuters report, which adds a little more info to my query about the actual composition of Ford and Volkswagen’s investment:

Volkswagen’s and Ford Motor’s exit from Argo came after three years of joint efforts on the development of automated driving systems and investments of more than $3 billion, highlighting the cost pressure automakers face in that field.

While Ford took a $2.7 billion non-cash pre-tax impairment on Argo, VW might have to write down more than one billion euros ($1.00 billion), a source familiar with the company said.

Hmm…

We know Volkswagen put in at least $1.0 billion and then had another $1.6 billion as some sort of on-paper supporting investment. We don’t know how much each company ended up with, but what sounds like happened to me is that Ford split the company with Volkswagen, got Volkswagen to say it would put in $1.6 billion worth of ::waves hands meekly over valuation of VW’s existing autonomous cars unit:: to pump up the value of the company. Ford then counted that increased value as income. At some point Lyft got 2.5% of the company in exchange for data, though at what value is not clear.

What I’m curious about is how much more money Volkswagen or Ford actually put in. There’s an interesting detail in this old Forbes article:

However, during a recent Deutsche Bank conference, Ford CEO Jim Farley briefly referenced Argo, saying “My personal opinion is that I think they deserve the opportunity to be a one-stop-shop company, and that they will take on more of the go-to market responsibilities for our AVF (automated vehicle fleet).” Ford and Argo have since declined to comment on what this remark means for Ford’s mobility service ambitions.

However, it does appear that just as Cruise has supplanted Maven as GM’s brand for mobility services, Argo AI may be taking on a similar role for Ford. Given that Argo is currently pursuing a new private funding round ahead of a potential IPO in 2022, it may be that investors are more inclined to put money into a dedicated AV business like Argo than to provide Ford with the capital required to launch an entirely new line of business. This is likely part of the reason why Ford delayed its originally planned 2021 launch into 2022.

This is pure conjecture, but I wonder if that private funding round didn’t go as well as they hoped and that created a chain reaction that led to this.

Nissan May Take A Stake In Renault’s EV Unit

EvisionI do not regularly read the Kyodo News, but thankfully someone at Reuters does and they had this little tidbit from the ongoing work that Nissan and Renault (and I suppose Mitsubishi) are doing to repair their relationship:

Japan’s Nissan Motor Co is considering investing up to a 15% stake in Renault SA’s planned electric vehicle (EV) unit, Kyodo news agency reported on Thursday, as the two companies negotiate an overhaul of their decades-old partnership.

The Japanese and French automakers said this month they were in talks about the future of their alliance, including Nissan potentially investing in the electric vehicle business being spun out of Renault.

Ford has essentially done this with Ford Blue so Renault establishing its own EV-focused endeavor seems sensible. That Nissan would want a piece of this also makes sense.

The Flush

Have you ever worked at a dealership? If so, what was your experience?

Photo credits: Toyota, Lyft, Volkswagen, Renault

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59 Responses

  1. Sorry to be a little late on this, but I don’t think there’s a single dealership in Upstate NY (I’m not counting NYC for obvious reasons) that the average employees make is $100,000. Maybe the biggest dealerships in Buffalo & Albany?
    I’d love to know how exactly they came up with that. The turnover here too in pretty horrendous, atleast by the smaller franchises.

  2. Sure, $103,000 sounds good, but that’s the spread between veteran internet sales guys getting fed all the ups and the other guys on the sales floor, fighting for scraps, living paycheck to paycheck on their draw. I’m sure someone more experienced or knowledgeable than me will chime in, but that’s the way it worked out during my relatively brief stint in auto sales.

    P.S. It’s really true, don’t get into auto sales if you’re an auto enthusiast. Most customers don’t care and you’ll become quickly disillusioned that it doesn’t make one iota of difference. Yeah, I’m still a little salty about it.

      1. This has been the case every time I’ve shopped for a car, and the dynamic rarely works in my favor. Salespeople HATE it when you know more than they do and they get pushy very quickly…not to mention they aren’t going to prioritize you because they know you’re going to drive a hard bargain and they could turn around and sell a normie an SUV that’s out of their budget financed over 9 years at 12% APR.

        Maybe I’m just an asshole (distinct possibility!) but in my experience it actually seems to hurt to be a more qualified buyer. Like I’ve said, salespeople get frustrated with me almost immediately when I can tell them everything about the car, and as soon as dealerships have run my info and seen my credit/gotten an idea of what my finances are and discovered I usually buy well under my budget they usually stop caring about the sale and more or less say “take it or leave it, we don’t care”.

        I will say it was a little different when I bought the Kona N though, they understood it was a special car compared to what else was on the lot and were pretty respectful once I showed I was serious. Maybe it depends on what you’re looking at as well…I basically got laughed out of a BMW dealership when I said I was looking to spend 40 grand ish lol.

        1. My experience with this is that if I’m clear about expectations upfront (communication prior to ever setting foot in the dealership), and make it quick and easy for them (obviously I’m actually trying to make it quick and easy for myself) I can get respected without getting gouged.

          No salesperson wants to sit and BS with someone for hours about every color option, then see that person drive a hard bargain for a minimum commission, or worse leave and go down the street. The fortunate side effect of knowing more than the sales guy about the vehicle is that I know what I want before I even set foot inside. The sooner he can get on to his next mark, and I can go home in my new vehicle, the better for us both. If the sales guy isn’t willing to play my way, well, there’s a lot of dealerships out there who are.

      1. Same. I have no idea why they hire so many additional salespeople, just to have them attrition out like I did. They provide about 75-80% of their quality leads to 2, maybe 3 veteran salespeople and the rest of us starve. Sure, I guess the dealership worries their career guys will leave and take their contacts with them, but then why bother filling up a showroom with guys that look and behave like ravenous wolves, but would prefer not to be?

    1. In my experience, the most successful sales people had referral business coming to them.

      Waiting on ups all day was a great way to spend 3 hours with a tire kicker or someone fishing for a number to take across town and buy from them because they beat your price by $50.

      Like others here, I only did it for a few months. I had some referral business already coming in. I didn’t hate it, but definitely wouldn’t want to be doing that today to make sure I can pay my mortgage.

      Too many variables outside of your control. You can do your job perfectly and not sell a car all week. Management can suck. Your product can suck. Your service department can ruin a chance at referrals because who wants to deal with your dealership even if the sales guy is great?

      And no, product knowledge didn’t seem to matter. One of the old timers I worked with didn’t even know how many cylinders the car had. Still sold a bunch of cars.

      1. There’s money to be made in any industry. The question is, how likely are you to make that money? Do you really think you’re the next Lee Iacocca? Even if you have the talent, what do you think your chances are of becoming a legendary, break-out star on that level? It’s gonna take a hell of a lot more than talent.

        That’s why I’m becoming an electrician. Pretty much all electricians (who aren’t complete fuck-ups) make good money right from the jump, job security is excellent, and if you’re really that ambitious there’s still the possibility of rising to great heights at the top of some major contracting company—maybe even one you start yourself.

        That’s the kind of career to look for, in my opinion. Go for something where even the people on the bottom are doing pretty well for themselves. The possibility to do extremely well indeed exists just about everywhere, but plain ol’ arithmetic will tell you that almost nobody rises that high. By all means shoot for the stars, but make sure you’re gonna be covered in any case.

  3. I call BS on the $103,000 average too. Owner’s compensation went up million$, a bunch of people left/got laid off, the average goes up. The owner and half his family are on the payroll, everybody else is picking up scraps.

  4. If you can sell things, there is definitely money to be made. Cars, propane and propane accessories, rubber nipples, doesn’t matter. With that said, I’d guess it is more likely the sales manager, F&I guy, a few top sales folks, and maybe a few service department guys are pulling that number up.

    I do wonder how sales compensation has possibly changed with the current market. When I sold cars, we made a flat rate off new cars, escalating as you sold more. So volume with new cars is how you made money. Used cars, we made a percentage of the profit, so you could make more off one used car than 4 new cars.

    With inventory down, the ability to sell 15 new cars in a month might be a challenge for even the best…the cars simply aren’t available.

  5. Turnover statistics are at least as important as pay, if you ask me. After all, one’s goal in life shouldn’t be to make money—the goal is to be happy, money just helps make that happen. If turnover is crazy high, that almost always means that people aren’t happy. Miserable and rich is still miserable.

  6. I sold cars in the late eighties. The ad for the job said up to $50,000 a year. The manager said, “Forget that crap. That’s just to get applicants.” We worked about 60 hours a week. Some months you sell 25 cars, some months you sell 2. If your sales didn’t match minimum wage they had to pay you. If it happened twice you were fired. I sold Nissans which equated to a ton of stripper Sentras and Pickups. Minimum deals at $60 to me. If you sold a Maxima or (gasp) a 300ZX, the finance guys would cut your profit to the bone so they could sell warranties. Your $400 commission would be cut by over half. The finance guys would slap you on the back and tell you, “That’s the way the world works, Son. If you don’t like it, quit.” About 18 months was all I could take.

  7. In 1972 I just started hanging around a foreign car repair shop in San Bernardino, CA. I Started sweeping the driveway (for free) just for the priviledge of hanging around and asking dumb questions. I was 24. Within six weeks I had my own bay and was working full time despite being an active duty Marine. I made 40% of book and around $50 a week basic wage. I was taking home around $250 a week which was great wages in 1974. I stayed with them for another 2 years specializing in German makes. In the summer time I would set up a VW engine rebuild station. Early VW’s didn’t care for 70 mph on the freeway in the central valley, so I always had customers. I worked on MB’s, some BMW’s and a handful of Audi’s. I had no formal training, just learning from some of the best mechs in the business. I asked a lot of questions and paid close attention to any job we took that had something new to work on. Then the owner had a stroke and the place closed.
    After that I tried my hand at sales. It was a multi-brand dealership and I worked in Honda and Subaru sales. Both cars were relatively new to America and were not an easy sale. I moved a few Honda’s and a couple of hideous pastel Subaru’s and didn’t feel good about it. The Subaru’s were crap back then. What others have said about sales applied to me as well. I was frustrated at the ignorance of my potential customers and found that they really didn’t want to know much of anything about the mechanical side. I don’t remember exactly how much I made but it didn’t cover the bills. We were going further in debt. I worked four months at this thankless job and quit to join the Army.

    For a former Marine that was a gut wrenching decision but turned out to be one of the smartest things I ever did. Turns out the Army kinda likes former Marines as NCO’s. I was enlisted as a Corporal and made Acting Sergeant when I finished my advanced training as a Surveyor. Many sea stories hide in this single paragraph!

  8. I’ve worked at a dealership for the past 13 or so years, and I was around the industry basically my whole life. Growing up my mom worked at a Ford dealership and I practically grew up there. After high school, a friend got me a job with a small Dodge store as a detailer/lot kid, did that for a while and eventually got a chance to be a tech. I did that for about two years until a friend offered me a parts position at the Toyota dealership he’s at. My service manager didn’t want to lose me as an employee so he moved me into parts at Dodge as the assistant parts manager. Did that for about two years until this past May when I moved across town to the local Chevy store, where I am much happier. We’re the biggest wholesaler and performance dealer in the North East, and they treat me well and pay me well, so I can’t complain.

    Having done a little bit of everything and seen a little bit of everything, I can say that this industry kind of sucks, but there is money to be made and you can find a place or position you can be happy with. I was very unhappy where I was but I’m very happy with where I am now, and that has less to do with the automaker than the dealership itself. Growing up I never thought I’d be working at a parts counter, it’s not exactly a dream job, really I wanted to do product planning at GM but I’m not a big school guy, and with the way the industry has turned I think I would have been disappointed with that anyway.

    1. I always tell people, your happiness at work has less to do with what you do than who you do it for. By all means pick a career doing something you think you’ll enjoy, but no matter what don’t settle for an employer that treats you like crap. Move around until you find a good one, then do everything you can to distinguish yourself and move upwards.

  9. When I was a kid, I dreamt of owning my own car dealership, which eventually evolved into wanting to sell exotics. So in summer 1991 between junior and senior years of college, I went to a multi-line dealer, to learn what the business of selling cars was all about.

    I committed to the three months, but after a week I already knew that selling cars is miserable.

    Everyone that came through the door already hated me even before they met me. And I learned that 98% of the people who buy cars, are not enthusiasts and don’t really care about cars too much. I hated what I had to do to make sales. I hated the entire process of the bullshit back and forth. After 90 days, all I had to do was come up with a new plan for my life. I’ll add, that the idea of selling exotics for a living to the kinds of people who, on average, buy exotics, sounds to me like a special kind of hell.

    I sure learned a LOT about the business of selling cars though, but mostly about myself. It wasn’t all bad, but for certain one of the defining experiences of my young life at that point.

  10. 20-ish years ago while in college, I worked at the BMW dealer in town, detailing cars, running parts, and helping the sales department. It was a great job, got to drive every BMW from the early-2000s era. But yeah, even adjusted for inflation I didn’t make anywhere close to $100k. But taking half a day to drive a convertible E46 M3 to Vail on a perfect summer day more than made up for the lousy pay.

    1. God that was a helluva BMW era too…that gen of M3 and M5 are widely considered the gold standard, that’s about when the OG X5 dropped, and naturally I must ask….did you ever get behind the wheel of a Z8? That’s always been a dream car of mine but I don’t think the prices on them will ever come down.

      1. Yep great era with the E39 M5s and E46 M3s. But also the tail end of the E38 7ers (before the Bangle Butt), E46 330i ZHP (my personal favorite), and those first X5s and X3s. We even had a number of manual X5s and they were actually pretty damn fun. And yes, I did get to drive a Z8 a few times, along with the Alpina Roadster V8 and E65 B7. Craziest though was the Isetta (’57?); made a Miata feel like a mid-’70s Ford LTD.

  11. I know a few people in my family that tried Dealership sales. It ended quickly. I did detail for a small dealership in high school. the amount of Craigslist rebuilds on used crap and loss leader sales tactics was pretty bad. Worse the parents that owned it pushed it off on their kids who were completely stupid about vehicles. So I am not even sure the place exists now, but it should not.

  12. “the average employee made $103,000 a year”

    Say it with me Everyone: An average without a standard deviation is meaningless. Even with a standard deviation, it doesn’t tell you a lot, necessarily. Was the average $130K +/- a standard deviation of $10K or $50K or $100K?

    Also, while the median is slightly better than the average, since the median is the central value in the distribution, it’s still meaningless without a standard deviation.

    If you want to go with the best indicator of central tendency for something like salaries, what you really want is the mode (the most commonly repeated value in the distribution). For example, the average of this set of numbers below is 103, and the median is 90, but the mode is 25, so most employees in this small model earned 25K:
    25
    25
    25
    25
    25
    90
    90
    140
    150
    240
    300

  13. $103,000? That seems crazy to me. I know that six figures don’t go as far as they used to these days but that seems unusually high. That’s as much or more than most of the 20/30 something professionals I know who have degrees are taking home and I live in a major city. I guess the business of ripping people off sure pays out when supply is so low, sheesh. I’m fine with techs making good money (they deserve it IMHO) but salespeople? I haven’t met one I’d trust as far as I could throw them.

    That being said…hmmmmm. I might take a small pay cut if I could still take home 100+ and get to be around cars all day ????

    Speaking of which, have y’all seen the pricing on the new Civic Type R? It’s $44,000 with destination. For a CIVIC, and that’s before the inevitable markups. Honda and VW are absolutely gouging enthusiasts with their R prices. You’d be nuts to pay $45k for either.

    1. I just got a new company car. Its a ’22 Nissan Frontier with zero options (2wd, steel wheels (!), king cab (not crew cab. they dont make a reg cab anymore)). The sticker price was $30,375.

      it does have a 310 hp V6 though (only engine available) and it is very fast.

    2. I wonder what the median was, at least for salespeople?

      I’ve never worked in auto sales, but I have worked in other commissioned sales, and the income distribution was pretty uneven to say the least.

      Also, my understanding is the hours are pretty brutal (6 day weeks expected, long shifts). 30-40% turnover seems high for a 6 figure job, so I don’t think it’s really as good as they are making it sound.

      1. No, the shifts were brutal it is no where near as good as they are making it sound. Six days a week and multiple days working 8 am to 9 pm. And if you wanted time off for anything you were seen as not being dedicated enough.

      2. I’d say your average sale person works roughly 1,000 more hours than most people, about 60 hours a week (3,120 versus 2,087). Let’s say this person is in the low-mid range of pay, getting around $45-55,000 per year. When you break that down as hourly pay, it comes out at a pretty paltry $14.42 to $17.62 per hour. You’d pretty much be better of doing nearly any other job in the service industry with a lower time commitment. Shoot, McDonalds is starting people out at $18/hour with a signing bonus these days. Big Boy, where I live here, is paying about the same with a $5,000 signing bonus.

        The only reason ANYONE who isn’t a vet does this is because they have connections and contacts and they want to be one of the lifers who get spoon fed a majority of the business. That’s where the real money is. By and large, though, it’s as much of a scam for most sales people as it is for the “ups” walking through the door to buy.

    3. Civic hatch 1.5T manual with no additional options assuming no markup was over $31k. It’s a decent car, but nothing that feels special and a downgrade in power from the Focus ST I paid $23k for. That Honda should be $26k tops, IMO, with the NA engine about $24k, but they’re having no trouble selling whatever they can get the parts to build. I wonder if that will hold as much if inventory starts to accumulate. Anyway, I’m glad for sticker shock as I ended up with a GR86 for under $30k including destination and I even got exactly what I wanted in about 6 weeks (luck was certainly on my side).

      1. The Civic hatch 1.5T manual one of the most bizarrely priced cars on the market, you can get the Civic SI for cheaper and it comes with more power, better handling and an LSD, sure you lose the hatch but it’s so sloped that it doesn’t really give much more usable space. I’m sorta shocked they sell any at all.

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