Selling a vehicle can easily turn into a full-time second job. Between all the photos, inspections, answering questions, and having to meet with buyers when you’d rather be out with friends, you need a better solution.
For many sellers, having to deal with all those extra steps is why dealership sales look so attractive, but there are other methods. Dealer consignment offers a way to hire a licensed dealer to market and sell your car on your behalf, for a small fee. You avoid the hassles and get closer to the often higher pricing in private car sales.
Selling a vehicle on consignment is not designed for everyone, so you want to learn a little before you agree to any terms, modifications, or fixed fees.
What Is Dealer Consignment and Who Is It Best For?
How to consign your car to a licensed dealer is an agreement. It’s a contract between you and the dealer who will do the marketing, car show appointments, negotiations, and actual sales process. In exchange, that licensed dealer will take a commission, usually 5% to 10% of the sales price or a fixed flat fee.
When you go with dealer consignment, they handle all the details to sell the car, such as:
- Professional photography
- Online listings
- Test drives
- Buyer financing
- Negotiations
- Title paperwork
- Final sale
For some sellers, the paperwork alone is more than worth any commission. It’s why many collectors or owners of classic, exotic, luxury, and performance cars go this sales route. You just have to balance the commission fee against the potential sale.
A Honda sedan from Michigan with over 180,000 miles on it may not sell for enough to cover that fee. A well-maintained American muscle car probably will.
Comparing Car Selling Methods
Method | Average Sale Time | Potential Profit | Level of Personal Effort | Best Suited For |
|---|---|---|---|---|
Dealer Consignment | 30–90 days | High (closer to retail value, minus dealer commission) | Low | Classic, exotic, luxury, collector, and specialty vehicles |
Private Sale | 2–8 weeks | Highest potential profit | High | Well-maintained everyday vehicles with strong local demand and owners willing to handle the sale |
Dealer Trade-In | Same day | Lowest (wholesale trade-in value) | Very Low | Buyers who prioritize speed, convenience, and purchasing another vehicle immediately |
Keep in mind your exact experience may vary based on the time of year, type of car you’re selling, and market demand in your local area.
How to Consign Your Car
Actually selling a vehicle on consignment takes a little bit of work, most of which is finding a quality, licensed dealer you can trust. What is consignment car sales processes involve:
- Trusted Dealer: A properly licensed dealer with positive online reviews from previous sales and clients who have direct experience with the vehicle you want to sell, and a transparent commission and marketing strategy.
- Vehicle Inspection: Your car is inspected by the dealer or their mechanic, checking the appearance, condition, history, modifications, and market demand of the car in question. Some may recommend making minor repairs before listing in the same way a realtor would suggest fixing a busted faucet for higher returns on a house sale.
- Documentation: You’ll want to provide service records, extra keys, owner’s manuals, warranty paperwork, and any receipts for repairs if possible.
- Pricing Agreement: Discuss the value of your car using KBB or a related tool, then land on a retail asking price, the minimum amount you’ll accept, the clear dealer commission, and any preparation or marketing costs.
That’s really it. Once you have these details arranged, the licensed dealer handles all the other factors. They arrange live, in-person showings and deal with paperwork while you collect your profits and move on to buying another new car or investing in a second vacation property in Florida.
What Happens After You Sign the Agreement?
Always take the time to review the agreement before signing. You want to ensure there aren’t hidden storage fees or a listing duration that you didn’t discuss in person. This is a legally binding contract, so you want all the details to match whatever you discussed. If they don’t, you can always walk away.
Once you sign, you’ll leave your vehicle in the care of the licensed dealer, along with any paperwork. From that point on, the dealership is responsible for marketing and selling your car. It’s actually pretty funny to see an ad for your car on your own social media feed, but that does happen.
Advantages and Drawbacks of Selling a Vehicle on Consignment
Advantages
- You’ll likely get a higher selling price because both the dealer and your agreement are motivated by profit-maximizing above retail pricing compared to a traditional trade-in.
- The dealer handles marketing, which tends to be much more thorough and aligned with target buyers than what you would do in an average listing.
- You don’t have to do anywhere near as much work as you would selling the car privately on your own.
- Buyers feel more comfortable purchasing from a licensed dealer with a long online history than a private seller without that history.
Potential Drawbacks
- The dealership does take a fee, and that commission can be high, so double-check before agreeing to any contract.
- You’ll have limited control over negotiations, marketing, and buyer interactions.
- How to consign your car is not always a good fit for economy or higher-mileage vehicles.
When Transportation Becomes Part of the Sale
Another way to help your licensed dealer “sweeten the deal” with dealer consignment is to arrange car shipping through a trusted and experienced auto transport company. Using Nexus Auto Transport, or including a link in the listing to get a free online car shipping quote, adds both trust and convenience to the marketing.
Nexus has over 500,000 successful deliveries across the nation, often with door-to-door shipping. Everyone from a young family relocating due to work to a prestigious auction house selling a collection of luxury cars uses this service.
Be sure to mention how Nexus has enclosed auto delivery to protect an investment if you’re selling a classic or exotic car on dealer consignments. That will put many buyers at ease and may be the tipping point to getting your full value asking price.
Is Dealer Consignment the Right Choice?
Selling a vehicle on consignment is a math equation. You’re balancing the commission the licensed dealer will get on the sale against the potential sales price you’ll get. For higher-value vehicles like a Porsche or custom RV designed for hybrid workers who love to travel, you’ll save time and hassle from doing the sale on your own.
Take your time to examine the dealer consignment agreement before signing. Confirm all the details match your conversations, and you’ll be surprised at how easy this process can be, especially when you want a bit more anonymity in financial deals.
FAQs
Is car consignment safe for luxury and high-value vehicles?
Yes. As long as you’re working with an experienced and licensed dealer who understands the exact make, model, and trim of your vehicle, you’re in good hands.
Who is responsible for vehicle insurance while the car is on the consignment lot?
The licensed dealer likely has insurance, but your private insurance is also good to keep on, just in case. Always ask your provider if they cover storage insurance for your car.
Can I sell a car on consignment if there is still an active lien or loan on it?
You can, but most licensed dealers won’t want the hassle and will ask you to pay off the loan first. It depends a lot on the prospective selling price of your car. If you have something extremely valuable, that extra hassle is worth the effort.
What happens if the consigned vehicle does not sell within the agreed timeframe?
The car is then returned to you. Most dealer consignment agreements have timelines. That motivates the dealer and ensures they have a lot only full of high-value vehicles.
