There are new rules as of September 1, 1999 that you need to know if you are selling a motor vehicle on consignment. The Fair Trading Act and the Automotive Business Regulation outline what a licensed automotive business must do when selling on consignment. Buyers should also know about these rules.

The consignment rules apply to motor vehicles as defined by the Motor Vehicles Act but not to motorcycles or off-highway vehicles. The rules also don’t apply to motor vehicles sold by auction. 

    When you agree to consign your car, you give a licensed automotive business permission to sell it on your behalf. Check with the Alberta Motor Vehicle Industry Council (AMVIC) to see if the seller is properly licensed.

When you consign your car, you must receive a signed copy of the consignment agreement. It must include the following information: 

	name, address and phone number for you and the business;
	a complete description of the vehicle including make, model, colour, number of doors and options,
	the vehicle identification number (VIN);
	the odometer reading;
	what you know about the vehicle’s history, including information such as accidents or use as rental vehicle, that could affect the price a buyer is willing to pay;
	a list of any liens against the vehicle that you know about;
	all fees the business will charge for services provided;
	an agreed-upon minimum price;
	who is responsible for insuring the vehicle while it is on consignment;
	whether the business can accept another vehicle or other personal property as part of the minimum price;
	when the agreement ends and what happens to the vehicle if it hasn’t been sold by then; and
	any repairs you authorize before the vehicle is sold and who pays for them.

    The business agrees that it won’t use the vehicle for personal use without your written permission. It also agrees that it will act as a trustee for any money, vehicles or goods it receives for your vehicle.

    If you are selling a vehicle on consignment, let your insurance agent or broker know. Make sure that your insurance covers the consignment if the agreement says you are responsible for insurance. If the business is responsible for insurance, make sure that it has the coverage you need. The business cannot charge you for insurance coverage.

    Look in one of the used-vehicle price guides, the newspaper, and specialty vehicle sales magazines to determine what is a reasonable price for a particular vehicle. The Alberta Motor Association can help members determine a price.

    When the vehicle is sold the business must pay you within 14 days. If the business knows there is a lien on the vehicle, it must pay the lienholder first. You get the remainder minus costs.

You must also receive a statement of account with your payment. It must:

	say how much was paid to outstanding lienholders,
	describe any vehicle or personal property that the business accepted as payment or part payment for your vehicle. It must also say how much this was valued at, and
	show how much money you were paid.

The business must give you a copy of the bill of sale showing the vehicle’s purchase price, if:

	the business is charging a percentage of the purchase price, or a percentage plus disbursements, or
	after the agreement was signed, you agree to take less money than was agreed to in the original agreement. You must receive the bill of sale within 14 days of the sale.

    Before you buy a consigned vehicle, check its condition by giving it a careful on-the-lot inspection and a test drive. Also have an inspection done by a qualified mechanic at another garage. Ask the business for the information the seller provided about the vehicle’s history including any liens against the vehicle. Check with AMVIC to make sure the business is properly licensed.

    Protect yourself, check for liens by doing a search at a registry agent. You will need the car’s year, make, serial number and the required fee. If you find a lien that the business doesn’t know about, tell the business. Once the business knows there is a lien on the vehicle, it must pay the lienholder(s) before the seller gets any money. If it’s not paid you may be responsible for paying the lien, or the creditor may be able to seize the vehicle from you. 

If you need to finance a car purchase, be sure the credit contract includes the following information:

	the complete description of the car,
	he cash selling price,
	the amount of the down payment or trade-in allowance,
	a breakdown of all costs, fees, and other charges,
	the credit charge, written out in dollars,
	the annual percentage rate of interest you'll pay,
	the amount of each payment, the number of payments, and the dates they are due, and
	the additional charges you will have to pay if you fall behind in your payments.

    Get a receipt or contract from the business. The receipt or contract should include the date of the sale; your name and address; the business’ name and address; the car's year, make, model, and serial number; the odometer reading; the price and payment method; a description of any problems the car has; and a description of any warranty coverage.