How to Buy a Classic or Exotic Car from Gateway Classic Cars
If you are looking for a classic, exotic, rare, or unique car or truck, you might have come across Gateway Classic Cars, a company that claims to be the “World’s Largest Classic and Exotic Car Sales Company.” They have 18 showrooms nationwide and a large inventory of consigned vehicles for sale on their website and on various third-party websites.
Buying a car from Gateway Classic Cars can be a daunting process, especially if you are not familiar with their policies and practices. In this blog post, we will guide you through the steps of buying a car from them and provide you with some tips and warnings to help you avoid potential pitfalls and problems.
STEP 1: Find a Vehicle that Interests You
You can browse Gateway Classic Cars’ inventory on their website, where you can filter by make, model, year, price, location, and other criteria. You can also find their cars on other websites such as eBay, Autotrader Classics, Hemmings, CarsForSale.COM, Autabuy, Craigslist, Facebook Marketplace, or ClassicCars.COM.
Once you find a car that catches your eye, you can click on it to see more details, such as photos, videos, specifications, history, and description. You can also request more information by filling out a form on their website or calling the showroom where the car is located.
Step 2: Contact a Salesperson and Make an Offer
If you are interested in buying a car from Gateway Classic Cars, you will need to contact a salesperson who will assist you with the process. You can either call the showroom directly or submit your contact information on their website or a third-party website. A salesperson will then call, email, or text you to begin their selling process.
The salesperson will try to persuade you to make a deposit on the car you are interested in. Depending on the cost of the consigned vehicle, the deposit will either be $1,000 or $5,000. The salesperson will tell you that your deposit is a non-refundable down payment and that it will take the car off the market for anyone else to buy. The salesperson will also tell you that they need your credit/debit card numbers before they can take your offer to the consignor (the car owner). Once the consignor agrees to your offer, they will run your credit/debit card for that amount.
WARNING: You do not have to make a deposit to buy a car from Gateway Classic Cars. Making a deposit is risky because you might lose it if something goes wrong or if you change your mind. Instead of making a deposit, you can tell the salesperson to draw up the paperwork for the amount that you want to pay for the car and send it to you. You can then send a wire transfer after you sign the documents. If they send you documents to sign, it means that your offer was accepted. It is in the salesperson’s best interest to reserve the car for you once you send in signed documents. Without a deposit, it is possible that someone else can buy the car, but that will only happen if the other person’s offer is higher than yours.
Step 3: Avoiding Gateway Classic Car’s Deception
In this actual example of a deal at Gateway Classic Cars of Scottsdale, Arizona, notice that the sale price of the 2009 Ford Mustang (SCT1455) was $53,000.00, which, if the standard 12.5% Buyer’s Fee were taken from the asking price, would have been $6,625.00, and resulted in a Final Sale Price (Balance Due) of $46,375.00.
Yet, based on the Sale Contract above, the Buyer negotiated what he thought was a deal by paying $5,500.00 off the asking price. This wasn’t a great negotiation because the CarFax Retail Value was listed at $39,480.00.
Now, notice how Gateway Classic Cars in Scottsdale charged him a 12.5% Buyer’s Fee ($5,937.50) and added a $429.72 Documentary Fee to arrive at nearly the same Final Sale Price (Balance Due) as if they would if the buyer had just paid the original asking price ($46,929.72 – $46,375.00 = $554.72).
After negotiating the Agreed Sale Price, the Sales Rep at Scottsdale calls the Consigner and asks him/her to sell their vehicle for $35,867.92 (Balance Due – Less the 12.5% Buyer’s Fee – Less another 12.5% Consigment Fee). If the Consignor agrees to this number, Sal Akbani, the owner of Gateway Classic Cars, makes a total of 25% commission (12.5% off sale + 12.5% off the consignment) on a vehicle he only stored on his sales floor. When the Buyer sees the “Buyer’s Commission” on the contract, they are told that the Consignor pays that fee.
For the Consignor, this sounds like a really bad deal because when consigning his/her car at an original sell price of $53,000.00, the original Net To Owner (NTO) number he agreed to was $41,273.75.
The Consignor pushes back on this deal, but after haggling him about how long his/her vehicle has been on the floor and how he can cut him a check today, the Sales Rep asks, “Okay, what is your minimum?” Typically, the Consignor will say something like $40,000.00. The Sales Rep says, “Ok, let me call the buyer back.” While this is happening, the Consigner is spending the money in his head, and he has already mentally accepted a lower minimum by the time the Sales Rep calls back with this lie, “Ok, the lowest he’s willing to go is $38,500.00.” If he is a good Sales Rep, he’ll be quiet at this point and say nothing while the Consignor argues with himself/herself. The Consignor then says, “Okay. When can I come to get my check?”
In this deal, Sal Akbani only makes a total of 20% instead of his 25%. He’ll be upset at the Scottsdale team, but at the end of the day, he never had any skin in the game, and everyone leaves happy for now.
Step 4: Review and Sign the Paperwork
If the consignor accepts your offer, Gateway Classic Cars will send you some paperwork to review and sign. The paperwork will include:
- A bill of sale that shows the purchase price of the car and any fees or taxes
- A buyer’s fee agreement that states that you agree to pay an additional fee of 12.5% of the purchase price or $1,000 (whichever is greater) to Gateway Classic Cars for their services
- A disclaimer of warranty that states that all cars are sold “as is” and “where is” and that Gateway Classic Cars makes no representations or warranties about the condition or quality of the cars
- A power of attorney that authorizes Gateway Classic Cars to act on your behalf in transferring the title and registration of the car
- A shipping agreement that states that you are responsible for arranging and paying for the transportation of the car from the showroom to your location
WARNING: You should read all the paperwork carefully and make sure you understand what you are agreeing to. You should also check for any errors or discrepancies in the information. Some things to look out for are:
- The purchase price and fees should match your offer and what was agreed upon with the salesperson
- The buyer’s fee should be calculated correctly based on 12.5% of the purchase price or $1,000 (whichever is greater)
- The disclaimer of warranty should not contain any contradictory or misleading statements about the condition or quality of the car
- The power of attorney should not give Gateway Classic Cars any rights or authority beyond transferring the title and registration of the car
- The shipping agreement should not hold you liable for any damages or losses that occur during the transportation of the car
If you have any questions or concerns about the paperwork, you should contact the salesperson or a manager and ask for clarification or correction. You should not sign anything that you are not comfortable with or that you do not fully understand.
Step 5: Pay for the Car and Arrange for Shipping
After you sign the paperwork, you will need to pay for the car and arrange for shipping. You can pay by wire transfer, cashier’s check, or personal check. You should not pay by credit card because Gateway Classic Cars will charge you a 3% convenience fee on top of the purchase price and fees.
You can arrange for shipping by contacting a reputable and insured transportation company of your choice. You can also ask Gateway Classic Cars for recommendations, but you should do your own research and compare prices and reviews. You should not rely on Gateway Classic Cars to arrange or pay for shipping because they are not responsible for the car once it leaves their showroom.
You should also ensure you have insurance coverage for the car during the shipping process. You can either use your own insurance policy or purchase one from the transportation company. You should not assume that Gateway Classic Cars or the consignor have insurance coverage for the car.
Step 6: Receive the Car and Inspect it
Once the car arrives at your location, you should inspect it carefully and make sure it matches the description and photos that were provided by Gateway Classic Cars. You should also check for any damages or defects that might have occurred during the shipping process.
If you are satisfied with the car, you can enjoy your new classic or exotic vehicle. If you are unsatisfied with the car, you might have some options to resolve the issue, depending on the nature and extent of the problem.
WARNING: You should be aware that buying a car from Gateway Classic Cars is a risky and uncertain process. You are buying a car sight unseen, without any guarantees or warranties, from a company with a reputation for deceptive and unethical practices. You might end up with a car that is not what you expected, wanted, or paid for. You might also encounter difficulties or delays in receiving the title and registration of the car. You might have limited or no recourse if something goes wrong or you are unhappy with your purchase.
Altogether, before you buy a car from Gateway Classic Cars, you should do your due diligence and research both the car and the company. You should also consider other alternatives, such as buying from a local dealer or a private seller who can let you see, test drive, and inspect the car in person. Buying a classic or exotic car is a big investment and a personal decision, so you should make sure you are getting what you deserve and what you desire.
Consider speaking with us about the vehicles(s) you are interested in. Having been sales agents and showroom managers at various Gateway Classic Car locations, we will be able to negotiate the best deal for you. Contact us for a consultation. CONTACT US THROUGH FACEBOOK MESSENGER