If you are looking at purchasing a vehicle from Gateway Classic Cars, it means that you have found a classic, exotic, rare, or unique car or truck for sale on either their website, or at a 3rd party website such as, Ebay, Autotrader Classics, Hemmings, CarsForSale.COM, Autabuy, Craigslist, Facebook Marketplace, or ClassicCars.COM. If you submitted your contact information into their website or a 3rd party website, a Gateway Classic Car Salesperson has called, emailed, or texted you to begin their selling process. Or, perhaps, you found their phone number listed on the vehicle advertisement and you decided to call into one of their eighteen (18) showrooms throughout the country.
Gateway Classic Cars states that it is the “World’s Largest Classic and Exotic Car Sales Company”. They intend to mean here, that either they sell more units than any other classic and exotic car retailer or that they have the largest inventory of classic and exotic cars. The company was established in 1999 by Sal Akabani, and has grown today into one of the few companies who are retailing primarily consigned cars on a national basis. Gateway Classic Cars apparent success is not due to great ownership or management, but, rather, merely because they have been the first movers in this national market.
When you are working on purchasing a vehicle from Gateway Classic Cars, remember that the Salesperson has been trained to get you the make a deposit on the vehicle you are interested in. Depending on the cost of the cosigned 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 vehicle off the market for anyone else to buy. The Salesperson will tell you that even before they can take your offer to the consignor, they need your credit/debit card numbers, because once the consignor agrees to your offer, they will run your credit/debit card for that $1,000. Deposits are everything for this business, because it allows them to track how much money is coming in and it commits the buyer to the purchase. YOU DO NOT HAVE TO MAKE A DEPOSIT TO PURCHASE A VEHICLE. Rather than commit yourself to losing $1,000 in case something happens or you learn something new, just tell the Salesperson to draw up the paperwork for the amount that you want to pay for the vehicle and send it to you and tell him or her than you’ll send a wire after you sign the documents. If they send you documents to sign, then it means that your offer was accepted. It is in that Salesperson’s best interest to reserve the vehicle for you once you send in signed documents. Without a deposit, it is possible that someone else can buy it, but that will only happen if the other person’s offer is higher than yours.
You’ll notice on the signing documents that Gateway Classic Cars sends you that there is a line-item in the financial portion of the contract that reads ‘Buyers Fee’. The buyer’s fee should be 11% of your offer. It appears as if that Buyer’s Fee has been deducted from your offer price and you’re paying it. This is partially true. The person paying your Buyer’s Fee is the consignor essentially, and because of that the true value of your purchase has just been inflated by 11%. This scheme is comparable to if Joe the Inventor asked me to sell his Widget for him and told me that he only wants $50 of the profit. The Widget is only worth $100, but I sell it for $150, so that I can use that extra $50 to pay Joe what he wants. In the end, I actually make out better than Joe, because he got the $50 he wanted, but I got $100. Yes, there have been times when we have made just about as much in commission + buyer’s fee has the consignor made in his adjusted Net to Owner. Again, while this Buyer’s Fee scam primarily affects the consignor, because he or she has been deceived about how Gateway Classic Cars will make more than 12.5% and has not been told about this Buyer’s Fee, it also affects the Purchaser substantially because it means that they are paying up to 23.5% (12.5% commission + 11% buyer’s fee) over true value.
Gateway Classic Cars has a relationship with Collector Car Lending and several shipping brokers. If you fill out the finance application through their website it goes directly to Collector Car Lending and if they originate your loan, they will, in turn, send Gateway Classic Cars a kickback of $200. Similarly with the shipping brokers, if Gateway Classic Cars gets you a quote from them and you end up shipping with them, they will, in turn, send Gateway Classic cars a kickback of $100, which means that you will have paid $100 more for shipping because that kickback was rolled over onto you.
Like most automotive dealers, Gateway Classic Cars does charge a ‘Document Fee’ that they say takes care of all the necessary legal paper work to process your sale. You do not have to pay this fee. If you negotiate yourself out of it, it will come out of the Salesperson’s commission, but don’t be tricked into paying it.
As you see from the True Car Value Calculator below, the Salesperson has very little incentive to move the needle much on your offer price. They are working on a pool commission system where the whole team get paid .5% on the profit (commission + buyers fee) for how many days they work that week. They are also getting paid between $90 and $100 daily base pay. If their monthly profit meets certain escalating tiers, they will receive monthly bonus. Yet, altogether they are getting paid pennies versus what the owner is making. Indeed, Gateway Classic Cars has significant overhead, having to pay rent on most of showrooms that they don’t own and they have a whole staff of accountants, marketing, and business development, but they also have an inventory worth millions that they don’t own or have to pay taxes on. Truly, it is one of the best schemes going, and it is a shame that rather become more profitable by becoming more well managed, they chose to become greedy by engaging in a pattern of corrupt activity.
BUYING ON eBay:
Gateway Classic Cars is now using eBay Motors to list their inventory. This is a departure from using just eBay Classifieds and comes with a significant monthly monetary investment. How does their eBay strategy affect the buyer? In short, you’re wasting your time bidding on any vehicle Gateway Classic Cars is listing there. All they are using the eBay auction feature for is to harvest leads. If your bid is high enough, they will contact you to try to try to transition your bid into an actual offer that is close enough for them to contact the seller to ask him or her to lower their Net to Owner, so that a deal might be able to be made whereby Gateway Classic Cars can make their 23.5% commission. In short, they are using eBay Motors to execute another level of their scam, albeit THIS ONE is legal, but questionable as far as it being ethical because they never intend to allow people to win an auction through eBay.
If you have to have the classic, exotic, or rare car or truck at Gateway Classic Cars then, buy it, but use the Calculator below to determine what you are going to offer. Visit our Facebook Page for more updates and our corrections to the latest inventory added to Gateway Classic Cars.