It’s hard not to love a classic car. Vintage old style, carefully loved and cared for over decades by owners with a passion for craftsmanship. The classic car community is large and diverse, attracting enthusiasts from all walks of life. Consigning classic cars is one way owners can sell a vehicle that no longer brings them joy. Owners can put the money earned on consignment towards their next classic car project. But, it is not always so easy.
In late April, economic crimes investigators in Orange County, Florida arrested a father-son duo who owned a classic car consignment business. Police say their company, Just Toys Classic Cars, defrauded the owners of more than $600,000.
Just toys? More like a simple scam
The consignment company “Just Toys” is no longer in operation. But, when it was open, Michael Dean Smith Sr. and his son, Michael Smith Jr., took on consignment classic cars of all makes, models and ages. However, some owners have dropped their car off at Just Toys and never heard from the company.
WESH in Orlando reports that owners have waited longer than expected for information from Just Toys about their consigned cars. When the owners of the vehicles (or potentially past owners) contacted the company directly, Smith Sr. or his son claimed that “the car has been sold or is about to be sold and has asked for more time” . Even the most insistent owners have been fooled by Just Toys. But even they received “various excuses as to why they had not received their funds”.
The police report claims that there were 21 vehicles registered by 20 victims. The value of the cars was $614,000. Just Toys Classic Cars closed in December 2019, two months after losing its license to sell cars. Smith Sr. and Jr. are currently facing fraud and racketeering charges.
How do consignment car sales work?
When a car is consigned, the legal owner of the vehicle signs documents with the consignment company, leaves the car at the consignment lot, and lets the company do the rest of the work. The consignment company is responsible for advertising or networking the vehicle, liaising with potential buyers, and handling the actual sale.
After the sale is completed, the original owner of the car receives most of the sale price. According to Exotic Car Trader, the car consignment fee percentage of the total selling price is usually between 5 and 15%. Some companies charge a flat fee of around $250 to $1,000.
Is selling your car on consignment a good idea?
The story of Just Toys Classic Cars is not the first example of customers being defrauded by fake offers. Last year, nearly 50 consumers reported a supercar dealer who sold their cars and kept all the money. In January, a man pleaded guilty to defrauding luxury car owners of more than $1.5 million through a “lease consignment” scheme.
There are horror stories around car dispatch, especially for old classic cars, but it can work if you work with the right people. If you’re selling a classic car on consignment, you won’t have to do the legwork or heavy lifting yourself. Plus, you’ll never have to meet a sleazy stranger in a parking lot for a view or a test drive. Finally, you won’t have to worry about transporting the car to its new owner.
The downsides include classic car consignment fees, which can be high and leave you with less profit than you thought. You also run the risk of being deceived like consumers who have been deceived by Just Toys.
Safer ways to sell a classic car
If you want to go the consignment route, there are ways to do it right. Be sure to only work with reputable dealerships and review the vehicle consignment agreement carefully before signing it.
If you’re looking for other options, you’re in luck. Read MotorBiscuit’s step-by-step guide to selling a classic car to learn the best ways to sell a vintage or one-of-a-kind car to get the most value and peace of mind.
Keep scrolling to find out how the classic car community stays connected.
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