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This guide provides essential information for dealers looking to offer car consignment services in New York. Understanding these requirements helps ensure compliance with state regulations.
Car consignment in New York is legal, but dealers must follow clear rules and best practices. These New York car consignment rules, dealer requirements, and best practices (updated for 2025) cover written agreements, letters of consignment, title & odometer handling, lien payoff & ELT, insurance, fee disclosure, and consignment-specific registry rules.
Only licensed New York motor vehicle dealers may legally consign and sell vehicles.
Private individuals may not legally operate consignment of vehicles unless licensed as a dealer.
The New York DMV regulates licensing and compliance under Vehicle and Traffic Law, and the associated regulatory codes.
Dealers must carry any required surety bond or licensing guarantee as mandated by NY statutes. (Specific bond amount depends on dealer type—used, retail, etc.)
Source: Open a Dealership | NY DMV
Source: New York Dealer Manual - Regulations CR-78 - PDF
Source: New York DMV - Dealer Forms and Publications
A written consignment agreement or letter of consignment (NY Code of Rules & Regs Title 15 § 78.40) is required. The letter and agreements should include:
Owner’s name and contact information, vehicle details (year, make, model, VIN) and proof of ownership.
Price the vehicle owner will accept.
Statement that the dealer has authority to sell the vehicle.
Dealer’s responsibilities (marketing, storage, test drives, negotiating sale).
Vehicle eligibility criteria and requirements (condition, safety, inspections, other).
Commission or fee structure.
Timing and process for seller funding once the vehicle is sold. (NY law does NOT appear to set a specific deadline; governed by agreement)
How an outstanding lien will be paid, if applicable.
Terms for cancellation.
Seller’s insurance requirements while on consignment.
Requires signatures by both parties. Provide seller with a copy; dealer keeps the original.
Best Practice: Maintain a registry or “book of registry” as required by NY regulation upon accepting consignment, showing vehicle details and consignment terms.
Under 15 NYCRR § 78.40, a “letter of consignment” must be provided by the owner. This identifies the vehicle (year, make, model, VIN), indicates the accepted price, and states dealer’s authority to sell (Linked below)
Upon accepting the vehicle on consignment, the dealer must enter acquisition in the required book of registry (NYCRR § 78.40). (Linked below)
Source: NY Code of Rules & Regs Title 15 § 78.40
A Secure Power of Attorney used in NY must meet DMV standards. General or Secure POA may be used depending on the transaction type.
The POA must contain: date issued, name/address of agent, name/address/signature of principal. Must be notarized. The agent must sign “P.O.A.” next to signature on DMV forms.
Odometer disclosure is required under federal and New York law. Unlike other states, no explicit exemption for older vehicles is identified in §78.40 — best practice is to disclose mileage on all consigned vehicles.
Source: NY DMV - Power of Attorney for Vehicle Transactions
Best Practice: Dealer retains copies of POA, proof of ownership, and store both seller’s title proof and all documents related to title transfer securely.
New York does not mandate a statutory deadline for payment to consignors after sale for consignment specifically. Timing is controlled by the consignment agreement.
Best Practice: Include a payment timeline in the consignment agreement. Dealers often remit funds within a short business period after title transfer and buyer funding, commonly 24-48 hours once funds are cleared.
Dealers must maintain liability insurance covering their operations and consigned vehicles per NY law/regulations.
Sellers should confirm whether their personal insurance or policies remain responsible until title or registration has transferred.
Dealers are responsible for any authorization or required inspections when vehicles are taken for test drives.
Best Practice: Require “owned and consigned” coverage in dealer's insurance policy, include insurance section in consignment agreement, verify with insurance agent, keep copies of proof of coverage.
Clear insurance coverage and test drive responsibility are key best practices in New York car consignment dealer requirements, protecting both the seller and the dealer.
NY DMV allows lienholders to file liens; notices of lien must be on title or registration applications. NY DMV - Adding and Removing a Lienholder
Under 15 NYCRR § 20.17, when a lien is satisfied, the lienholder shall submit notice showing satisfaction, then the title holder or designee may apply for a duplicate title or title without lien. Legal Information Institute
Best Practice: At intake, obtain lender contact info, current payoff statement, and written authorization to pay lien at sale. If negative equity exists, collect shortfall from seller upfront and hold in trust until the vehicle sells.
All fees and commissions must be clearly disclosed in writing.
Disclose flat fees, percentage based commissions, reconditioning costs, storage/ad service or marketing fees.
Sellers should have clear terms for cancellation in the agreement.
Any retrieval fees or dealer costs upon cancellation should be disclosed.
Can a private seller consign without going through a dealer?
No. Only licensed New York dealers may legally consign vehicles.
How long does a New York dealer have to pay the seller after sale?
No statutory deadline; payment timeline must be stated in the written agreement. Many dealers follow short periods after funds and title transfer (e.g. 24-48 business hours).
Can a car with a loan still be consigned?
Yes, as long as the dealer handles lien payoff and ensures proper title transfer via DMV and lienholder protocols.
Last reviewed: September 2025
Once you understand the consignment requirements in New York, the next step is putting them into practice. Retail My Ride connects licensed dealers with motivated consign-ready sellers, helping you stay compliant while growing your inventory.
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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.
This information is provided for general reference only. Laws and regulations change frequently. Always consult with legal counsel and verify current requirements with your state's DMV or regulatory authority before offering consignment services.
Learn more through our Articles, Common Questions, Testimonials, About Us, and Which Vehicles Are Best Suited for Consignment.
