Is it a Good Idea to Sell a Car on Consignment?

Selling your car takes time, energy, and sometimes even money. However, outsourcing your selling efforts, also known as “selling on consignment,” can help you save a lot of time and energy. But is it really a good idea to sell your car on consignment?

There are three key benefits to selling your car on consignment

A person checking a car for potentially more quality issues at a dealership.
Person checking a car | Getty Images

For the unfamiliar, car consignment is when the seller pays someone to do the legwork for them. But why pay someone else to do something you can do yourself for free? Great question. Here are three key benefits to selling your car on consignment, according to Exotic Car Trader:

  • Saves time: The classifieds listings are written and posted for you, and any phone calls for the car will be answered. Some consigners can even arrange shipping for the car as well as detailing.
  • Safety is key: When selling a car on consignment, there’s no need to meet random people in dark parking lots. Also, if someone tries to scam the consignment company while selling your car, you likely won’t have to deal with it.
  • Increased odds of selling: It’s hard to ship a car, but most consigners have already done it before. In that case, your odds of selling the car are higher since out-of-state buyers are accessible.

As stated before, the benefits of consigning a car can outweigh other ways to sell it. So let’s revisit the other methods of selling a car to compare.

Selling your car to a dealership is quicker but can lead to less money paid

A customer learning how to buy a new car during the semiconductor microchip shortage.
Dealership customer | J. Conrad Williams Jr./Newsday RM via Getty Images

Most dealerships will purchase your car even if you’re not planning to trade it in. Truth be told, selling your car to a dealer is one of the easiest and quickest ways to offload your car. In that case, it can save a lot of time, just like consignment. However, the main drawback is that dealers typically pay less for your car than a private party will.

Selling your car to a private buyer could lead to a scam or wasted time

On the other hand, selling your car to a private party can lead to more money paid for your car. However, meeting up with a stranger at weird hours could be unsafe. And in some cases, some private parties could be out to scam you.

Selling your car at an auction can be the luck of the draw

Kia logo at a Hyundai dealership
Kia logo | Justin Sullivan/Getty Images

There’s also the possibility of selling your car at an auction. Selling at an auction can lead to a lot of profit. However, that’s only if you’re lucky enough to get some well-heeled buyers. Also, most of the auction fees can easily into any profit that you gain from it.

In comparison, selling a car on consignment can be a far better option than the rest

As we can see, selling a car on consignment can lead to more money made than at a dealership, less stress than selling to a private party, and more control than selling it at auction. However, the one major downfall is that a middleman is involved, which costs some money.

How much does selling a car on consignment cost?

A sales manager helps out customers at a Honda dealership.
A sales manager helps out customers at a Honda dealership. | Katie Falkenberg/LA Times via Getty Images

When selling a car on consignment, you can expect to pay three different costs:

  • State and federal fees
  • Consignment fees
  • Administrative fees

The state and federal fees will always be factored into selling your car, no matter how you sell it. However, the consignment fees are what you pay to the company that sells your car. These fees are sometimes a fixed rate, but they can also be charged as a percentage of the car’s final selling price. This also includes any administrative fees taken by the cosigner company, although some companies may make them separate.

Ultimately, selling your car on consignment is a good idea if you want to save time and energy. The only major downside is that you’ll have to pay for the service, but if your car sells for the price that you want, then it may not be that big of an issue.

RELATED: How Do I Sell My Leased Car to a Third Party?