Auto Consignment Agreement Template for the Philippines

An Auto Consignment Agreement is a legally binding contract under Philippine law that allows you to entrust your vehicle to a professional dealer for sale while retaining ownership until the transaction is completed. This arrangement, governed by the Civil Code of the Philippines and consumer protection regulations, provides a structured approach to vehicle sales that benefits both parties through defined responsibilities and protections.

When do you need this document?

You need an Auto Consignment Agreement when selling valuable vehicles such as luxury cars, classic automobiles, or specialty vehicles that require professional marketing expertise. This document is essential when you lack the time, resources, or expertise to handle the sale directly, or when targeting specific buyer demographics that dealers can better reach. The agreement is particularly valuable for high-end vehicles where proper presentation, verification of buyer credentials, and secure transaction handling are critical. It's also necessary when you want to maintain legal protection while allowing a dealer to showcase, advertise, and negotiate the sale of your vehicle on your behalf.

Key legal considerations

Your agreement must clearly define the consignment period, minimum sale price, and commission structure to avoid disputes. Under Philippine law, you retain ownership of the vehicle until the actual sale occurs, making proper documentation of the vehicle's condition and specifications crucial for protection. The contract should specify insurance responsibilities, as the consignee typically assumes liability for damages while the vehicle is in their possession. Include detailed provisions for regular reporting requirements, allowing you to track marketing efforts and potential buyer interest. Address termination conditions, including your right to withdraw the vehicle and the dealer's obligations upon contract completion. Consider including penalty clauses for unauthorized use of the vehicle and requirements for the dealer to maintain proper storage and security.

Legal requirements in Philippines

Under the Land Transportation and Traffic Code, any vehicle sale requires proper documentation and transfer procedures through the Land Transportation Office. Your agreement must comply with Consumer Act provisions regarding disclosure requirements and warranty obligations. The National Internal Revenue Code mandates proper tax treatment of consignment transactions, including VAT implications for the dealer and potential capital gains considerations for you as the consignor. Ensure the agreement includes provisions for proper registration transfer procedures and compliance with local business permit requirements for the consignee. The contract must address anti-money laundering regulations that may apply to high-value vehicle transactions, requiring proper buyer identification and transaction documentation. Include clauses ensuring compliance with truth-in-advertising standards and consumer protection requirements when the dealer markets your vehicle.