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Follow simple steps when consigning a car to a dealer
Ask the AG
Consumer: I’m planning on selling my car and considering consigning it to a dealer. Any suggestions for how to get a fair deal?
Attorney General Rob McKenna: As the economy slides, more consumers are selling possessions and buying used. When looking to consign anything of yours that is of great value, especially a vehicle, always put the deal in writing.
How Car Consignments Work
When you consign a car, the dealer will ask how much you want for it and likely suggest a lower price. So before you even drive on the lot, you should know how much your car is worth. Check used-vehicle guides, the newspaper and the Kelly Blue Book or the National Auto Dealers Association (NADA) Used Car Pricing Guide (Pacific Northwest edition).
Let’s say you and the dealer agree on a figure of $5,000. The dealer’s job is to sell your car for no less than $5,000; anything above that is theirs to keep. The dealer will also receive a commission equal to a percentage of the car price and a fee. Now let’s assume the dealer sells your car for $7,000. Here’s what you each get:
• Your Agreed Cost – $5,000
• Price that Dealer Sells Car – $7,000
• Difference – $2,000
• Dealer Commission (10 percent of $5,000) is $500
• Dealer Fee – $50
• You Get $4,450
• Dealer Keeps = $2,550
Questions You Should Ask
Ask the dealer these important questions before you sign any paperwork:
– Who is responsible for insurance? You may be responsible for the car while it’s on the lot. So check with your insurance company in advance to make sure you’re covered for theft or damages.
– Who will pay off any liens?
– Can the dealer accept another vehicle or personal property as part of the minimum price?
– How long does the dealer have to find a buyer and what happens to the vehicle if it’s not sold in the time specified?
– What repairs will be made if needed and who pays for them?
– What specific expenses will be incurred by the dealer that may affect the seller’s payment? For example: storage, advertising, car detailing and transportation from one location to another.
Signing the Contract
When you are ready to leave your car with a dealer, the two of you should carefully write up an agreement that includes the following terms – all required by law (RCW 46.70.028, WAC 308-66-155):
– Names of the parties, including the legal owner of the vehicle.
– Location of the title and guarantee by seller that they have clear title.
– Any payoff due on vehicle.
– The agreed price to sell the vehicle.
– Date of the agreement.
– Duration of the agreement.
– A description of the vehicle, including make, model, VIN and plate number.
– Signatures of the parties.
Be sure to carefully read all of the terms of the agreement, including fees.
Do not sign over the title.
After the Sale
The dealer must do the following after selling your car:
– Pay you within 10 days of when title is delivered to the purchaser.
– Immediately provide you with a copy of the purchase order used to complete the sale.
– Transfer the title.
– Hold all funds in trust as required by law.
Following these steps should help for a smooth and easy transaction.
• Want more consumer advice? Previous Ask the AG columns are online at www.atg.wa.gov/askcolumn.aspx and be sure to check out the Attorney General’s All Consuming blog at www.atg.wa.gov/allconsuming.aspx.
Attorney General Rob McKenna offers this public service to help consumers avoid fraud and to promote a fair and informed marketplace. If you have a consumer complaint or inquiry, contact the Consumer Protection Division at www.atg.wa.gov or 1-800-551-4636 between 10 a.m. and 3 p.m. weekdays. To suggest a future topic for this column, send an e-mail to firstname.lastname@example.org or write to “Ask the AG,” Attorney General’s Office, 800 5th Ave. Suite 2000, Seattle, 98104-3188.