Consigning a car: how it works and what to ask

Consigning a car means a dealer sells it on your behalf. The car stays yours while it's listed; the dealer markets it, deals with buyers, handles the sale paperwork and pays you after the car sells. It's one of three ways to sell through a dealer — the others are a cash sale and a trade-in — and which one fits depends on how soon you need the money and how much of the process you want to hand over.

Cash sale, trade-in or consignment

• Cash sale. The dealer buys the car. The title transfers to the dealer and you're paid at the sale. At Xuma, you get an offer the same day.
• Trade-in. The dealer takes your car as part of selling you one of theirs. In Florida, a registered dealer deducts the trade-in allowance from the taxable price of the car you buy when both are one transaction (DOR GT-800030), so the trade also lowers the amount you pay sales tax on.
• Consignment. The dealer lists and sells your car, and you're paid after it sells. Until then the car, and any loan on it, remain yours.

Consignment trades time for control: you agree the price with the dealer and wait for a buyer. A cash sale trades the wait for a fixed number today.

What to ask before you sign a consignment agreement

The agreement governs the arrangement, so the details belong in it. Ask these, and get the answers in writing:

• The fee. A flat amount, a percentage of the sale price, or everything above an agreed net to you — and what happens to the fee if the price is reduced later.
• Duration. How long the car is listed, how either side ends the agreement early, and whether there's a charge for taking the car back unsold.
• Costs. Who pays for detailing, photography, repairs the dealer recommends and transport to the lot, and whether those come out of your proceeds.
• Insurance and custody. Whose policy covers the car on the lot and on test drives, with what deductible; where the car is kept; who may drive it.
• Offers. Whether you approve the final price, and how you hear about offers.
• Payment. How many days after the buyer pays you receive your money, and how a loan payoff is handled.
• Title. Whether the dealer needs your paper title before listing, and exactly what you sign and when.

Florida paperwork that still applies

Consignment doesn't change the state's rules on the title, the lien, the plate and the notice of sale. From FLHSMV:

• Title. The seller completes the “Transfer of Title by Seller” section on the front of the title, and both buyer and seller acknowledge the odometer disclosure. Ask the dealer when that happens in a consignment sale.
• Electronic title. If your title is electronic, it stays in FLHSMV's database until a paper title is requested. An owner with no lien can convert it online at the MyDMV Portal for $4.50; the paper title arrives by mail in about 3–4 weeks. Ask whether the dealer needs the paper title before listing, and start early if so.
• Lien. A car with an existing lien can't be sold in a private sale until the lien is satisfied and reported to FLHSMV. If there's a loan on your car, ask how and when the dealer pays it off from the sale, and have it written into the agreement.
• Plate. In a Florida sale, the plate stays with the seller, not the car. Surrender it or transfer it to another vehicle before you cancel the insurance; the other order risks a suspension and reinstatement fees. Ask the dealer what to do with the plate while the car is listed and after it sells.
• Notice of sale. Florida asks a seller to notify FLHSMV within 30 days of a sale, but the requirement doesn't apply to a sale to or by a licensed motor vehicle dealer (Fla. Stat. 319.22). Ask what the dealer files, and keep a copy of everything you sign.

If the car sells for less than you paid

Losses from the sale of personal-use property, such as a car, aren't tax deductible (IRS Topic 409). Rules change; check the official source or ask a tax adviser before you rely on that.

Consigning with Xuma

Xuma sells your car for you, in three steps: tell us about the car, we talk through price and terms with you, then we sell it and you get paid. Bring every question above; terms are talked through with you before the car is listed. Start on the consignment page. If you'd rather sell outright, get an offer — we make one the same day.