OMVIC Practice Test

Must a dealer deposit money from a consignment sale into their trust account if the amount exceeds $10,000?

1. True

2. False

The correct answer is: True

In the context of consignment sales, dealers are required to adhere to specific regulations concerning the handling of client funds. If a dealer receives payment for a vehicle sold on consignment and the amount exceeds $10,000, the dealer is obligated to deposit that money into their trust account. This requirement helps to ensure that the funds are handled appropriately and are protected under regulatory guidelines. By depositing the money into a trust account, the dealer is fulfilling their fiduciary responsibility to safeguard the funds until they can be properly disbursed to the appropriate party, such as the original owner of the consigned vehicle. This practice also enhances transparency and accountability in the dealership's financial operations, ensuring that client money is kept separate from the dealer's operating funds. The regulation aims to protect consumers and maintain trust in the motor vehicle sales industry, emphasizing the importance of proper financial handling in consignment transactions.