The Shelby American (Winter 2016)

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The SHELBY AMERICAN Winter 2016 18
consign your car to a dealer– or MAYBE not
ost people wouldn’t consider
selling their home without using
an attorney. Yet, people routinely con-
sign their classic cars to a dealer they
hardly know without a second
thought. With prices of classic Shelbys
routinely reaching the price of a small
home, entering into a legal consign-
ment contract may not be in your best
interests.
Certainly there are advantages to
consigning your car with a dealer.
These dealers offer a “no hassle” sale.
They advertise the car, field calls, con-
duct negotiations, arrange transporta-
tion and may even provide financing
to potential buyers. In most cases, the
owner retains legal possession of the
vehicle until the car is sold.
The dealer usually asks for the car
to be present at their facility. The more
cars they have, the more perceived le-
gitimacy they have. Certainly, one red
flag should be when the dealer asks
for the title of your car. In many states
possession of a vehicle with the intent
to sell the car constitutes an implied
contract, even if it’s not written. If the
dealer has your car and the legal title,
you may be opening the proverbial can
of worms. Some dealers ask for a
monthly storage fee if the car is not
sold. Others ask for monthly advertis-
ing fees. The consignment itself usu-
ally means the dealership will receive
anywhere from 3% to 20% of the final
sale price.
I recently spoke to one classic car
dealer who noted that consignment
can be a double-edged sword, and
costly for the dealer. Many owners
have unrealistic expectations of what
their car is worth. When the sale
prices of similar cars go up, it can be-
come increasingly harder to sell these
cars. The higher the prices climb, the
more the number of available buyers
decrease. Sometimes significantly.
Some sellers have also been known to
use the consignment process to store
their cars for extended periods of time,
knowing fully well the high price will
mean their car is unlikely to sell.
Buying a car from a consignment
dealer can be equally challenging. Re-
member you are often dealing with
someone that does not legally own the
vehicle. You need to be clear on how
and when the transfer of title will
occur. Try to avoid the dealer having
access to your payment and the title at
the same time. Most dealers do not
want to take legal ownership, even
after a deal is made. Consignment is a
way they can attract a number of cars
with a minimal capital investment.
Taking legal ownership of the vehicle
can also have tax implications for
them. You should make sure the per-
son signing your new title is the legal
owner who intends to sell the vehicle
to you.
A quick internet search will yield
many stories of unscrupulous classic
car dealers who have defrauded un-
suspecting owners. The most common
complaint is non-payment after the
consigned car is sold. The owner is out
both his car and his money. In many
states these matters are treated as
civil complaints with very little poten-
tial for redress. It can be even more
complicated when cars are shipped
across state lines or out of the country.
Overseas buyers tend to be less in-
formed on the variety of U.S. state and
federal laws. Cars that are exported
from the United States are required to
have a clear title or document of own-
ership. They are also required to have
a Vehicle Identification Number (VIN)
inspection. If you have read the fo-
rums you understand how complex
VIN questions can be, even on a
Shelby with good numbers. It’s unrea-
sonable to believe the people inspect-
ing the cars will be knowledgeable on
the nuances of a fifty-year old Shelby.
Twenty years ago, a classic car
dealer in Wisconsin appeared to be
very successful. Write-ups in the local
newspapers and publications raved
about the dozens of shiny, classic cars
in his showroom. For a short time
everything seemed to be going very
well. Then the State of Wisconsin re-
ceived several complaints about con-
signors not being paid and they
opened an investigation. It was
learned that several consigned cars
had been “sold” to more than one
buyer. Many people were left unpaid
for cars or were unable to title the cars
they had purchased. The dealer even-
tually went bankrupt. The courts ac-
tually ruled that cars in the possession
of the dealership for the purposes of
consignment were dealer assets and
could be sold to discharge the bank-
ruptcy. Owners were not only out their
cars, but also any money owned to
them. Over 125 individuals were af-
fected by these fraudulent activities.
The owner was eventually found
guilty and sent to prison for 6 years.
The total damages were between $3.2
and $3.6 million. Upon release from
prison, the “rehabilitated” owner
opened another classic car dealership.
It started with a Flashing Yellow
Light bulletin on the SAAC Forum on
December 17, 2015. SAAC member
Don Hinkle reported to 1968 Registrar
Vincent Liska that he had consigned
his ‘68 Shelby GT350 (8T02J149464-
01467) to classic car dealer Blue Mar-
lin Motors in Stuart, Florida. The
owner of the business, Craig Danzig,
was subsequently arrested by the local
sheriff. Matters were made worse be-
cause the car was allegedly shipped to
France. Hinkle was neither advised of
the sale nor did he receive any pay-
ment. He retained the car’s title and
registration. The matter, at last report,
has yet to be resolved and Hinkle is
still without the car or payment for it.
The initial bulletin on the SAAC
Forum launched a lively thread which
highlighted the problem of consigning
Shelbys to dealers for subsequent sale.
There seemed to be no shortage of hor-
ror stories regarding questionable
practices and/or disreputable individ-
uals involved in consignments.
Not all dealers offering to assist
owners by handling consignments are
swashbuckling pirates who make Jack
Sparrow look like an Eagle Scout. We
asked ‘68 Shelby expert Pete Disher to
collect his thoughts on the question of,
to consign or not to consign?
M