Selling a car on Consignment. Any thoughts or opinions?

[BEN 189]

Hi Guys

How good is selling cars on consignment? Where I live there was two consignment dealers who were very dodgy to say the least and now have been shutdown. I am trying to sell my car for a couple of weeks with no luck and a consignment dealer has contacted me if I was interested. It sounds pretty good but I am a bit iffy about it.
Has anyone done it before?
Thanks for any feedback.

[SSBarney]

There is an issue with selling on consignment, in Victoria Vicroads had been cracking down on motorbike shops selling on consignment.
Unfortunately :bash: i cant remember the exact issue, no doubt a loss in state revenue somewhere, but i think the issue is on the dealers side not the seller. A bike shop i know of had to remove all bikes from his shop, as all bikes were on consignment.

edit: from the info i posted below, it looks like it is OK in NSW :p

[SSBarney]

MOTOR VEHICLE CONSIGNMENT SALES

Ms HARRISON: My question without notice is to the Minister for Fair Trading. How is the Government alerting motorists to shoddy practices in the used car industry?

Mr WATKINS: Today I warn New South Wales consumers to be careful when selling or buying cars on consignment. As a result of recent failures of car consignment businesses, the Department of Fair Trading is targeting consignment vehicle sales during its inspections of New South Wales car yards. Dodgy car dealers should be aware that the department is watching and will close down any dealer caught flouting the law. A targeted compliance program is monitoring suspect dealerships and will swiftly respond if breaches are detected.

Consumers selling their cars on consignment enter an agreement with the motor dealer to display their car on a dealer’s lot in the hope that they will make a quick sale. The motor dealer is told how much the consumer wants for the vehicle. If the dealer can sell the car for more, the dealer usually keeps the difference. Some dealers charge a fee for the service. If they are careful, consumers can benefit by selling their cars on consignment. Unfortunately, some car dealers’ businesses collapse, and in some cases consumer losses have impacted badly on families.

Recent problems include motor dealers failing to pay consumers for their cars, vehicles being moved without the consumers’ consent and a lack of proper trust account records. Under the New South Wales Motor Dealers Act, motor dealers have to provide a contract with details, including the agreed amount to be paid to the seller and the period of agreement. Dealers should deposit any sale proceeds into a bank trust account within one day of the sale and pay the consumer within 14 days. Consumers should also check whether there are any extra charges, such as fees for keeping a car on the lot, petrol or detailing.

Sellers should be wary of dealers offering inflated prices to get vehicles onto their lots and should visit the car yard to check that the dealer is actively trying to sell the car. The following are some examples of recent consignment problems. Late last month the Department of Fair Trading suspended the dealership licence at the Consignment Centre at Penrith. The business had 70 vehicles on
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consignment worth a total of $900,000. Action was taken after allegations that cheques totalling $33,500 had been dishonoured, and that four consignments had not been paid.

In July the Department of Fair Trading suspended the dealership licence of Bladen’s Auto World at Queanbeyan, and won a Supreme Court action to appoint an administrator. That business had 20 vehicles on consignment, allegedly did not operate a proper trust account and had its cheques dishonoured. After the Department of Fair Trading investigated Peter William Andrews, Parramatta, the dealer’s licence was suspended and the business closed down in March. That dealer had 15 cars on consignment, and although approximately $60,000 was owing to consumers the Department of Fair Trading was able to get refunds for them.

Finally, the Department of Fair Trading suspended the business licence of the East Coast Motor Car Company, Newcastle, in August late last year after 38 consumers complained that their money was missing. In July Newcastle local court fined the principal, George Lloyd Jones, more than $16,000 for breaches under the Motor Dealer’s Act. That conviction is now the subject of an appeal. The lesson to vehicle owners is clear: take care if you are going to sell your car on consignment.

[Mongy]

Make sure you know who is responsible for the insurance while it is in the yard. The last thing you want is for somebody to take it for a test drive and damage it or not come back and have them tell you it was your responsibility. Also if they have a buyer and it is though finance make sure he is approved and correctly signed up before he gets the car, if not they’ll give him the car and you will be left looking for the money. If a buyer pays by cheque make sure they get paid by bank cheque, if a personal one bounces they’ll just throw the ball in your court and possibly leave you high and dry. I am not sure about the current laws with this but in the past it was a bit like Rafferty’s rules, every man for himself. I know, it took me 3 months to get a car back once that a dealer let go on a bounced cheque.

[seldo]

Hi Guys

How good is selling cars on consignment? Where I live there was two consignment dealers who were very dodgy to say the least and now have been shutdown. I am trying to sell my car for a couple of weeks with no luck and a consignment dealer has contacted me if I was interested. It sounds pretty good but I am a bit iffy about it.
Has anyone done it before?
Thanks for any feedback.
Ben, as someone who was in the industry for nearly 30 years, my advice is DON'T. Usually, the only dealers who will accept a car on consignment are the dodgy ones. A reputable, and therefore generally strong financially dealer, won't touch them. The guys who handle consignment stock are generally very borderline, which is why they cannot afford to buy their own. You will find that they will use your car as transport, it will deteriorate, and you won't get what you want for it but will end up taking it anyway because you are at the end of your tether. You have been warned...

[BEN 189]

Ben, as someone who was in the industry for nearly 30 years, my advice is DON'T. Usually, the only dealers who will accept a car on consignment are the dodgy ones. A reputable, and therefore generally strong financially dealer, won't touch them. The guys who handle consignment stock are generally very borderline, which is why they cannot afford to buy their own. You will find that they will use your car as transport, it will deteriorate, and you won't get what you want for it but will end up taking it anyway because you are at the end of your tether. You have been warned...


Thanks seldo for your advise. They seem to be ok with the telephone conversation and they did say the car will be insured by them while it is in the yard. But as I said, I have only heard dodgy things about them.

[DaveHAT]

My advice Ben is don't.
We once "sold" a boat on consignment. The dealer "went broke". End result.......No money, no boat, no motor...................Gone ! :mad:
Friggin dealer had done a flit and it was all over red rover. An expensive lesson. :rolleyes:

Whilst I realise this is only 1 incident and there may be many good stories of consignment sales, IMHO, it's not worth the risk.

Insurance or not, as Seldo said you have been warned.

[COSMOS]

the dude who lives a few doors down from me owns/runs a large consignment yard in southwestern sydney.

i note a lot of the cars in his lot end up as his personal transport and as transport for his wife from time to time. He seems to specialise in the SS/XR genre of vehicles and the place is always packed with tyre kickers.

My cynical advice is not to go this path...

[BEN 189]

Thanks for your advise guys. I will steer clear of this.

[seldo]

Thanks for your advise guys. I will steer clear of this.
That's good Ben. You see, the main problem is that once he's sold it, he has your entire car's worth in cash in his hand...so it's not as if he is only holding the profit he may make, he has converted your car into cash ...with your written authority to do so! Then, the hard part is to get the cash back. And half the problem is that often these blokes don't set out to dud you, but they sell your car, get the cash, and then they think that they'll just "use" your money for a bit until you discover your car has been sold. Then, if things are a bit tough, they find they've spent half of it and simply don't have the cash to give you when the time comes.
So, like I said, stay well clear.

[BEN 189]

Sounds really shonky, how are they still operating?
As I have said, in my area where I live, there were two consignment dealers. They made all the papers and news for all the wrong reasons for like cars disappearing, shonky sales etc, they are now not opearting.