Auto Consignment Agreement Template for New Zealand

An Auto Consignment Agreement is a crucial legal document that allows you to sell your vehicle through a professional dealer while retaining ownership until the actual sale takes place. This arrangement provides you with the expertise and market reach of an established dealer without immediately transferring your vehicle's title. Under New Zealand law, this agreement must comply with multiple pieces of legislation to ensure both parties are protected throughout the consignment process.

When do you need this document?

You need an Auto Consignment Agreement when you want to leverage a dealer's expertise and customer base to sell your vehicle. This is particularly valuable if you own multiple vehicles, operate a fleet, or simply lack the time and resources to handle the sale yourself. Car dealers use these agreements to expand their inventory without purchasing vehicles outright, allowing them to offer customers a wider selection while managing cash flow. The document is essential for corporate fleet owners disposing of vehicles, individuals with high-value or specialty vehicles, and dealers looking to establish consignment programs. You also need this agreement when regulatory compliance is critical, as licensed motor vehicle traders in New Zealand must follow specific procedures when selling vehicles on behalf of others.

Key legal considerations

The agreement must clearly define the relationship between you as the consignor and the dealer as the consignee, establishing that this is a consignment arrangement rather than an immediate sale. Commission structures should be explicitly stated, including any additional fees for marketing, storage, or vehicle preparation. The document must specify the minimum acceptable sale price, duration of the consignment period, and conditions under which you can terminate the agreement. Insurance responsibilities are crucial – you need to determine who maintains coverage during the consignment period and what happens if the vehicle is damaged. The agreement should address what happens to any existing liens or security interests, and how the proceeds will be distributed upon sale. Marketing and advertising responsibilities must be clearly allocated, including who bears the cost and maintains control over how your vehicle is presented to potential buyers.

Legal requirements in New Zealand

Under the Motor Vehicle Sales Act 2003, the dealer must be a licensed motor vehicle trader to legally sell your vehicle on consignment. The agreement must comply with the Fair Trading Act 1986, ensuring all representations about the vehicle are accurate and not misleading. Consumer Guarantees Act 1993 provisions may apply depending on the nature of the parties and the vehicle being sold. The Personal Property Securities Act 1999 becomes relevant if there are existing security interests in the vehicle that need to be disclosed or managed during the consignment process. GST implications under the Goods and Services Tax Act 1985 must be considered, particularly regarding how commission payments are structured and whether GST applies to the transaction. The Contract and Commercial Law Act 2017 governs the formation and enforceability of the agreement, including requirements for clear terms and fair dealing between the parties.