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What Is Car Consignment, Can It Be Trusted, and Is It Worth It?


Whether you’re buying or selling, if you know nothing about car consignment, this is the place to start.

You may have wondered what a consigned car is and how buying one can be different from your usual dealership dance or Craigslist caper. You may be wondering what selling a car on consignment involves and whether it’s a good idea. Whether you’re buying or selling, you might have questions like these:

  • What is car consignment?
  • How does consignment differ from regular buying and selling?
  • Why would anyone consign a car?
  • Can this process be trusted?

Even if you don’t know the first thing about car consignment right now, you will be an expert by the end of this article or it’s free. Wait, you’re saying it’s already free? Then I guess you have nothing to lose.

What is car consignment, anyway?

Car consignment involves using a consignment company as a middleman between the seller and potential buyers. The seller pays consignment fees to the company, and in return the entire sale is handled by the company on the seller’s behalf. Everything from creating effective listings to handling tedious negotiations – and dealing with tire kickers and scammers – is done without bothering the seller. Nice and easy.

But there’s more. The consigner accepts the buyer’s payment and delivers it to the seller, usually keeping the monies in an escrow account between those steps. This is generally viewed as a safer alternative to accepting a stranger’s cheque in a Wal-Mart parking lot and hoping it won’t bounce.

Some consignment companies will handle the title transfer and all the DMV paperwork as well, ensuring everything is filled out correctly. Some will even play a part in delivering the car and might even give it some detailing along the way.

In short, consignment allows people to sell their cars without the typical hassle and headaches of doing it themselves.

Credit: Pixabay

What’s so hard about selling a car yourself?

It all comes down to trust.

If you’re selling a car on consignment and someone tries to scam the consignment company over your car, chances are you’ll never even hear about it. If a buyer bails out at the last second, you won’t hear about it either.

The goal is to take as much work off the seller’s plate as possible. Car consignment:

  • Saves time. Posting ads, answering calls and emails, and dealing with tire kickers and time wasters… it all adds up fast.
  • Eases stress. No more rearranging your schedule in the hopes that a potential buyer won’t flake at the last second.
  • Expands your reach. It’s hard to ship a car across the country as a private seller. Not to mention, how do you know that’s not a scam?

When you sell through a good consignment company, their expertise allows them to find the right market for your car and advertise it perfectly to reach the ideal buyer. That means you’ll get the best price in the shortest possible time.

Why would I pay someone else to sell my car?

In an ideal situation, car consignment will actually save you money. Not only does it open your schedule during all those hours you would usually spend selling your car, but since consignment companies are experts at crafting effective listings and posting them in the right places, the resulting buyer is often willing to pay more than local buyers or Craigslist low-ballers.

The frugal among us will be happy to know that consignment fees are usually based on a percentage of the car’s final sale price. Unless you’re selling a rare, exotic, or wildly expensive car, the fees won’t amount to all that much – and they’re largely offset by the hours you save and the higher sale price you achieve. Additional perks like detailing services and high-quality listings with professional photography also help tilt the scales of value in your favor.

Consignment isn’t just for fancy collector car auctions, either. In fact, the cheaper the car the less you’ll pay in consignment fees.

Learn more about selling consigned cars with our Seller's Guide to Car Consignment.

Credit: Avinash Patel

Why would I buy a consigned car? Won’t I overpay?

It’s no secret that consignment companies want to sell high – it’s how they make money and keep sellers happy. But nobody in their right mind would overpay for a car in the 21st century. There’s way too much selection to choose from.

What is acceptable is paying a fair amount for the right car. A car with the options and extras you’re looking for. A car in the right color, with the right interior, with the right mileage and the right maintenance records. A car that speaks to you. It might not be the cheapest one of its kind, but it’s the one you’ve been looking for all along.

More pragmatically, consignment companies only make money by moving cars. Average consignment prices are no higher than private listing prices on a model-to-model basis – after all, it’s more about what you’re buying than who you’re buying it from.

Learn more about buying consigned cars with our Buyer’s Guide to Car Consignment.

How do I know a consignment company is legitimate?

Whether you’re buying or selling a consigned car, you need to be able to trust the company you’re working with. You trust the consigner to:

  • Be honest about the car’s condition, including its flaws
  • Be upfront about fees and time expectations
  • Actually deliver the payment, the title, and the car as promised

Since car consignment companies never purchase their cars outright, they are obligated to act as the best possible middlemen between buyers and sellers. This two-way commitment means consigners can only stay in business by being honest and transparent with everyone involved.

If you’re concerned about their legitimacy, you can research the company’s prior sales, legal filings, and business records to make sure you aren’t dealing with a fly-by-night operation. Thankfully, car consignment scammers don’t last very long – a couple well-aimed lawsuits or even a flood of negative reviews will shut a business down faster than a landslide stops traffic on Highway 1.

Learn more by reading 4 Telltale Signs of an Honest Car Listing and 4 Signs That You Can Trust a Car Consignment Company.

Credit: Simon Clayton

How do I know a consigned car is dependable?

You want to trust this car you’re buying, right? You want to drive it all around the world, take your future soul mate on your first date in it, and pass it on to your children in a couple decades as one of your most prized possessions. Or maybe it’s just for getting groceries and you’ll sell it in six months. To each their own.

Car consignment has more moving parts than a regular car sale, resulting in what I call the Consignment Circle of Trust. In this circle, each party needs to be honest with the next.

The seller knows the facts --> The consigner learns the facts --> The buyer trusts the facts

Buyers should practice the same level of discretion when communicating with a car consignment company as they would with a used car dealership or a private seller. Ask as many questions as necessary – not just about the car, but the company as well – until you can trust that sufficient scrutiny was applied when the consigner accepted the car in the first place.

Negative reviews can sink ships and lawsuits are nightmares, so consigned cars are vetted for safety and legitimacy long before being listed. This means that consigned cars are vetted twice before being sold: once by the consigner and once by you.

The best car consignment companies won’t knowingly risk their reputation just to make a quick buck. They want you to be smiling in the driver’s seat just as much as you do.

Credit: Nick Wehrli

Feeling confident about car consignment?

It’s not a wild concept – pay someone else to do the legwork while you lay back and relax.

Consignment works well from both sides. As a buyer, car consignment means you can trust that the car you’re buying has been vetted by someone who has a vested interest in making you happy. As a seller, instead of losing hours to typing ads and getting flaked on, maybe it’s worth a few bucks to spend that time doing something you love.

At Exotic Car Trader, what we love is right in our name. We offer a curated consignment inventory of high-end, exotic, and collectible vehicles. Our media-rich listings provide a transparent view of every car we sell. We’re a brick-and-mortar company with strong ties to South Florida car culture, and our consignment fees are more Honda Pilot than Pagani Huayra.

If you’re in the market for a high-end vehicle, take a stroll through our current inventory.

If you’re looking to sell, consider our car consignment program tailored specifically to your needs.

Additional reading:

How Car Consignment Works as a Buyer | How Car Consignment Works as a Seller

Cover image credit: Jose Mueses

Words by Justin Dake

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


Exotic Car Trader is the fastest growing marketplace built specifically for automotive enthusiasts. Click below to learn how you can sell your car with us.