Car consignment: how it works for Australian dealers
Car consignment means you sell a car on the owner's behalf and take a fee or commission, instead of buying it. The owner keeps title until a buyer pays, and in most states the sale money must go through a trust account before you take your cut. Victoria is the big exception: licensed traders there can't sell on consignment for private owners at all.
- You sell the car for the owner and earn a flat fee, a percentage, a tiered rate or a margin over an agreed reserve.
- QLD, NSW and WA require consignment money to go through a trust account. WA also needs Category E on your licence.
- Victorian licensed traders must not sell cars on consignment for private owners (public auctions and trader to trader are outside the rule).
- The main risks are finance owing on the car, unclear title, and mishandling the seller's money.
What car consignment is
On consignment, the car stays the owner's property while you market it, show it and sell it. You never pay for it. When it sells, the buyer's money comes to you, you pay out any finance, deduct your agreed fee and costs, and pay the owner the balance.
For a dealer that means stock without tying up capital. For the owner it usually means a higher price than a trade-in, without dealing with tyre-kickers. If you're weighing up whether to consign or buy a particular car, see consignment vs selling outright.
How it works, start to finish
| Step | What you do |
|---|---|
| 1. Enquiry | Owner contacts you. Capture the car, rego or VIN, kilometres, finance owing and what they want for it. |
| 2. Inspection and appraisal | Inspect the car, photograph it, and set a realistic price range from live comparable listings. |
| 3. Checks | Verify ownership and run a PPSR search for finance, written-off and stolen status. |
| 4. Agreement | Sign the consignment agreement in your state's required form (in QLD, the approved Form 9) before you provide any service. |
| 5. Prep and list | Agreed recon, photos, listing. Advertise with any wording your state requires. |
| 6. Offers and price changes | Relay offers to the owner. Only change the asking price on their written instruction. |
| 7. Sale | Contract with the buyer, deposit and balance received into trust where required. |
| 8. Settlement | Pay the financier first if there's finance owing, then your commission and agreed costs, then the owner, with a written settlement statement. |
How dealers get paid
There are four common ways to charge. The figures below are examples, not market rates; see consignment commission rates for full worked tables.
| Model | How it works | Example on a $25,000 sale |
|---|---|---|
| Flat fee | A set dollar amount per car | $1,500 fee, owner gets $23,500 |
| Percentage | A percentage of the sale price | 6% = $1,500, owner gets $23,500 |
| Tiered | Different rates on different price bands | 8% on the first $10,000 plus 5% on the rest = $1,550 |
| Margin over reserve | Owner gets an agreed net amount; you keep anything above it | Owner net $23,000, you keep $2,000 |
Whatever the model, write it into the agreement before you start. In QLD, commission can't be increased after signing or calculated on more than the actual sale price. WA's regulator has flagged that the margin-over-reserve model can tempt dealers to give owners low price estimates, so be ready to show how you set the reserve.
Run your own numbers with the consignment commission calculator.
The rules, state by state
Consignment is regulated by each state's dealer law. Here's what the official sources say, as at October 2026. Where we couldn't confirm a rule, we say so.
| State | What applies |
|---|---|
| QLD | Allowed. Approved Form 9 signed before any service, trust account required, no trade-ins on consignment sales, no-cooling-off wording on ads and cars. See Form 9 and trust account rules. |
| NSW | Allowed. A division of the Motor Dealers and Repairers Act 2013 deals with sales on consignment: section 90 requires a trust account for consignment money, section 91 requires the sale money to be banked into it by the next business day, section 92 limits what that money can be used for (paying the consignor and a few other set purposes), and section 94 requires you to account to the consignor within 14 days unless another period is prescribed. NSW Fair Trading has said consigning without a trust account breaches section 90. |
| VIC | Licensed motor car traders must not sell, offer to sell, or hold a car to sell by consignment for someone who isn't a licensed trader (Motor Car Traders Act s 36(2), up to 100 penalty units). Consignment between licensed traders, and cars sold at public auction, fall outside the rule. |
| WA | Allowed with Category E on your dealer licence (since 1 March 2023). Open a consignment trust account before accepting a car, use a written contract, and pay the owner's net proceeds within two business days of receiving payment. |
| SA | Owners who left a car on consignment with a licensed dealer and can't recover money owed can claim on the Second-hand Vehicle Dealers Compensation Fund. Check trust and agreement requirements with Consumer and Business Services. |
| TAS, ACT, NT | We couldn't confirm specific consignment provisions from official sources. Check with your licensing regulator before you take a car on. |
The risks to manage
- Finance owing. A car with a registered security interest can't be sold clean until the lender is paid out. Capture the lender and payout figure at intake and pay them first at settlement. See selling a car under finance.
- Title. Make sure the person signing actually owns the car. Ask for proof of ownership and photo ID, and check the VIN against the PPSR certificate.
- Trust money. In states with trust account rules, the owner's money is never yours to run the business on. Mixing it with your operating account is the fastest way to lose your licence.
- The car while you hold it. Agree in writing who insures it, who can drive it, and what happens if it's damaged on your lot.
- Owner pulls out. Spell out the term, any marketing or early withdrawal fee, and how recon you've paid for gets recovered.
Running consignment in software
Consignment has more moving parts than a bought car: an owner to update, price changes to get approved, trust money to track and a settlement statement at the end. A general used car DMS treats every car as owned stock. Our consignment software keeps each owner's agreement, approvals, ledger and payout on the car's file.
How to take a car on consignment as a dealer
- Capture the enquiryRecord the owner, the car, rego or VIN, kilometres, expected price and any finance owing.
- Inspect and price the carInspect and photograph the car, then set a price range from live comparable listings.
- Check ownership and the PPSRVerify the owner's ID and proof of ownership and run a PPSR search on the VIN.
- Sign the agreementSign the consignment agreement in your state's required form before providing any service. In QLD this is Form 9.
- Prepare and list the carComplete agreed recon, take photos and list the car with any advertising wording your state requires.
- Sell and settleBank the buyer's money into trust where required, pay any financier first, deduct your agreed fee and costs, and pay the owner with a settlement statement.