Consignment services tend to have a mixed reputation. This is because the shop selling the item usually takes charge of the process, leaving the customer with no control over pricing and other important factors. Shops pressure customers to reduce their prices so that the product will sell, and customers feel they have no choice but to give in. In some cases, the consignment selling price ends up being less than the buyback price would have been. At AB Auto Town, we take the time to discuss consignment beforehand to offer you a guaranteed buyback price. This means that even if your car does not sell on consignment, we will purchase it at the set buyback price. This price is guaranteed, so there will be no surprises down the road. Our pricing system is transparent, and we do not charge consignment customers additional storage or handling fees. (AB Auto Town reserves the right to decline consignment services, depending on the price requested by the customer.)
Customers who are willing to wait to get money for their vehicle, are not fully satisfied with the appraised value of their car, and who will not be inconvenienced by not being able to drive their vehicle are good candidates for consignment services. In return, vehicles that sell on consignment can often fetch a higher price than the buyback amount.
Cars with limited market availability or models that are unpopular tend to have a buyback price that is lower than their Blue Book value. Vehicles like these can often sell for a decent price, but dealers will still give a lower appraisal value to protect themselves from the risk of having dead stock. Unfortunately, because car prices are driven by supply and demand, there is usually no way around it – cars that sell well are worth more to dealers than cars that don’t. Our consignment service is therefore a good option for customers who have models that tend to be less popular, as they have a chance of selling for a slightly higher price than what the appraisal value would indicate.
Blue Book retail value: $17,500
Blue Book trade-in value: $12,000
Blue Book private party value: $14,500.00
Buyback appraisal value: $11,000
One of our customers owned the vehicle described above. He went to several dealerships, and the highest buyback price he was offered was $11,000. He wanted to sell the car for $12,500 though, which meant he was still short $1,500. But look at the Blue Book retail price—$17,500! He should have been able to sell it for more than $11,000, but the dealerships were factoring in the risk of the vehicle breaking down or not selling. They set the ceiling at $11,000 figuring that if they were going to spend that much money on a trade-in, they might as well pick a faster-selling model.
AB Auto Town took the time to listen to this customer’s story and his requests, and we established a consignment contract. We set an $11,500 guaranteed buyback price and agreed to put the car on the lot for two months. If it sold, we would give him $13,000. The deal might take longer to go through, but there was no risk to the owner. The car ended up selling in one month and our customer got $13,000—more than he originally asked and $2,000 more than his highest buyback offer. Needless to say, he was delighted with the results.
