How to Avoid Pitfalls in the Consignment Process at Gateway Classic Cars
If you have a classic car that you want to sell, you might be tempted to consign it with Gateway Classic Cars, one of the largest and oldest consignment dealers in the US. They claim to have a free or low-cost consignment program, wide exposure to potential buyers, and a high success rate of selling your vehicle. However, before you sign up with them, you should be aware of some of the pitfalls and drawbacks of their consignment process. Here are some tips on how to avoid them and get the best deal for your car.
Do your own market research. Gateway Classic Cars will assign a salesperson and a business development representative to inspect your car and suggest an asking price and a net-to-owner (NTO) amount. The NTO is the minimum amount you will receive after they sell your car and deduct their commission and fees. However, their suggested price may not reflect the true market value of your car, and their commission may be higher than you expect. They will tell you they make a minimum of 12.5% commission, but they often make more by selling your car above the NTO amount.
The owner, Sal Akbani, pushes his sales reps to get up to 25% commission by lying to the consigner about how much the vehicle sold for. This means by collecting 12.5% from the sale and 12.5% from the commission, Sal Akabani is making a whooping 25% commission on a vehicle he doesn’t even own. Call it theft, call it fraud, call it capitalism. Just don’t call it transparent! Therefore, you should do your own market research and compare prices of similar cars sold online or at auctions. You should also negotiate your NTO amount and make sure it is clearly stated in the contract.
Read the contract carefully. Gateway Classic Cars will ask you to sign a 90-day consignment contract that gives them the exclusive right to sell your car during that period. You cannot sell your car to anyone else or take it back without paying a penalty fee. The contract also specifies other conditions, such as your responsibility for maintaining insurance, registration, and title of your car, their right to modify or repair your car without your consent, their liability for damages or theft of your car, and their arbitration clause that limits your legal recourse in case of disputes. You should read the contract carefully and understand all the terms before signing it. You should also ask for a copy of the contract and keep it for your records.
Monitor your car’s condition and exposure. Once you consign your car with Gateway Classic Cars, they will take photos and videos of it and list it on their website and other online platforms. They will also display it in one of their 21 showrooms nationwide. However, they may not take good care of your car or market it effectively. Your car may be exposed to dust, dirt, moisture, or extreme temperatures in their showroom. It may also be driven or started without your permission or supervision. It may be damaged during routine inventory maintenance and repair without your knowledge. It may not be featured prominently on their website or social media accounts. It may not receive enough inquiries or offers from potential buyers. You should monitor your car’s condition and exposure by visiting their showroom regularly, checking their online listings, and asking for updates from their sales team.
Be prepared for a long wait or a low offer. Gateway Classic Cars claims that they sell nearly 80% of their consigned vehicles, but that is a lifetime statistic. In reality, less than 15% of their vehicles sell within the first 90-day consignment period. This means that you may have to wait for several months or even years before your car is sold, or you may have to renew your contract multiple times. Alternatively, you may receive a low offer from a buyer that is below your NTO amount or your expected value. In that case, you have to decide whether to accept the offer or reject it and wait for a better one. Either way, you may lose money or time by consigning your car with Gateway Classic Cars.
Consider other options. Consigning your car with Gateway Classic Cars may seem like an easy and convenient way to sell your classic car, but it is not without risks and costs. You may have to pay fees, commissions, taxes, and other expenses that reduce your profit margin. You may have to deal with delays, hassles, or disputes that cause you stress and frustration. You may have to settle for a low price or a long wait that diminishes your satisfaction. Therefore, you should consider other options for selling your classic car, such as selling it yourself online or offline, selling it to a private buyer or a dealer, or selling it at an auction. These options may offer you more control, flexibility, speed, or value for your car.
Selling your classic car can be an exciting and rewarding experience if you do it right. By following these tips on how to avoid pitfalls in the consignment process at Gateway Classic Cars, you can make an informed decision and get the best deal for your car.