How do I assess an RV dealership’s consignment unit agreements?

Consignment can add choice to a lot without adding cost, but only if the paperwork is clean. Request the signed agreement for each consigned RV and a list of the units on site. Anything on the lot without an agreement, or with an agreement that has expired, should be explained in writing before you move on.

Read the terms for what they say about payment timing. Does the dealer owe the owner on sale, within a set period or only after the dealer’s own funds arrive? Check for sold units where the owner has not yet been paid, since that is money you may inherit. Also look at who is responsible for damage, insurance and reconditioning while the unit is in the dealer’s care.

Ask how often consigned units sell compared with owned ones, and how the dealer decides which to accept. A habit of accepting anything may fill the lot with slow movers. Ask how consigned units appear in the books so they do not inflate the stock figure. Your lawyer can review whether the agreements allow assignment to a new owner or require the consignors’ agreement, and your accountant can verify how the amounts owing are recorded.

Key takeaways

• Match each consigned unit to a signed, current agreement.
• Check for sold units where the owner has not been paid.
• Ask whether the agreements can pass to a new owner, and have your lawyer read them.