Auto Consignment Agreement Template for Canada

An Auto Consignment Agreement is a specialized contract that allows you to sell your vehicle through a licensed dealership while maintaining legal ownership until the final sale. This arrangement combines the marketing power and expertise of professional dealers with your control over pricing and sale terms, making it particularly valuable for high-end, classic, or specialty vehicles that require knowledgeable sales representation.

When do you need this document?

You need an Auto Consignment Agreement when you want to sell your vehicle through a dealership but prefer to retain ownership and control over the sale process. This arrangement is common for luxury vehicles, classic cars, or specialty automobiles where professional presentation and dealer networks can maximize sale value. The agreement is also necessary when you lack the time or expertise to market your vehicle effectively but want to avoid immediate ownership transfer to a dealer. Additionally, consignment arrangements are often preferred when you want to test market demand at a specific price point while maintaining the flexibility to withdraw your vehicle if terms aren't met.

Key legal considerations

Your Auto Consignment Agreement must clearly define the commission structure, typically ranging from 5% to 15% of the final sale price, and specify who bears responsibility for various costs including storage, insurance, and marketing. The agreement should establish the consignment period duration, your right to withdraw the vehicle, and procedures for setting and adjusting the asking price. Insurance coverage is critical – you must determine whether your existing policy covers the vehicle while on dealer premises or if the dealership's commercial insurance provides adequate protection. The contract should also address vehicle condition documentation, maintenance responsibilities during consignment, and liability for damage or theft while in the dealer's possession.

Legal requirements in Canada

Under Canadian law, your Auto Consignment Agreement must comply with provincial Motor Vehicle Dealers Act requirements, which mandate that only licensed dealers can engage in consignment sales and establish specific disclosure obligations. The Consumer Protection Act in most provinces requires clear written agreements with cooling-off periods and detailed fee disclosures. You must ensure the dealership maintains proper licensing and bonding as required by provincial authorities. The agreement must also address GST/HST implications under the federal Excise Tax Act, particularly regarding who remits taxes and how they're calculated on the final sale. Additionally, if any financing or security interests exist on your vehicle, the agreement must comply with Provincial Personal Property Security Act requirements and may require lien holder consent before consignment can proceed.