Accepting a vehicle on consignment
•You’ll ensure the vendor has signed an agreement with you authorising you to sell the vehicle on their behalf, and specifying the minimum acceptable net selling price, and the commission payable in the event of a sale together with any other costs or charges – see Legislative Requirements;
•You’ll create the stock card for the vehicle – see Consignment Stock Card;
What events may occur whilst a vehicle is on consignment?
•You may charge your customer a Listing Fee to accept the vehicle for sale on consignment;
•You may directly invoice your customer for overhead type costs in relation to accepting the vehicle on consignment, such as Advertising etc – see Fixed Expenses;
•You may incur a cost in relation to the vehicle that is to be reimbursed by the vendor – see Recoupable Reconditioning;
•You may incur a cost in relation to the vehicle that is not to be reimbursed by the vendor – see non-recoupable Reconditioning;
•You may return the vehicle to the vendor unsold – see Return to Vendor;
•You may sell the vehicle on the vendor’s behalf – see Consignment Sale.
Vendor transactions can include any transaction where you owe money to the vendor, or the vendor owes money to you. You might charge vendors a Listing Fee to cover such costs as advertising, cleaning etc. Additionally, when the vehicle is sold, you'll create a Vendor Transaction that accounts for the Sale Price less commission and any other costs. |
Why are there 2 types of Reconditioning?
All costs applied to a stock card are referred to and treated as reconditioning regardless of the actual type of cost entered. Consignment reconditioning can be specified as Recoupable or otherwise indicating whether the vendor is going to reimburse you for this cost. The cost of reconditioning that is not recoupable will be absorbed by the dealer from either the commission payable by the vendor, or any add-on extras sold to the customer. The Recoupable Consignment Expense flag is only visible when the line item in focus relates to a Consignment stock card. |
What events may occur as a result of the sale of a vehicle on consignment?
•The customer may place a deposit on the vehicle ;
•You may negotiate to sell the customer other add-on items over and above the sale price of the vehicle;
•The customer may request a Tax Invoice be issued in respect of their purchase.
What happens after the sale of a vehicle on consignment?
•The customer’s payment will be banked into the Trust Account;
•You’ll generate an invoice to the vendor accounting for the Sale price, less the Commission – see Vendor Transactions;
•From the Trust Account you’ll pay the vendor the proceeds of the Sale price less commission, and less any other reimbursable items – see Vendor Payments;
•From the Trust Account you’ll pay the commission on the Sale and any other reimbursable items withheld from the Sale price back to yourself as dealer – see Vendor Payments;
•The Trust account must come back to a neutral position following all receipts and disbursements for that vehicle sale have been processed;
•You’ll analyse the profit from the proceeds of the Sale – see Consignment Profit tab.