Has anyone had the selling dealer offer to sell their trade on consignment rather than trade it in? I gave my dealer my car over a month ago and was told the full sale price , if sold, would be applied to my new car. Has anyone done this? It seems strange there was no fee of any kind mentioned. I would think the selling dealer would prefer to pay me a low trade in value and then mark it up once they own the car rather than simply sell the car for me and essentially give me the full sale price.

 

If the dealer purchased the car form you then the dealer has money tied up in inventory. By doing a consignment for you, the dealer is actualy benefiting in two different ways.

1. A feeling of good will in the customer dealer relationship. This is priceless.

2. Additional inventory that the dealer does not have to pay for. Yes, it is true the dealer does not make any money on the sale, but the dealer can make money on the service of the vehicle by the new owner. The dealer may also benefit from a person coming in that was attracted to your car, but could possibly purchase another car (or the other way around).

By not having money tied up in another automobile, the pressure is off of the dealer to HAVE to move it. It all boils down to the floor plan / financing of the dealers inventory.

Bottom line, it is nice of the dealer to offer this service to you, but you might want to make sure and find out what the liability is on having you vehicle at the dealership on consignment if any dammage occurs.

 

Are you sure they are going to credit you the full sale price they sell it for or a number they told you they will give you? My experience is that the dealer will usually charge 3-5% of the sale price for consigning it. They have to pay the used car salesman a commission.

 

I've never seen consignment as a favor, in fact, quite the opposite. It usually means the dealer isn't willing to take the risk of taking your car on trade, leaving you holding the bag when your new car comes in. Dealers usually do consignment when they lack the confidence that they can readily sell your car. And, I've never seen a dealer give you 100%, it's usually somewhere between 3-10% that they keep for the cost of selling your car.

Exotics are often taken only on consignment because of their high price, and small numbers of buyers. My local Porsche dealer wouldn't take my Ferrari F430, or my Audi R8 on trade, only consignment. A close friend of mine recently was told they wouldn't take his 2012 Cayenne Turbo on trade, only consignment.

If you can get it to sell on consignment, and the commission is low, then it is a good deal. But in my experience, dealers seldom do customers "favors" that cost them money, and I say that having a pretty pro-dealer bias, having had mostly good experiences with dealers. I am however, under no illusions.

The best deal, of course, is to sell it yourself. Keep all the money, and sell at at a good price.

 

If you sell it on consignment do you not get the tax benefit? That could be 6-8% of the delta.

ChuckJ

 

I've sold three porsches on consignment with 2.5% comm. they displayed them well, and they sold quickly. It's a better way to go than a trade. I enjoyed the higher return all three times

 

I was looking at a local dealer of high-end cars to do a consignment for an R8, and their commission rate was much higher than I expected, over 7%! When I asked why, they said that it is a big headache for them, and in the end, they really do not make any money on it (other than the commission). You are better off selling it with a listing agency that will to the promoting for you than having it parked in a showroom.