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Is Selling a Car on Consignment a Good Idea?


It’s way better than getting tire-kicked in a Wal-Mart parking lot, that’s for sure.

Just about anything can be outsourced these days. Much like ordering a custom delivery of a McDonald’s sandwich and Burger King fries, there are ways to sell your car without ever leaving your house. But while you could just cut out the middleman by driving to those restaurants yourself without spending much time or money, selling a car can cost you many hours and expose you to scam risks that change all the time.

Car consignment lets you pay someone else to do the legwork of selling your car. Why would you pay someone else when you could just sell your car yourself and keep all the money? I suppose a better question is, how much is your time worth?

Designed with ease and convenience in mind, car consignment:

  • Saves time. Listings are written for you, calls are answered on your behalf, and flaky buyers are dealt with expeditiously. Some consigners can even arrange shipping and detail your car before it arrives.
  • Keeps you safe. No more meeting strangers in dimly lit parking lots. If someone tries to scam a consignment company out of your car, chances are you won’t even know about it.
  • Ups your odds. Shipping a car is a complex process filled with additional risks, but since car consigners have been there and done that, they can advertise your car wherever the best buyers are found.

Of course, all those reasons are useless without something to compare them to. Let’s weigh the benefits of car consignment against other common ways of selling a car, then we’ll discuss the true costs of car consignment. We’ll end with ways that consigning your car can not only save you time, it might even make you more money than any other option.

Compare the most popular ways to sell a car

Selling to a car dealership is a good option if you’re trading it toward another car in their inventory. Dealers will often buy your car without a trade-in, but while this might be the quickest way to offload a car, selling your car to a dealership is almost guaranteed to get you far less money than any other method. Online services like Carvana fall into this category as well.

Selling to a private buyer usually involves exchanging cash with a stranger in a parking lot. While there’s no middleman to take any of your profits, the risks of getting scammed or having your time wasted are substantially higher than any other method.

Auctioning your car in person or online can be a lucrative option for rare, desirable, or classic cars. However, you can easily fall to the mercy of luck: only the people who happen to see the auction while it’s live will be contending to buy your car. And while your profits are uncertain, auction fees are guaranteed to eat into them.

Consigning your car also involves a middleman, but that person handles every aspect of the sale on your behalf while taking only a small amount of the profit. You set your own price and make the final call on any offers received. Between all the time saved and the higher price paid by an ideal buyer, you stand a good chance of coming out ahead of the other options.

In short, consignment puts more money in your pocket than selling to a dealership, takes less time than selling to a private party, and gives you more control than selling at auction.

Read more about the pros and cons of the most popular ways to sell a car.

The benefits of car consignment

Selling your car on consignment combines the trust and security of selling through a business with the ability to net as much profit as you would from a private buyer. It’s more convenient, too: once you’ve done the research to find a good company to work with, you’re all set. Your total time invested will rarely be more than having your tires kicked by a dead-end buyer in a Wal-Mart parking lot.

Stress evaporates

Your schedule is suddenly open during all those hours you would have spent writing listings, talking to buyers, and sifting through tire kickers. Since car consigners are versed at posting well-written listings in all the right places, it’s quicker and easier for them to find an ideal buyer who is willing to pay more for your car than the average Craigslist lowballer.

Shipping is simplified

The best car consignment companies are experienced at shipping cars across the country and even internationally. That process can be daunting if you’re flying solo, not to mention the constant uncertainty of how and when the buyer will pay you. Consigners have done it all before, so the dream of selling your car to someone a thousand miles away now becomes a strong possibility.

Payment is secure

Speaking of wondering how you’ll get paid, ever have someone offer you a cashier’s check for your car? We’ve all been lowballed, but has someone ever offered to trade you a TV or a boomstick instead of just giving you cash? You won’t have to deal with these people when you sell a car on consignment. You choose which offers to accept, and the consigner will verify payment before you hand over the keys.

Trust is reciprocal

Since you retain ownership of your car until the moment it sells, a consigner’s only chance to make money is by keeping everyone happy. They are compelled to market your car honestly and transparently, ensuring the buyer knows exactly what they’re getting into. They must also be upfront with you about their fees and requirements. If they don’t do keep the trust flowing, they don’t make any money.

Learn more about Choosing the Best Car Consignment Company for your needs.

The cost of selling a car on consignment

You can expect to pay three different kinds of fees after the sale of your car is finalized:

  • State and federal fees
  • Consignment fees
  • Administrative fees

You will owe state and federal fees regardless of how your car is sold, including title transfer fees and state and local sales taxes when applicable. Some companies charge consignment fees at a fixed rate, like “$1,000 to sell your car,” but most companies calculate their fees as a percentage of your car’s final sale price. This usually includes any administrative fees taken by the consigner, though some companies will list those separately.

Car consignment fees are assessed at either a fixed rate or, more commonly, a percentage rate based on the car’s final sale price. In order to maintain the circle of trust we talked about earlier, the consigner needs to be upfront about their fee structure. When selling your car on consignment, ask the company to explain their fees in detail before making any commitments to selling with them.

Fixed rate car consignment fees range from $750 to $3,000 per car. Percentage fees range from 5% to 15% of the car’s final sale price. The higher ends of those ranges tend to be for rare and collectible cars.

Here’s How Car Consignment Fees Work in even greater detail.

Is car consignment cheaper than the alternatives?

In many cases, yes. The best car consigners are skilled salespeople and experienced marketers. Those that can arrange shipping and delivery can advertise your car anywhere, increasing the chances of finding a buyer who would pay more than someone in your local area. Once you consider how much time the consignment process saves you, it’s even easier to come out ahead if your time is worth money.

How long does car consignment take?

It’s not uncommon to rearrange your schedule around a buyer only for them to back out at the last moment. Anyone who has sold a car has wasted time on calls and messages with people who aren’t willing to pay anywhere near your lowest asking price. It’s a cycle as old as cars themselves – thankfully, selling your car on consignment means letting someone else deal with all those hassles so you don’t have to.

You might spend a few hours choosing the right car consignment company and telling them about your car, but then you’re done except for a ten-minute phone call when your car sells.

Is car consignment right for you?

Instead of spending hours listing your car locally, hours more answering calls and messages from buyers who flake out, and even more time wondering if that buyer in another state is a scammer or not, why not let someone else do it all on your behalf?

Consignment offers:

  • the speed of selling your car to a dealership
  • the profits of selling to a private party
  • more reach than selling at auction

Any decent car consigner will offer you high-quality listings, expert marketing strategies, and the security and peace of mind of selling your car through an established business. The best consigners will offer extra perks like professional photography and shipping arrangements, and some will even detail your car and arrange test drives on your behalf if they have access to your car. When you consider all the time and effort these measures save you, selling your car on consignment can be a great option in many situations.

If you’re considering selling your car on consignment, the most important step you can take is finding the right company, one that you can trust. t’s also important to know what fair and reasonable consignment fees look like. If you have any questions about consignment, leave us a comment below and we’ll be glad to help.

About Exotic Car Trader

Exotic Car Trader offers a curated selection of high-end, collectible, and noteworthy cars. Our media-rich listings provide an immersive look into every car we sell. As a brick-and-mortar company with strong ties to South Florida car culture, we strive to set a high bar of transparency every step of the way. If your car would look right at home with our current inventory, have a look at how our car consignment program can be tailored specifically to your needs.

More articles:

The Complete Guide to Selling a Car on Consignment

4 Signs That You Can Trust a Car Consignment Company

Car Consignment Fees Explained

All image credits: Dmitry Zvolskiy

Words by Justin Dake

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


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