What is an automotive consignment business?
A consignment business sells vehicles on behalf of consumers, as per a signed consignment agreement. Your relationship with an automotive consignment business can be as the consignor, the buyer or both.
Consignor: You are selling your vehicle through a consignment business and have entered into an agreement with the business to sell your vehicle on your behalf, for a fee.
Buyer: You are purchasing a vehicle that has been consigned. Meaning, you are buying a vehicle that a consignment business is selling on someone else’s behalf.
Consignment businesses must be licensed by AMVIC—it’s the law. Search AMVIC’s database of licensed businesses to be sure.
When consigning your vehicle, the business must:
- Provide you with a written consignment agreement. (Automotive Business Regulation, section 33(1)(2).) There are a number of items that must be included in the agreement including the businesses’ fees and commissions, who is responsible for insuring the vehicle and the authorized repairs. Here is an example of a consignment sales agreement form.
- Pay you the proceeds of the consignment sale within 14 days of selling the vehicle. (Automotive Business Regulation, section 33(3)(c).) The business must also pay any lienholders if the vehicle is subject to a lien.
- Provide you with a detailed statement of account. The statement of account must include the amounts required to pay out any outstanding liens on the vehicle, a description of any vehicle or other personal property received, and the value assigned to the vehicle and/or property and the amount payable to you. (Automotive Business Regulation, section 33.1(2).)
As the buyer of a consigned vehicle you will want to take the same steps you would if you were purchasing a used vehicle. This includes:
- Insisting on an independent inspection.
- Looking up the dealer to ensure it is licensed by AMVIC.
Questions? Concerns? Or suspect you are dealing with an unlicensed, illegal automotive business? Contact AMVIC’s consumer services team.