Trust accounts and consignment for Ontario dealers: when you need one and what goes in it

The trust account is the requirement small dealers hear about at registration and then mostly forget until a customer wants to put down a large deposit or a private seller asks the dealer to sell their car for them. At that moment the rule stops being paperwork and becomes a question you have to answer correctly before the money changes hands.

Where the requirement comes from

Section 25 of the Motor Vehicle Dealers Act, 2002 says every dealer shall maintain in Ontario an account designated as a trust account at a bank, a loan or trust corporation, or a credit union; deposit into it all money the regulations require to be held in trust; keep that money at all times separate from the dealer's own; and disburse it only in accordance with the prescribed conditions. The detail is in section 58 of O. Reg. 333/08, and OMVIC's trust accounts page gives the plain-language version. Where the two differ in wording, the regulation is what an inspector applies.

Who is exempt

Section 58(1) exempts a dealer registered only as one or more of: a broker, a wholesaler, an exporter, an outside Ontario dealer, a lease finance dealer or a fleet lessor. The exemption tracks the classes that don't run ordinary retail sales to the public. (Our guide to wholesaler and exporter registration covers what each class can and can't do.)

Separately, section 58(2) exempts a registered dealer who receives no money it is required to hold in trust from the obligation to maintain the account under section 25(a) of the Act. That is the provision behind the common forum answer that only deposits over $10,000 matter. It's half right: it leaves out consignment, and it is a conditional exemption tied to what you actually receive, not a reason to ignore the question. Confirm with OMVIC how it treats the exemption on your registration.

The two triggers, side by side

The consignment row is the one that catches dealers who thought the $10,000 threshold was the whole story. There is no dollar threshold on consignment money from an individual seller: every dollar the buyer pays toward that car is trust money.

The account itself: five conditions

1. Prescribed name. “Motor Vehicle Dealers Act, 2002 Trust Account” in English and “compte en fiducie prévu par la Loi de 2002 sur le commerce des véhicules automobiles” in French (s. 58(3)). OMVIC's page accepts “trust account” plus the dealer's registered name where space is short.
2. Pooled. A single pooled account unless the Registrar gives prior written consent to something else.
3. Filed. A copy of the agreement with the financial institution goes to the Registrar within five days of making it, and within five days of any change (s. 58(3)).
4. Trust money only. You may not deposit anything the regulation doesn't require you to hold in trust (s. 58(6)). No floating the account, no parking your own cash there for safekeeping.
5. Never collateral. No person may post the trust account as collateral (s. 58(12)).

You also need a separate ordinary account: section 59 requires non-trust accounts, and amounts received or paid in connection with a trade-in run through those, not the trust account, unless the money is trust money.

The monthly reconciliation, worked through

Sections 58(7) through (10) are where the account earns its keep or fails an inspection. You must keep a record, in the form the Registrar provides, of every dollar received into trust (why, which contract, who paid, how much, how and when) and every dollar withdrawn. Each month you prepare a reconciliation statement within 30 days of receiving the bank statement, unless the balance was zero at both ends of the month and nothing moved. It must name the money held for each person and reconcile the total to the bank balance, and a person with signing authority who is an owner, partner, officer, director or the individual in charge of day-to-day operations has to review it.

A hypothetical September on a small lot:

The two numbers match, so the statement reconciles. If the bank showed $30,400, you would be $1,000 short, and section 58(11) says you deposit enough of your own money immediately to close the gap. A shortfall doesn't need theft: a bank fee or a cheque written from the wrong account is enough, which is why the record shows the reason and contract for every line.

Consignment: what the contract has to carry

Section 45 requires a consignment contract to be in writing and signed by both the dealer and the other party. Where the consignor is an exempt individual, subsection (4) adds a list of what has to be in it, “in a clear, comprehensible and prominent manner,” and OMVIC's consignment page walks through the same items. Use this as a pre-signing checklist:

1. Consignor's name and address
2. Your registered business name, registration number and, if different, your real name
3. Make, model, model year and colour
4. Vehicle identification number
5. Body type
6. For a used vehicle, the total distance driven if you can determine it — otherwise the past-date distance with the “believed to be higher” statement, or the “unknown” statement
7. The total amount you will charge, as a fixed amount or a commission share, with every component itemized
8. An estimated selling price and a minimum selling price
9. The term, and how it can be extended or that it cannot be
10. Early-termination conditions and any fees
11. An explicit statement that it is a consignment sale
12. All restrictions, limitations, conditions and obligations on the consignor, stated prominently (s. 45(5))
13. Both signatures, with a salesperson signing for you if they act on your behalf

Then the delivery rules: the consignor gets a copy of the contract immediately after signing; you use best efforts to get the consignor's used vehicle information package if one is required; the vehicle must be clearly indicated as a consignment when offered for sale (s. 45(7)); and you use best efforts to ensure both the consignor and the purchaser promptly receive a copy of the sales contract (s. 45(8)). The paperwork goes in the deal file like any other; see our deal file checklist and record retention guide for how long you keep it.

A note from the lot floor

We run two small Ontario lots, and the trust account is the one piece of the rulebook that can't be fixed after the fact. A late garage register entry can be caught up. But money you were required to hold separately and didn't — because it landed in the operating account next to the rent — is a problem the moment it moves. The habit that solves it is boring: decide at the time of the deposit whether it is trust money, say it out loud, and write the reason down next to the amount.

Why this matters beyond the audit

OMVIC's freeze order page explains that in serious circumstances OMVIC can freeze a dealer's assets or trust funds without notice, to protect customers. You are unlikely to meet that, but the reason it exists is the reason the account exists: a buyer's money is the one thing in your business that isn't yours yet. Reconciliation is also a natural fit for the habits described in where the money actually goes missing, and for a deal file where each deposit is tied to a contract instead of a text message. See how Lot Jacket keeps that record, or check yourself with the two-minute audit self-check.

Book a free 15-minute demo and bring a real deal file. We'll show you where a deposit and its contract live together.

This guide summarises O. Reg. 333/08, the Motor Vehicle Dealers Act, 2002 and OMVIC's published guidance as read on 2026-09-21. Regulations are amended and OMVIC's plain-language pages can differ in wording from the regulation; confirm the current text and your own registration's treatment with OMVIC, and speak to an accountant or lawyer before relying on it. The reconciliation is a hypothetical. This guide is general information, not legal or compliance advice.