Due to supply pressures within the automotive industry over the past two years, AMVIC has seen an increase in automotive businesses consigning vehicles on behalf of consumers. Here are some FAQ’s if you are considering adding consignment sales to your business licence.
What is consignment?
A consignment is a written agreement where an automotive business sells a vehicle on behalf of a consumer. Part three of the Automotive Business Regulation (ABR) outlines legislation specific to consignment.
How do I add consignment sales to my business?
Automotive businesses can apply to add consignment sales through AMVIC Online and must submit a $300,000 security in the form of cash, a surety bond or irrevocable letter of credit. Automotive businesses must not complete consignment sales until they have been licensed to do so.
Licensed businesses that cannot provide the required $300,000 security will not meet the requirements for consignment sales. These businesses will not be permitted to conduct consignment sales in Alberta.
What is a consignment agreement?
A consignment agreement is different from a vehicle bill of sale. Although both documents include standard identifying information about the consumer, business and vehicle, a consignment agreement will also include items such as (but not limited to): the consignor’s ownership interest in the vehicle, what happens to the vehicle if it has not been sold before the agreement ends, who will insure the vehicle while it is on consignment, and the minimum amount that the consignor will receive from the business operator for the sale of the vehicle.
The business must pay the seller within 14 days after the vehicle is sold and provide the seller with a detailed statement of account, along with the payment.
Is consignment the same as agent or broker?
Consignment sales are different from an agent or broker. Agents or brokers only collect fees for their negotiation services and do not hold any vehicle inventory.
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