Arizona Car Consignment Rules & Dealer Requirements | 2026 Guide

Car consignment in Arizona is legal and defined under Arizona’s motor vehicle statutes, but it is governed by specific requirements around consignment contracts, dealer disclosures, title handling, and lien satisfaction. These Arizona car consignment rules, dealer requirements, and best practices (updated for 2026) help dealers and sellers stay compliant when offering vehicles for sale on consignment.

Dealer License Requirements

• Only licensed Arizona motor vehicle dealers may legally sell vehicles to the public, including vehicles offered on consignment. Dealers must obtain the appropriate dealer license from the Arizona Department of Transportation (ADOT) Motor Vehicle Division (MVD).

• Licensing options include used motor vehicle dealer and public consignment auction dealer categories.

• Applicants must submit required documents, including bond requirements, background checks, and transaction privilege tax licensing, as part of the dealer application process.

Source: ADOT MVD – Motor Vehicle Dealer Licensing

Source: Arizona Dealer License Types and Requirements

Written Agreements

Arizona law explicitly defines consignment contracts and requires specific terms in them:

• Dealers who offer a vehicle on consignment must prepare a written dealer consignment contract.

• A valid consignment contract must include:
  • The heading “Dealer Consignment Contract”
  • Dealer name, dealer license number, business address, and contact info
  • Owner name, address, and identification info
  • Vehicle details (VIN, year, make, model, plate)
  • Lienholder information and lien balance, if applicable
  • Owner’s representation that disclosed liens are accurate
  • Owner’s authorization permitting the dealer to sell the vehicle at an agreed minimum price
  • Dealer’s obligation to tell every prospective purchaser that the vehicle is “on consignment”
  • Dealer’s obligation to satisfy all disclosed liens upon receipt of sale proceeds
  • Agreement on dealing with title reassignment and contract expiration/termination
  • Signatures of both dealer and owner.

• Arizona regulations require that the consignment contract be kept on file at the dealer’s established place of business for three years after expiration, termination, or sale.

Best Practice: Provide a signed copy to the seller and retain the original with your deal file.

Title, Odometer & Power of Attorney Handling

• Arizona Revised Statutes allow a dealer to offer and sell a motor vehicle on consignment without the title physically in the dealer’s possession if the dealer has:

  1. A valid consignment contract or dealer acquisition contract,

  2. The most recent registration card, and

  3. A lienholder statement disclosing all unsatisfied liens.

• Odometer disclosure requirements must be met for retail sales, and dealers should follow standard odometer reporting when applicable.

Best Practice: Keep title-related documents, lien paperwork, and consignment contracts in the dealer file to support title transfers after sale.

Escrow / Seller Funding Timeline Rules

Arizona does not mandate specific payout deadlines for consigned vehicles. Instead, the timing and conditions for seller remittance should be defined in the written consignment agreement.

Best Practice:

• Specify in the contract how and when net sale proceeds are paid to the seller and/or the lienholder, if applicable (e.g., upon buyer funding clearance).

• Include any permissible deductions (commission, authorized repairs and reconditioning, storage, special marketing expenses, etc.) and tie the payout trigger to clear contractual terms.

To protect both parties, the dealer agreement should clearly state the payment timeline. Many reputable dealers remit net sale proceeds to sellers within 24–48 business hours after the dealer has been funded by the buyer or the buyer’s lender.

Insurance & Test Drives

• Dealers must maintain appropriate garage liability and inventory coverage that applies to both owned and consigned vehicles while at the dealer’s location.

• Clarify in the consignment agreement which party’s insurance is primary for test drives and liability (dealer vs. seller) and which insurance coverage addresses "forced majeure" (Acts-of-God), usually the seller's policy.

Best Practice:  Require proof of comprehensive insurance from the seller during the consignment period and document it within the agreement.

Lien Payoff Process

Vehicles that have open loans may be consigned, but Arizona law requires that consignment contracts disclose lienholder information and that liens be satisfied or assumed upon sale.

Best Practice:

• Secure lender contact details and a current payoff statement at intake.

• Disclose negative equity scenarios to the seller and collect any shortfall upfront if necessary so liens can be resolved promptly after sale.

Fee Disclosure Rules

Arizona law requires that dealer agreements disclose all fees and commissions clearly to the seller. Common fee categories include:

• Dealer commission or flat fee

• Reconditioning/repair authorizations

• Storage/marketing fees

• Administrative/document fees

Cancellation & Contract Terms

• Contracts should state how consignment can be terminated by either party, notice requirements, return of the vehicle, and any fees due on termination.

• Include terms for vehicle retrieval, expense responsibilities, and how long the consignment period remains active.

Best Practice: Use clear, plain language to avoid disputes later.

Public Consignment Auction Dealer Notes

Arizona law also defines a public consignment auction dealer license category. These dealers hold auctions for the public and must provide written notice to ADOT and the Department of Revenue within 15 days after selling a vehicle. Failure to provide this notice can result in penalties.

Arizona Car Consignment FAQs

Can a private seller consign a car through a dealer in Arizona?
Yes — as long as the dealer is licensed, follows the consignment contract content requirements, and complies with title and lien disclosure rules.

What must a dealer disclose about consigned vehicles?
A dealer must inform every prospective buyer that the vehicle is being sold on consignment.

Can a vehicle be sold without the title in the dealer’s possession?
Yes, if the dealer holds the required consignment contract, registration card, and lienholder statement.

Want more general answers about selling or consigning a car?
Visit Retail My Ride’s full FAQ center

Last reviewed: January 2026

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⚠️ Important Notice

This page is provided by Retail My Ride for general informational purposes only. It is not legal advice. Car consignment laws and dealer requirements may change at any time. Always confirm the latest rules with your state DMV, licensing authority, or qualified legal counsel before making decisions.