Gateway Classic Cars will accept for consignment essentially any classic vehicle, exotic vehicle, rare vehicle, unique vehicle, low-mileage modern sports car, or modern in-demand pickup truck. At its 17 nationwide locations, Gateway Classic Cars either has a free consignment program or charge a $295.00 flat fee. There are other plans and price structures for multiple vehicles to be consigned. Each contract period is for 90-days; the consignor relinquishes their right to sell during that period. There is currently no fee in place for consignments to roll over into a new 90-day contract if it doesn’t sell in the previous one.
Gateway Classic Cars states that they are selling nearly 80% of vehicles consigned with them, but that is a lifetime statistic. Under 15% of vehicles sell within the first 90-day consignment period. This is a very important number to consider because for some people, selling your vehicle at an auction and earn less might work better than keeping it on consignment for 270 days.
Upon arrival for consignment, a Gateway Classic Cars salesperson and Business Development Representative will visually inspect the consignor’s vehicle to ensure that it does not have any corrosive rust, runs appropriately, and does not have any safety concerns. If the vehicle is from 1982 or after, they will require the consignor to provide a recent CarFax. They will also inspect the vehicle to make sure that the Vehicle Identification Number (VIN) on the vehicle matches the VIN on the title and check the driver’s license of the consignor to make sure it matches the name on the title.
The Salesperson will then do some market research to determine a competitive asking price for the consignment, and based upon that asking price, they will inform you of your Net to Owner (this is negotiable). Once you agree to your Net to Owner, contracts will be drawn up to be signed by you and the Gateway Classic Cars representative. That contract will specify a number of conditions, but the most important one is that you agree to let them make a minimum of 12.5% commission. If you ask about that, the Salesperson has been trained to tell you that is rare that they will make more than the Reserve, which gives them the 12.5%, because all buyers negotiate. What they don’t tell you is that they always make more than 12.5% if it isn’t a motorcycle being sold.
Once consigned, your car will be photographed and have a video made of it driving. Gateway Classic Cars will then post your vehicle for sale on their website, Ebay, Autotrader Classics, Hemmings, CarsForSale.COM, Autabuy, Craigslist, Facebook Marketplace, ClassicCars.COM, and a few others. They will tell you that it will be listed on hundreds of websites, but these are the only websites I received leads from. Unless a test-drive is scheduled for your consignment, it will never be driven or started inside of the Gateway Classic Cars Showroom.
Unless the Salesperson has an offer on your consignment or there is an issue with it (e.g. damage, leakage, etc.), the only time you will hear from them is when they call you to ask you to adjust your Net to Owner. They have been trained and directed by their Regional Manager to call every consignor every ninety (90) days to ask them to take less for their consignment, which will, in turn, allow Gateway Classic Cars to lower their asking price. Tell will tell you that this new price will relist your consignment on all the third-party websites, but that isn’t true. What is going on here is that no matter how much you take for your consignment, Gateway Classic Cars, just wants to make 23.5% markup. This is free inventory for them. They have invested nothing in your consigned vehicle, but are looking to make up to 23.5% profit off of selling it. It is true, that the cheaper a car is, the quicker it sells, and the quicker it sells the faster Gateway Classic Cars can get their 23.5% profit. They might tell you that they will take away some of their negotiation room (the 11% difference between the reserve and asking price), and this will allow them to lower the price by more than what you are lowering your Net to Owner, but the important thing to remember here is that they are still looking to make much more than the 12.5% commission and if they ever do call you with a deal, the first number that they are telling you that they can put in your pocket is less their 23.5%,
WHAT THEY WON’T TELL YOU:
During the Net to Owner negotiations, the Salesperson will show you three figures: (1) Your Net to Owner; (2) The Gateway Classic Cars Reserve; and (3) The Asking Price. They will tell you that they will sell your consignment at the Reserve Price, and the reason why the Asking Price is 11% higher than that is for negotiation room. That is a lie! That 11% over their Reserve is what is presented on the contract to the buyer as a ‘Buyer’s Fee. They raise up the Asking Price 11% over the Reserve to make an extra profit off of the buyer and the seller. Gateway Classic Cars almost never sells a consignment at the Reserve Price. Even if a deal is in place to sell a consignment at the Reserve Price, the Salespersons has been trained to call the consignor and present them a number that is 12.5% lower. If the consignor agrees to 6.25% of that ‘adjusted’ Net to Owner, a Gateway Classic Cars Regional Manager or the owner Sal Akabani will give the Salesperson permission to close the deal and take the $1,000 deposit from the buyers.
Below are two calculators that will demonstrate to you how Gateway Classic Cars deliberately commit fraud by having their consignors sign a contract for a Net to Owner that they never intend to honor if the buyer doesn’t buy at the Asking Price.
Sell your vehicle yourself. You can do everything that Gateway Classic Cars does (including third-party listings, pictures, and video) for not much more than the consignment fee, even if you hired a professional. If you are uninterested or unable to answer calls about your car and show it to prospects, then just hire a neighbor, friend, or relative. You could hire an answering service for $10 a month. It makes no sense, whatsoever to get caught up in a scam and lose 23.5% of your profit. You won’t even lose that much at auctions where you can set your reserve price.
If you still think consigning at Gateway Classic Cars is the best option for you, then do your research on how much your vehicle should sell for. Deduct from that amount how much you think Gateway Classic Cars should profit. Then use that number as your Net to Owner. Sign your contract for that amount and do not EVER lower it, no matter what they tell you. Force the Salesperson to do their job and sell your vehicle on its merits, rather than its price.