The Used Car Dealership Lot You Should Never Buy a Classic Car From Warning

The popularity of shopping for a used car is largely due to smart shoppers are looking for a way to save money rather than spend an average of $47,000 today on a new car. Other perks of buying a used car are that you can check car review resources and find out just how reliable a particular model proved to be and/or whether there are any recalls that need addressing before agreeing on the asking price.

Used Car Dealership Warning

While driving from one used car dealership to another, you might find your attention drawn to one that has anywhere from a few to several classic cars or trucks parked in the front of the lot―eye candy to those of us who have fond memories of older vehicles.

In fact, you might find that popular red 1966 Ford Mustang coupe you’ve always wanted at a price that is competitive with your used car budget. Furthermore, human nature being what it is, you begin to remember reading about how buying an older model used car that you can work on can be a reasonable alternative to buying a recent model used car that is mechanically and electrically more complex to work on.

Related article: Avoid The Traps and Pitfalls of Reviving a Classic Car and Winding Up in Car Project Hell

Been there, Done that.

However, what you may not realize is that this used car lot is actually a car consignment dealership, which should be a red flag for used car shopping.

What is a Car Consignment Dealership?

A car consignment dealership lot is a business where anyone can sell their car through a dealership without having to manage the sales process themselves. Typically, the process works like this:

• Owner Agreement: The car owner signs an agreement with the dealership, giving them permission to sell the car on their behalf.
• Free Marketing: The dealership displays the car on their lot and includes it in their online listings.
• Sales Process: The dealership handles the sales process, including showing the car to potential buyers, negotiating the price, and completing the paperwork.
• Fees and/or Commission: In return for their services, the dealership typically charges a fee or takes a commission from the sale price.
• Final Sale: Once the car is sold, the dealership deducts their fee and gives the remaining proceeds to the selling car owner.

7 Risks of Buying a Used Car from a Car Consignment Dealership

Buying a car from a car consignment dealership comes with potential risks that buyers should be aware of:

1. Consignment cars are often sold "as-is," meaning there may be no warranty, and you might not have any recourse if issues arise after purchase.
2. The history of the vehicle is unknown or unshared by the seller. A comprehensive history of the car (especially a classic), such as previous accidents, repairs, or maintenance issues will likely be unavailable through used car resources like CARFAX.
3. Consignment dealerships do not normally perform thorough inspections or reconditioning, unlike certified pre-owned programs offered by traditional dealerships. Since the car is pre-owned, there could be hidden mechanical or electrical problems that are not immediately apparent.
4. You might not be allowed to test drive the vehicle further than once around the block or take the vehicle to a mechanic for a thorough inspection before buying.
5. Title and Registration might not be immediately available, and you might find yourself with a title-less or faked title car.
6. The car could have been stolen and taken to a consignment dealership.
7. Consignment dealerships do not typically provide the same level of customer service and post-sale support as traditional dealerships if a problem arises.

The Car Consignment Dealership Classic Car Flip Scam

Back to that red 1966 Ford Mustang on the lot that caught your eye, there’s a pretty good chance that it is not all that it appears―a growing problem today with Baby Boomers feeling nostalgic and deciding to buy a classic car that might look classy with a new paint job and flashy chrome…but has serious internal problems that are hidden.

A good example of just this type of scenario was the topic of a recent Uncle Tony’s Garage YouTube channel episode where the host goes to a friend’s garage where a mid-60s Ford Mustang bought from a consignment dealership was in for repairs because the new owner could not figure out why his rebuilt pony car powerhouse could not go faster than 55 mph!

As the video shows, the new owner was the victim of fraud with a classic car flip scam where someone either had a rebuild project that failed and decided to unload it on someone else; or it was bought by a flipper who put a lot of cosmetic work into it to cover up someone else’s rebuild goofs. In either case, the car was sold with false advertising stating that it ran great―but physically it looked like the real thing you see in automotive magazines like Hemmings Motor News.

Unfortunately, as stated earlier―consignment sales are often As-Is with no protection for the buyer.

Related article: Used Car Dealer Forced to Buy Back As-Is Car It Sold

The Video That is Like Watching the Aftermath of an Accident

Follow along with the host and his friends to see just how incredibly bad this vehicle turned out to be with some unbelievable modifications the previous owner(s) made before it was flipped at a Consignment Dealership.

Gone Too Far―This Rip-Off Red Mustang Is Classic Car Flipper Butchery Of The Highest Order!

How to Protect Yourself From a Classic Car Flip Scam

The only sure way to protect yourself from a classic car flip scam is to get help from someone who is into that particular make and model of classic car. Do a search online and you will often find in your town there is an interest group for that model of car and/or go to a performance car provider and ask if they know of someone who knows someone who could help you evaluate the model you are interested in.

Car enthusiasts are great because they are often so entrenched into the minutiae of their model of interest, they can spot a problem immediately―if there is one―and can also tell you what a realistic going price for that model is.

Timothy Boyer is an automotive reporter based in Cincinnati. Experienced with early car restorations, he regularly restores older vehicles with engine modifications for improved performance. Follow Tim on Twitter at @TimBoyerWrites  and Facebook for daily news and topics related to new and used cars and trucks.

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Image source: Deposit Photos