Many people want to sell their car but don’t want the hassle of posting a private ad or taking strangers for a test drive. It can be time-consuming and frustrating. For some, the answer is consignment: giving the vehicle to a dealer to sell but retaining ownership until the sale takes place. Consignment sales are especially common with unique vehicles such as motorhomes or classic cars.

Consumers who consign vehicles to an OMVIC-Registered Dealer are protected by OMVIC and the Motor Vehicle Dealers Act. This means the dealer must have a contract with the consigning consumer that lays out specific information including an estimate of the selling price and the lowest price the consumer is willing to accept. The agreement must also outline how much the dealership will make on the sale (often a percentage).

Contracts for Sales on Consignment

The dealer must ensure the consignment contract is in writing and is signed by both the dealer and the consignor.

If the consignor is “an individual exempt from registration” (for example, an individual consigning their personal or family car, a lawyer winding up an estate, etc.), the contract must show in a clear, comprehensible and prominent manner:

1. Consignor’s name and address.
2. Dealer’s registration number and registered name (and legal name if different from registered name).
3. The make, model, trim level, model year, colour, Vehicle Identification Number (VIN) and body type of the vehicle.
4. If the vehicle is a used vehicle, the total distance the vehicle has been driven.
5. If the vehicle is a used vehicle and the dealer cannot determine the total distance the vehicle has been driven, but can determine a distance the vehicle has been driven as of some past date, a statement of that distance and date, together with a statement that “the total distance the vehicle has been driven is believed to be higher.”
6. If the vehicle is a used vehicle and the dealer cannot determine the total distance the vehicle has been driven, or a past distance/date, a statement that “the total distance the vehicle has been driven is unknown and may be substantially higher than the reading shown on the odometer.”
7. The total amount that the dealer will charge the consignor on the sale of the vehicle (whether as a fixed amount or a commission share), and an itemized list of all components of those charges.
8. An estimate of the selling price of the vehicle and a minimum selling price of the vehicle.
9. The term of the contract (and if applicable, how parties can extend it, or a statement they cannot extend it).
10. If the contract can be terminated before its term expires, the conditions regarding such early termination (including fees, if any, payable for early termination).
11. All restrictions, limitations, conditions and other obligations imposed on the consignor under the contract (stated in a clear, comprehensible and prominent manner).

The dealer must advise the seller immediately when the vehicle is sold, and must provide the name and address of the final purchaser. Dealers are also required to hold all funds received on a consignment sale in a trust account.

Consignment sales may not be common, but many dealers do offer the service. Consumer who consign a vehicle through a registered dealer are also protected by the Motor Vehicle Dealers Compensation Fund.

To learn more, visit omvic.ca. 

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