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Here’s How to Buy a Car on Consignment in 5 Steps

Learn the ropes of car consignment as seen from a buyer’s perspective.

It’s no secret – buying a consigned car means paying a middleman. Doesn’t that mean you’ll pay too much?

Ideally, that middleman is trustworthy and has vetted their cars for a high level of quality. But what if that’s not the case?

As the middleman, consigners have a very real incentive to deliver you the best experience a car buyer could possibly have. Often that means you’ll actually wind up paying less than you would on the open market, or at very least, you’ll get more for your money along the way.

Let’s take a comprehensive look at car consignment from a buyer’s perspective to see what you can expect when you purchase a vehicle on consignment, starting with the basics.

Won’t I pay more for a car that’s on consignment?

Obviously, the main goal of a car consignment company is to stay in business. That means that you as a buyer might have the expectation of paying more than you would somewhere else.

But that’s not always the case.

Credit: Mali Maeder

Many sellers simply want a fair price for their car without all the hassle of dealing with auction sites and private listings. As such, car consignment prices are often right in line with typical prices from private sellers.

Still, if you’re waiting for the absolute lowest bargain-basement once-in-a-lifetime price for a car, buying one on consignment probably isn’t the best choice. Feel free to sit there refreshing Craigslist every 15 minutes or customizing your eBay filters on a Saturday night.

Why would I buy a consigned car?

With consignment, what you receive in return will often make up for any difference in price.

The three best reasons to consider a consigned car over a private party seller are:

  • Trust
  • Convenience
  • Perks

Let’s break that down.

Trust

Consigners don’t make money by lying or selling lemons. In fact, car consigners pick and choose which cars they take on consignment. They prefer cars with clean titles, strong maintenance records, and professionally installed modifications if any at all. Jim Bob’s rattle-canned Chevy Blazer is better off on Craigslist.

Any consigner worth their salt knows that if you drive home and notice a bunch of problems that weren’t disclosed earlier, it won’t bode well for them. That’s why honesty is paramount – rarely is any car 100% perfect, and the consigner should disclose not only a car’s strengths but its flaws as well.

Convenience and Perks

Buying a car on consignment means letting someone else do the hard work. Inspecting the car, negotiating with the seller, and coordinating delivery are no longer your concerns. Consigners will often roll out the red carpet with perks like free detailing, free delivery, and coordinated test drives so you feel confident about your purchase.

Credit: Nordic Overdrive

Can car consignment companies be trusted?

Buying a car on consignment is largely the same as any other car purchase.

We won’t lie to you, there are some shady consignment shops out there. Fraudsters and con artists exist in almost every walk of life. Good thing examples like those are the exception, not the norm.

Because they never take ownership of the cars they sell, consigners are invested in a way that typical car dealerships are not. They only make money from a habit of honest transactions where both sides are happy in the end. Anything less will land them negative reviews and possibly even lawsuits, making it almost impossible to stay in business.

Mom and pop shops

The vast majority of consigners are local car enthusiasts who sell a small number of cars every year. They are trusted names within their communities, people who can put you in touch with dozens of satisfied customers at a moment’s notice. In short, they’re your small-town mom-and-pop operation with a lot riding on every sale. Someone like that can’t afford to lie about a car or cheat you out of money. Even if they could, it isn’t in their blood.

National companies

Larger consignment operations tend to specialize in selling nationally and even internationally. Because their cars don’t come from auctions or direct from manufacturers, these companies have a strong incentive to choose only cars of the highest possible caliber. That means requiring clean titles, strong maintenance records, and professional modifications if any at all.

Legally binding agreements

If all else fails, you have the law on your side. Both buyer and seller enter into a legally binding agreement when the sale of a car is finalized. That means you have access to legal recourse if your money goes missing, your car never arrives, or it arrives not as described.

Without further ado, let’s jump into the 5 Steps to Buying a Car on Consignment. For more perspective, check out Car Consignment from a Seller’s Perspective.

Credit: Adrian Dorobantu

1. Find a car

When buying a car on consignment, the first step is to find the car. Duh.

There are a variety of tools and resources for finding consigned cars. Tools like AutoTempest and AutoTrader will display consignment results from across the country; a thorough consignment company will also be posting to sites like Craigslist, eBay, and Facebook Marketplace. Generally, the more places you see a car posted the better.

The most successful consignment companies have built an online following that eagerly awaits every car they post. Some don’t advertise outside their own website, and that’s okay.

Pay close attention to the quality of each listing. Is it well-researched with high-quality photos, or was the description copied and pasted from Ford.com with the dealership’s phone number plastered on every photo? These might seem like minor details, but it all reflects the amount of care the seller takes in every aspect of their business.

Credit: Charles Kettor

2. Shortlist and contact

No less obvious, the second step of buying a car on consignment is to narrow your search results and start contacting sellers.

What's not always obvious is what to say.

It’s best to ask specific pointed questions about the car – the more the better. When buying a car on consignment, ask questions like:

  • What is the maintenance history? Do you have receipts?
  • Does it have a clean title? Are there any liens?
  • Does it have any damage? Does it need any work?
  • Is the price firm?

Here are some more detailed but often overlooked questions you should ask a consigner:

  • How old are the tires? How many miles are on them?
  • Has the car ever sat or been stored away for a long time?
  • Is there a history of repairs, paintwork, or modifications?

If you're dealing with a good car consigner, you won't have to ask many questions at all. That’s because they will volunteer all the important information about the car upfront.

Can I contact the seller directly?

Usually, no. Most car consignments require exclusivity – the consigner doesn’t allow the seller to list their car anywhere else while it’s consigned with them. The seller has entered into a contractual agreement to sell their car only through the consignment company. If you circumvent that process, it's potentially a legal issue.

A generous consigner might put you in direct contact with the seller through a mediated process like a three-way call, but you will rarely if ever be able to contact the seller directly on your own time. Just remember, the seller chose to do things this way for a reason.

Credit: Nordic Overdrive

3. Negotiate the price

As a buyer, the most critical moment comes when you negotiate the final price of the car.

That’s right, negotiate.

We’re all familiar with the great American pastime of lowballing. And while it’s not appropriate to offer a car consignment shop a TV and a Bowflex in trade for a car, most of the time it’s okay to haggle and negotiate to your heart’s content when buying a car on consignment.

Usually a price window has been set beforehand. The consigner will often want to confirm your offer with the seller before accepting it, but other times the seller has given the greenlight to accept any offers within a given range. And if the listing price is firm, the consigner should tell you that upfront.

It can’t all be peaches and rainbows

When buying a consigned car, it’s important to get honest information about the car in question. The seller needs to be straightforward about the flaws – and nearly every car has flaws – and if none exist, you may not be asking the right questions.

Or you may be dealing with the wrong company.

The exception: some car consignors only deal in pristine high-end exotics, but even those can have skipped maintenance and hidden flaws.

Get the details in writing

While it’s fine to ask a million questions rapid-fire on the phone, it’s always a good idea to get the most important info in writing. Get the sales rep’s email address or the dealership’s general inquiry inbox and send a message confirming the details about the car as you understood them.

This is also a good opportunity to affirm your serious interest in the car or even express a written offer if you’re ready to.

Credit: Scosche

4. Transfer the funds

This is one of the most misunderstood aspects of car consignment, so let’s dive right in.

When a car is bought on consignment, payment typically goes into an escrow account so the consigner cannot use the funds for anything else. The consigner will use the money to pay any outstanding loans, deduct any applicable fees, and then transfer payment to the seller.

When buying a consigned car, the transfer of funds and the transfer of title should be done concurrently. As a buyer, if days turn into weeks between the money leaving your hands and receipt of proof of ownership, something isn’t right. There should not be any appreciable time between the two.

Hidden costs and fees

There are some costs you may not have considered when buying a car on consignment.

  • Sales tax. Depending on which state(s) you and the consigner are located in, the consigner may collect the sales tax as part of the sale, or you may need to pay it yourself later on. Either way, you have to pay it.
  • Title fees. You will need to pay to have the title transferred into your name. Again, the process varies from state to state.
  • Other fees. Some car consignors charge additional fees for handling taxes, filing DMV paperwork, and coordinating shipping.

Ideally, none of these fees are “hidden” from you by the consigner. Every company handles things differently, so ask about them if they aren’t mentioned upfront.

Credit: Adrian Dorobantu

5. Arrange shipping and take delivery

If all goes well, delivery of your car will begin soon after payment is made.

Local pickup

Most car consignment companies will roll out the red carpet for their local clientele, offering detailing services and local pickup and delivery at their home facility.

Shipping

While smaller car consignment companies may be unable to, larger operations can generally coordinate shipping on your behalf. All they will need from you is a time and location to deliver your car. The rest will happen behind the scenes.

Inspecting the car upon arrival

When buying a consigned car, the process of taking delivery is critical. Here is our advice on what to do next.

  • Immediately inspect the car for any damage sustained during shipping
  • Make sure the consigner followed through with any expected perks (detailing, etc.)
  • Check the oil and coolant before driving (or have someone check them for you)
  • Get the car inspected by a reputable shop in the near future
  • When you receive the title, confirm that all information is correct

Until this moment, buying a car on consignment involves trusting what the seller tells you. Confirm everything about the car looks as described before you start to pile on the miles.

Stay in contact with the consigner throughout the shipping process and follow up until you have the title in your hands. Hold them accountable if days turn into weeks without any tangible signs of progress.

Credit: Exotic CarTrader

Feeling confident?

In short, buying a car on consignment is an easy process – so long as you’re dealing with the right people. Keep your eyes peeled for signs that the consigner is giving you the run-around. Other than that, it’s not much different from buying a car anywhere else.

You’re already doing a great job by reading up on the topic at hand. To get the full picture of car consignment, be sure to read this related article describing Car Consignment from a Seller’s Perspective.

Ready to buy a car on consignment?

Exotic Car Trader hosts a curated selection of vehicles on consignment and through our interactive marketplace. As a brick-and-mortar company with strong ties to South Florida car culture, we strive to set a high bar while offering some of the lowest consignment fees in the country for rare, collectible, and significant vehicles. If your car would look great among our current inventory, have a look at how our car consignment program can be tailored specifically to your needs.

Image credits: Pexels image gallery

Words by Justin Dake

We are not attorneys. This article does not contain legal advice.