Motor Vehicles; Dealer Licensing Law; Sale on Consignment

April 6, 1977

Subject:

Requested By:

J. G. Wilson, Director, License and Theft Section Division of Motor Vehicles

Questions:

(1): If an individual enters into a contract with Owner to Owner Sales Lot and his vehicle is placed on the lot on a "consignment plan":
(a): does Owner to Owner Sales Lot have to have in their possession the title to the vehicle; and
(b): must the title be reassigned from the individual to Owner to Owner Sales Lot?
(2): If Owner to Owner Sales Lot only rents space for an individual to place his vehicle on their lot and does not enter into any negotiations for the sale of the vehicle, must Owner to Owner Sales Lot take title to the vehicle and keep records as required by G.S. 20-82?

Conclusions:

(1): If the vehicle is on consignment, the title must be with the vehicle but need not be assigned to Owner to Owner Lot if it is in possession of a properly executed power of attorney.
(2): No, if Owner to Owner only rents or leases space and the motor vehicle is appropriately signed as to owner and Owner to Owner Lot does not assist in sale.

By way of explanation, the term "Owner to Owner Sales Lot" is of recent origin. Such term attaches to those lots where spaces are leased to owners of vehicles for display for the purpose of sale; i.e., the owner of the vehicle places the vehicle on the lot with appropriate signs indicating where he may be reached for information as to price, etc. The lessor of the spaces takes no part in the sale of the vehicle.

As to conclusion (1), if Owner to Owner Lot is selling cars on consignment, it would have to be licensed as a dealer. See. G.S.20-286(13) and (16).

Rufus L. Edmisten Attorney General

William W. Melvin Deputy Attorney General