Washington Car Consignment Rules & Dealer Requirements | 2026 Guide

Car consignment in Washington is permitted, but dealers must follow specific state rules on consignment contracts, trust accounts, title transfer, and seller payment timing. These Washington car consignment rules, dealer requirements, and best practices (updated for 2026) cover dealer licensing, written agreements, title/ownership documentation, escrow/trust account handling, insurance, buyer disclosures, and fee transparency.

Dealer License Requirements

• Only licensed Washington vehicle dealers may sell vehicles at wholesale or retail, including consigned vehicles. Dealers must obtain a vehicle dealer license from the Washington State Department of Licensing (DOL).

• Dealer license applicants must comply with build-out, bonding, signage, business hours, and recordkeeping rules set in RCW 46.70 and corresponding administrative codes.

Source: Washington DOL – Vehicle Dealers Licensing

Source: RCW 46.70 – Dealers and Manufacturers

Written Agreements

Washington law requires dealers engaging in consignment transactions to obtain a consignment contract (also referred to as a listing or agency agreement) before offering a vehicle for sale.

The consignment contract should include:

• Names of consignor (seller) and consignee (dealer)
• Vehicle description (VIN, year, make, model)
• Amount of commission and net proceeds due to the seller
• Statement regarding lienholder interests and payoffs
• Authorization for the dealer to sell on behalf of the consignor
• Terms of payment to the consignor after sale
• Signatures of both parties

Best Practice: Provide the consignor with a signed copy and retain the original in your dealership file for compliance and audit purposes.

Sample Consignment Agreement (offered by WSIADA): 

Title, Odometer & Ownership Document Handling

• In Washington, vehicles sold at retail must comply with title transfer requirements (chapter 46.12 RCW). The dealer is responsible for ensuring the title is promptly transferred into the purchaser’s name after sale.

• Federal odometer disclosure rules apply to retail sales; dealers must include and retain odometer documentation as part of the transaction record.

Best Practice: At intake, collect the seller’s title (if available), proof of ownership, and any lien documentation. Verify title location and lien status before offering the vehicle for sale.

Escrow / Seller Funding Timeline Rules

Washington has specific trust account and payout timing rules for consigned vehicles under the Washington Administrative Code:

• All funds received for a consigned vehicle — including deposits, payments in full, or proceeds from sale — must be placed in a trust account and remain there until:

  • The consignor’s interest is fully satisfied

  • All lienholder interests are satisfied.

• Commingling consignment funds with dealer assets before completion of the transaction is considered an unlawful practice.

• Dealers must pay the amount due to the consignor and any lienholder within ten (10) days following delivery of the vehicle to the purchaser. At the same time payment is made, the dealer must give the consignor a copy of the purchase order used in the sale.

Best Practice: Maintain clear trust account records, reconcile consignor funds separately, and document disbursements to the consignor and lienholder(s) within the required timeframe.

Insurance & Test Drives

• Dealers should maintain garage liability and inventory insurance covering all vehicles on their lot or during dealer-authorized test drives, including owned and consigned vehicles.

• Confirm with your insurance provider that consigned vehicles are covered under your policy for both liability and physical damage exposures.

Best Practice: Require sellers to maintain their own comprehensive coverage while the vehicle is on consignment and document this requirement in the consignment agreement. Generally, the seller's insurance covers damage and liability for "forced majeure" (Acts of God).

Disclosures & Tax Handling

• A consignment sale is defined as a transaction where the owner (consignor) enters into a written agreement with a dealer (consignee) and the dealer acts as agent for the owner.

• For tax purposes:

  • When an unregistered person consigns a vehicle for sale, the dealer collects retail sales tax and remits it on its excise tax return.

  • Dealers take a deduction for the amount of the consignment sale (the seller’s portion) and report portions of the sale and commissions under tax classifications appropriate to Washington’s Business & Occupation (B&O) tax.

Best Practice: Consult your tax advisor for correct B&O and retail sales tax reporting related to consignment transactions.

Lien Payoff Process

• If a vehicle has open loans at intake, collect lender contact info and a current payoff statement.

• Ensure your consignment contract authorizes the dealer to satisfy liens from sale proceeds and pay any lienholders from the trust account.

Best Practice: Estimate net proceeds upfront and collect any shortfall (negative equity) from the seller if payoff exceeds expected net sale proceeds.

Fee Disclosure Rules

Dealers must disclose all fees and commissions in writing to the consignor, including:

• Commission % and/or flat fees, or "above-and-beyond" floor price
• Storage/marketing charges
• Repair/reconditioning authorizations
• Administrative/document fees

Cancellation & Contract Terms

Include cancellation terms in the consignment contract, such as:

• Notice requirements
• Vehicle retrieval instructions
• Fees due upon termination
• Handling if the sale is rescinded after contract execution

Best Practice: Document processes for both voluntary cancellations and buyer/purchase agreement cancellations.

Washington Car Consignment FAQs

Can a private seller consign a car through a dealer in Washington?
Yes. A licensed Washington dealer may accept a vehicle on consignment under a written agreement. All consignment funds must be held in trust and paid within ten days after delivery to the purchaser.

What are a dealer’s payment obligations when selling a consigned vehicle in Washington?
Washington requires dealers to remit the amount due to the consignor and any lienholder within 10 days after the vehicle is delivered to the purchaser, and to provide the consignor with a copy of the purchase order used in the sale.

Do consignment funds have to be segregated?
Yes. All funds received for a consigned vehicle must remain in a trust account until consignor and lien obligations are satisfied; commingling before completion is unlawful.

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

Consumer Resource:
The Washington Attorney General’s office offers a helpful overview for sellers: consigning my car

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.