Car Consignment: Paradise by the Dashboard Light
May 01, 2017 08:30AM
By Jason Huddle
Car Consignment: Paradise by the Dashboard Light
“MONEY MAY NOT BUY HAPPINESS, BUT IT’S BETTER TO CRY IN A LAMBORGHINI.”
Most of us have patronized consignment shops looking for a great buy on used clothing or housewares. And those who haven’t at least understand the concept. But imagine buying or selling a collectible car on consignment. Twenty years ago, some used car dealers took cars on consignment, even delegating a portion of their lot for these vehicles. While the sale didn’t net as much profit as a conventional trade-in, the dealer might have charged an up-front fee, adding to the money made while also helping out the seller. Additionally, it usually added some automotive bling to his lot that he hadn’t had to pay for.
Then, in 1999, Simon Rothman founded eBay Motors, earning the position of global vice-president. “By 2006, Rothman built eBay Motors into a company earning $14 billion per year, which accounted for about 33 percent of eBay’s total revenue,” according to reference.com.
Today, jobs, family and any number of other obligations prevent some from attempting to sell their vehicle themselves. Marketing takes the form of posting an ad on Auto Trader, facebook or Craigslist, then arranging to meet the prospective buyer, negotiating the price, etc., and some just aren’t comfortable with the whole process. Plus, Craigslist has taken a hit with the not so up-and-up taking advantage of those wanting to legitimately deal. Add to that, you can’t provide financing to the buyer seeing the For Sale sign on your car parked in the front yard.
While these methods are certainly successful for some, car consignment is a growing trend that now includes collectible vehicles: rare, hard-to-find, gotta-have-it, expensive cars. They’re being shipped worldwide to collectors and car enthusiasts willing to spend a little cash. Rick Hendrick owner of Hendrick Motorsports, is one (see sidebar).
A company that would likely happily do business with him is Streetside Classics, located on Derita
Road in Concord. Officially called the Charlotte location, it was the first for Streetside and is the largest. Since 2005, showrooms have opened in Atlanta, Dallas/Ft. Worth, Nashville and Tampa; Donna Robbins is president and CEO.
“I’ve been in the classic car industry since 1999,” Robbins says. “Prior to Streetside Classics, I owned another classic car dealership, and prior to that I was in the corporate world with companies such as Frito Lay in Plano, TX. Today, Streetside is at five locations across the country and we have plans to add even more locations in the future.”
In 2016, Streetside Classics’ five locations sold more than 1,800 vehicles, earning $51 million. And the company typically showcases 1,200-plus vehicles total.
“Classic car consignment has been around quite a while, but it was mostly dominated by auction companies until the advent of the Internet in the late 1990s and early 2000s. For sure, the Internet and online marketing changed the game and have allowed business models like mine to take off. Without the Internet, our business model would either not exist or be on a much smaller scale,” Robbins says.
There are important steps in forming a partnership with a car consignment company before your vehicle is even put on the market. They include:
• Appraising Your Car’s Value – This is determined using the mileage, the car’s condition, history, etc. The determined market value is what the consignment company hopes to sell your vehicle for.
• Marketing Your Vehicle – Consignment professionals should have a website and showcase the cars they sell in a secure, attractive setting. They may also take advantage of sites like autotrader.com, cars.com and, yes, Craigslist.
• Pricing – Consignment companies may allow the seller to decide upon the final price or it may have its own pricing guidelines. It may also keep a percentage of the selling price – typically between 10 and 20 percent, charge a one-time fee or both.
• The Sale – Consignment companies may handle the prospective buyers, test drives, negotiations, payment and paperwork or parts thereof. Some permit buyer/seller contact, but most prefer an anonymous transaction.
In Streetside Classics’ case, a seller provides details/history about the vehicle he or she wants to sell. Streetside will perform an evaluation of the vehicle based on today’s market conditions, then arrange to bring it in to its showroom. There, staff inspects the car to make sure all information provided is accurate.
Along with the vehicle itself, the title or application for title is required, and in the name of the person consigning the car; the driver’s license for each owner listed on the title; and information as to what work has been done on the car. The Vehicle Identification Number (VIN) must be legible on the vehicle and match the title.
At the end of the day, if both parties come to terms, a consignment agreement is signed. Photos, videos and a detailed description are created for marketing purposes with detailing packages available. Besides its own website, Streetside utilizes more than 40 collector car websites and publications to showcase the vehicle.
As to how long it typically takes for a car to sell, Robbins says, “It really depends on the vehicle and current market conditions. That said, we sell some of the vehicles within a couple days or, in some cases, even hours! Indeed, we’ve sold quite a few vehicles over the years on the same day the customer has dropped them off. But, overall, we sell most of the cars within a 45- to 60-day period. Our initial consignment term is for a minimum of 90 days; however, we will keep the vehicle longer as long as we feel the customer is working with us on the price and interest from buyers is present.
“We get the consignor their full desired price and we keep everything over that as commission. We’ve had the same structure for over 12 years now and both buyer and sellers love it,” she adds. That means there is no up-front consignment fee or monthly fee.
With a typical 15 percent inventory turnover monthly at Streetside’s Concord location, many of these vehicles are purchased by collectors, whether they buy and sell regularly or are looking for a
permanent addition to their personal collection. The Concord showroom houses an average of 250 vehicles. So, what are buyers looking for in 2017?
“We’ve recently sold some Ford GTs in the $300,000 range, and they are proving to be a great investment for clients even though they’re not technically a ‘classic,’” Robbins shares. “On the rarity side, we’ve had many one-off Cudas and Challengers, Shelby Mustangs and Corvettes. Right now our Charlotte showroom has an extremely rare 1970 Mustang Convertible with the Q-Code 428CJ engine, and it’s one of only five ever produced!”
Wikipedia defines a one-off as an “individually-designed automobile, usually created for a single individual or organization.”
The safety and convenience of car consignment can work in the buyer’s favor as well. Vehicle financing may be offered, as well as an aftermarket warranty and shipping. Add to that, the thrill of owning the car of their dreams.
“On the buyer side, we’ve sold to many active military members over the years, but one in particular stands out. During the most recent Iraq war, a soldier’s wife purchased a Chevrolet Chevelle for him and we did a video of her taking delivery of the car and sent it to him in Iraq,” Robbins says. “To see the soldier’s excitement, and give him even more motivation to come back to the U.S.A. safely (which he did), was awesome! Over the years, we’ve learned this business isn’t so much about the cars, it’s about the people who own them.”
Visit the company’s website – streetsideclassics.com – for more information and a photo gallery of current inventory.
Story by: Kim Cassell
Photos Courtesy: Hendricks Performance, Streetside Classics and Autobarn