Maryland Car Consignment Rules & Dealer Requirements | 2026 Guide

Car consignment in Maryland is legal, but dealers must follow Maryland rules designed to protect sellers and buyers. These Maryland car consignment rules, dealer requirements, and best practices (updated for 2026) cover dealer licensing, written agreements, title handling, inspections, advertising/disclosures, lien payoff, and payout best practices.

Dealer License Requirements

• Only licensed motor vehicle dealers may legally offer vehicle consignment services and sell consigned vehicles to the public in Maryland.

• Maryland dealer licensing is handled through the Maryland Motor Vehicle Administration (MVA) Business Licensing & Compliance division.

Source: Maryland MVA – License to Sell Used Vehicles

Written Agreements

Maryland requires vehicle sale agreements to be in writing, and consignment arrangements should always be documented with a written consignment agreement to prevent disputes.

The consignment agreement should include:

• Seller’s name, address, phone, email, and vehicle details (VIN, mileage, title status)

• Dealer’s responsibilities (marketing, storage, test drives, showings, payoff timing if applicable, title transfers to buyers)

• Commission or fee structure and any seller-authorized charges (reconditioning, repairs, detail, storage, marketing)

• How and when the seller receives net sale proceeds after the vehicle is sold

• Title/ownership document handling and authority to sign/submit paperwork

• Insurance responsibilities while the vehicle is on consignment

• Terms for cancellation and vehicle retrieval

Best Practice:  Seller receives a signed copy and dealer retains the original in the deal file.

Title, Odometer & Dealer Reassignment

• Dealers should maintain a complete and compliant deal file for consigned vehicles, including proof of ownership, odometer disclosures, and required MVA forms used in non-consignment dealer transactions.

• Maryland rules for dealer titling submissions and required documents apply when the vehicle is sold to a retail buyer.

Best Practices:

• Collect and securely store the seller’s original title (or other acceptable ownership document), lien/payoff documentation (if applicable), and all required disclosure forms before the vehicle is marketed.

• Use proper dealer reassignment procedures when transferring ownership at sale.

Escrow / Seller Funding Timeline Rules

• Maryland does not publish a universal “consignment payout deadline” in the same way some states do.

• Because of that, the payout timing to the seller and/or any lienholder should be clearly defined in the written consignment agreement.

Best Practice (dealer-friendly and seller-safe):

• State the payment trigger clearly (example: “after dealer is funded by buyer or their lender”).

• State the payment method (check, ACH) and whether lien payoff/reconditioning deductions occur before seller net payout.

• Many reputable dealers remit net proceeds to seller and/or lienholder (if applicable) within 24–48 business hours after the dealer receives cleared buyer funds.

Insurance & Test Drives

• Dealers should confirm their garage liability policy covers all vehicles on their property that are not titled to the dealership (including consigned vehicles).

• The consignment agreement should clearly address:

  • Who is responsible for physical damage coverage while the vehicle is on the dealer’s premises

  • Test drive rules and liability coverage

  • Whether the seller must maintain comprehensive coverage during consignment

Best Practice:  Require proof of insurance from the seller and have the seller initial the insurance section of the agreement.

Safety Inspection Notes

Maryland has safety inspection requirements that commonly affect retail deliveries and titling/registration submissions.

Best Practice:  If a Maryland safety inspection certificate is required for the specific transaction type, ensure the inspection is completed and documented before delivery and titling submission.

Source: COMAR – Used Vehicles Sold by a Dealer (includes safety inspection certificate requirement in the dealer titling submission set)
https://www.law.cornell.edu/regulations/maryland/COMAR-11-15-14-04

Advertising, Disclosures & Buyer-Facing Rules

• Maryland dealers must avoid false, deceptive, or misleading advertising and must clearly identify the dealership in advertisements.

Best Practice:  Ensure online listings clearly reflect the vehicle’s condition, known material facts, fee structure, and any limitations or disclosures required for retail delivery. This applies to owned and consigned vehicles in dealer's inventory.

Lien Payoff Process

Vehicles with open loans can be consigned, but lien payoff must be handled cleanly to avoid title delays.

Best Practice:

• At intake, obtain:

  • Lender contact information

  • Current payoff statement with loan (or account) number, SSN.

  • Seller authorization for the dealer to coordinate payoff and release lien and title to the dealer directly.

• Identify negative equity early (payoff higher than expected net sale proceeds). If negative equity exists, collect and hold the shortfall from the seller before sale so the lien can be satisfied and the title can be released.

Fee Disclosure Rules

All fees and commissions should be clearly disclosed in writing within the consignment agreement, including:

• Commission (percentage) or flat fee

• Reconditioning/repair authorizations and caps

• Detail, storage, and marketing fees (if any)

• Documentation / administrative charges (if any)

• Any seller-paid inspection/compliance costs

Cancellation & Vehicle Retrieval

• Cancellation terms should be spelled out in the consignment agreement, including:

  • Notice requirements

  • Vehicle retrieval process

  • Any authorized storage/detail/marketing fees upon termination (if applicable)

Maryland Car Consignment FAQs

Can a private seller consign without going through a dealer?
No. Consignment sales to the public should be handled through properly licensed Maryland motor vehicle dealers.

How long does a Maryland dealer have to pay the seller after sale?
Maryland does not publish a universal consignment payout deadline. The payment timing should be defined in the written consignment agreement. Best practice is 24–48 business hours after the dealer receives cleared funds, subject to lien payoff and title release timing.

Can a car with a loan still be consigned?
Yes. As long as the dealer handles the lien payoff at closing. If the payoff is higher than the net sale proceeds (sale price minus dealer commission and fees), the seller must cover the difference so the lien can be fully satisfied.

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.