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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


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?