Imagine not having to answer the phone when a Craigslist tire-kicker calls at 2:00 AM on a Saturday, just for them to fizzle out the moment you talk about the small dent on the passenger’s door that you already mentioned in the ad.
Imagine letting someone else sell your car. Imagine them selling it quickly and for top dollar, so that the money you pay them for their services will be offset by money made and time saved.
That’s what selling a car on consignment is all about. And while the name might make the process sound complicated, consigning your car is actually very easy.
Consigning your car means letting someone else (a consignment company aka a consigner) sell your car for you. You pay them a nominal fee and they handle every aspect of the sale on your behalf. Listing, selling, shipping. Bam, boom, done.
The three main principles of selling a car on consignment are:
Since you didn’t have to spend countless hours advertising your car and talking to professional tire kickers and “can I trade you a TV” wannabees, you would consign your car hoping to come out ahead in the end.
So, what’s the catch?
They have to make money somehow
Car consigners make money by charging you consignment fees based on the sale price. Ideally, the amount you receive in the end is greater than or equal to what you could’ve gotten on your own, especially once you factor in all the time you saved.
All consigners are not created equal
Of course, it doesn’t always work out in your favor. Bad consigners will drop the ball, wasting your time and giving you less in return. A good consigner will go the extra mile by coordinating things like viewings, test drives, and shipping on your behalf. They might even detail your car.
Let’s walk through the Five Steps to Selling Your Car on Consignment and explore some of the differences between a good consigner and a bad one. For more perspective, read about Car Consignment from a Buyer’s Perspective.
The first step to selling your car on consignment is letting the consigner get familiar with your car. Not in a weird way.
A good consigner will know your car better than you do. They will research not just basic things like engine size and horsepower, but also that the proper name for the color on that Mini is Nightfire Red and the white roof was an optional extra. These details allow consigners to promote your car’s strengths and personality during the selling stage.
Any serious buyer will have a lot of questions before they spend money on a car, especially one they have never seen in person. To prepare for that, a consigner might talk to you on the phone or email you a questionnaire to complete. Common questions include:
They will also request documents like maintenance receipts, a window sticker, or receipts for and photos of modifications. It might seem like a lot of work, but the more they know about your car the better they can sell it. And of course, a consigner that cares will do additional research on their own time.
Your car’s strengths are what make it unique – its condition, modifications, rare options, or anything else that makes it special. But things like rust, damage, and skipped or required maintenance need to be admitted to the consigner upfront. That way the buyer knows what they’re getting into. It’s legal, it’s right, and it’s just to be honest about your car’s shortcomings.
Discuss whether your car had previous modifications or was stored for a long period of time.
TLDR: A good consignment company will get to know your car thoroughly. A neglectful one won’t.
When selling a car on consignment, you decide your car’s selling price. Not the consigner, not a book value. You.
The ideal price will reflect your car’s strengths while also accepting its weaknesses. It needs to have two qualities:
A seasoned consigner will offer insight and experience to help you reach a good number. And in keeping with the American pastime of negotiation, car consigners will often list your car for more than you expect to sell it for. But the final price – whether it’s a range or an exact figure – should be left up to you.
Of course, car consignment companies have an incentive to sell your car fast, well, and at a high price. That’s because of…
Consigning your car means paying consignment fees, a payment to the consigner for the time and effort spent selling your car. Typical car consignment fees range from $250 to $1,000, while some companies charge based on a percentage basis – usually 5% to 15% of the final sale price. You might not notice that percentage difference when you’re selling a Camry, but you will on a Porsche as this chart illustrates.
Some companies charge fees based on what you’re selling, with higher rates on cars that are rare, expensive, or just plain hard to sell.
And while this might seem like wasted money – after all, you could just sell your car yourself – remember all the time and effort the consigner puts into making the sale happen. Time is money, and yours is probably better spent somewhere else.
TLDR: A good car consigner will offer guidance to help you set a fair price. A bad one will tell you the price – and gouge you on fees to boot.
When you sell a car on consignment, it’s safe to assume that you expect someone to buy it. But unlike typical car sales where you’re stuck spending hours creating a snazzy eBay listing or the next viral Craigslist ad, car consignment means that it’s up to the consignment company to market and advertise your vehicle.
The consigner’s goal is to find the right buyer for your car – the one that will get you both the most money, not the first person who calls and makes a lowball offer. The more effort a company puts into finding the right buyer, the better your chances of selling your car at the price you want (and the buyer will be happier, too).
Of course, this all needs to happen pretty fast. You’re not trying to sell your car next year, after all.
Most automotive consignment companies will handle all the marketing for you, posting on classifieds sites like eBay, Craigslist, and Facebook Marketplace and boosting visibility on catch-all sites like AutoTempest and AutoTrader.
Because of this, car consigners usually require exclusivity – meaning you can’t list your car anywhere else while you are consigned with them. That’s good if the consigner puts a high degree of effort into creating detailed ads for your vehicle, but it’s bad if they spit out an eBay listing that fell straight out of 1998.
No. The consigner will not distribute your personal information to potential buyers. Consignment buyers understand the agreement between you and the company and will not contact you directly. Generally speaking, circumventing the consigner means breaking the contract.
A generous consigner might put you in direct contact with the seller through a mediated process like a three-way call, but direct contact between buyer and seller is extremely rare in car consignment.
But what if the ideal buyer is 2,000 miles away?
Let’s say you’re in Florida and there is high demand for your car in Missouri. How do you reach buyers halfway across the country?
While some car consigners prefer to work locally, most can sell across state lines and even internationally. Good consigners are experienced at finding those places where your car is the most desirable. Some can even coordinate shipping on your behalf. And in the Internet Age, the world’s best car consignment companies have built an online audience that comes to them.
TLDR: A good car consigner will assume the role of your personal marketing team, looking far and wide for the ideal buyer. A bad one won’t.
This is the most important aspect of selling a car on consignment, the point where a good consigner will shine and a bad one will drop the ball.
The most important job of a car consigner is not selling, it's building trust. Find a consigner who is honest and transparent about the cars they sell – one you can trust to follow through on their promises.
When it’s time to sell your car, consignment companies handle everything for you. That includes all the upfront stuff like answering the phone, responding to emails, and providing potential buyers with enough details to feel confident about buying your car – even sight unseen. It also means dealing with that Craigslist tire-kicker from earlier. And the next one. And the next.
It also includes handling the nitty-gritty dirty work, like transferring the title and filling out DMV paperwork. They have to be responsible enough to do all these things in a short timeframe. And it goes without saying, they have to be trustworthy enough to pay you and deliver the car to the buyer when it’s all said and done.
Trust also comes from perks. Some consigners will coordinate shipping on your behalf. Some will offer to send a photographer to your location. If you’re local, they might sweeten the deal even more by arranging viewings, test drives, and detailing services on your behalf. Going the extra mile proves the consigner is invested in you.
TLDR: A good car consigner is trustworthy and honest with a strong reputation. A bad one… isn’t.
This is the least understood aspect of selling a car on consignment, so let’s break it down.
When selling a car on consignment, the seller keeps the title until the car is sold. The buyer’s payment is typically kept in an escrow account and used to pay any existing loans and applicable consignment fees before being transferred to the seller.
It is critical that the transfer of funds and the transfer of title happen concurrently. As a seller, if days turn into weeks between the title leaving your hands and receipt of funds, something isn’t right. There should not be any appreciable time between the two.
Most consigners will handle the title paperwork for you – just send the title to them and they will handle the rest.
Typically, the only fee charged to the seller of a consigned car is the consignment fee. The buyer is responsible for taxes and titling fees plus any administrative fees charged by the consignment company.
TLDR: When selling a car on consignment, each company is different. Make sure your questions are answered before you commit.
To get the full picture on car consignment, be sure to read this related article covering Car Consignment from a Buyer’s Perspective.
Now that you know how car consignment works and the difference between a good consignment company and a bad one, I’d like to tell you a little about what we do.
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 in 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.