Titus-Will Ford Sales, Inc. appeals a judgment for replevin [repossession] of a 1990 Ford pickup truck that Titus-Will had previously sold to dealer/broker James Wilson. Upon consideration of the entrustment provisions of the Uniform Commercial Code, we agree that Titus-Will must bear the burden of loss of payment for the vehicle. Accordingly, we affirm the judgment in favor of Michael Heinrich, a third party bona fide purchaser for value.

   In 1989 Michael Heinrich wished to buy a particular model new Ford pickup truck. James Wilson held himself out as a dealer/broker, licensed to buy and sell vehicles. Heinrich retained Wilson to make the purchase, but did not direct Wilson to any particular automobile dealer. Unbeknownst to Heinrich, Wilson had lost his Washington vehicle dealer license the previous year.

   Wilson negotiated with Titus-Will for the purchase of a Ford pickup truck with Heinrich’s desired options. Titus-Will had been involved in hundreds of transactions with Wilson over the years and also was unaware that Wilson was no longer licensed to act as a vehicle dealer.

   Heinrich made two initial payments to Wilson: an $1,800 down payment and a $3,000 payment when Titus-Will ordered the truck. Wilson gave Heinrich a receipt using a ‘‘Used Car Wholesale Purchase Order’’ that displayed Wilson’s alleged vehicle dealer license number. Wilson then ordered the truck from Titus-Will, using his own check to make a $7,000 down payment. The purchase order indicated the truck was being sold to Wilson. ‘‘Dealer’’ was written in the space on the form for tax. Wilson told the Titus-Will salesman handling the sale that he was ordering the truck for resale.

   On October 13, 1989, Wilson told Heinrich the truck was ready for delivery. Heinrich paid Wilson $15,549.55 as final payment, including tax and license fees. Wilson gave Heinrich a copy of the purchase order and of an options checklist with corresponding prices. These documents indicated that Wilson was buying the truck from Titus-Will. The Titus-Will salesman had signed off on the options list; Wilson marked it ‘‘paid in full’’ and signed it after Heinrich paid him. On the same day, at Wilson’s behest, Heinrich signed a Washington application for motor vehicle title.

   Wilson agreed to deliver the truck to Heinrich at Titus-Will on Saturday, October 21, 1989. He arranged with a Titus-Will salesman to deliver a check on the morning of October 21 to a clerk in the Titus-Will office and, in return, to receive the truck keys and paperwork. The clerk accepted Wilson’s check for $11,288.00, post-dated to Monday, October 23, 1989, and delivered Wilson a packet containing the keys to the truck, the owner’s manual, an odometer disclosure statement, and a warranty card. The odometer statement, which Wilson and the Titus-Will salesman signed, showed Wilson as the transferor. Titus-Will did not fill out the warranty card with the name and address of the purchaser because the sale appeared to be dealer to dealer, with the warranty to benefit the ultimate purchaser.

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   Wilson immediately taped Heinrich’s application for title in the rear window of the truck that was parked on the Titus-Will lot. When Heinrich arrived, Wilson gave him the keys and documents and Heinrich drove off in the truck.

   Wilson’s check did not clear. Titus-Will demanded return of the truck. On November 6, Wilson picked up the truck from Heinrich, telling him he would have Titus-Will make certain repairs under the warranty. Wilson returned the truck to Titus-Will.

   On November 9, 1989, Wilson admitted to Heinrich that he did not have funds to cover his check to Titus-Will and that Titus-Will would not release the truck without payment. Heinrich then asked Titus-Will for the truck; it refused. By a pretrial arrangement, Heinrich regained possession of, but not clear title to, the truck on April 1, 1990.

   Heinrich sued Titus-Will and Wilson, seeking replevin of the truck and damages for his loss of use. Heinrich obtained a default order against Wilson. After a bench trial, the court awarded Heinrich title to the truck and $3,050 in damages for loss of its use.

   On appeal, Titus-Will argues that the trial court erroneously applied the entrustment doctrine of [UCC] 2–403; ***

The Entrustment Doctrine 

[UCC] 2–403(2) and (3) contain the entrustment provisions of the Uniform Commercial Code (UCC).

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   To prevail under this statute, Heinrich must show (1) Titus-Will ‘‘entrusted’’ the truck to Wilson and, thus, empowered Wilson subsequently to transfer all rights of Titus-Will in the truck to Heinrich; (2) Wilson was a merchant dealing in automobiles; and (3) Heinrich bought the truck from Wilson as a ‘‘buyer in ordinary course of business.’’ [Citations.]

   Three general policies support [§]2–403(2), the UCC provision placing the risk of loss on the entruster. First, it protects the innocent buyer who, based on his observation of goods in the possession of a merchant of those goods, believes that the merchant has legal title to the goods and can, therefore, pass title in the goods to another. [Citation.] The statute carries forward the pre-Uniform Commercial Code law of estoppel under which an owner, who clothes a merchant with apparent ownership of or authority to sell goods, is estopped from denying such authority as against one buying the goods from the merchant in good faith. [Citations.]

   Secondly, the entrustment clause reflects the idea that the entruster is in a better position than the innocent buyer to protect against the risk that an intermediary merchant will not pay for or not deliver the goods. [Citations.]

   Thirdly, the entrustment clause facilitates the flow of commerce by allowing purchasers to rely on a merchant’s apparent legal right to sell the goods. [Citations.] Without the safeguards of the entrustment provision, a prudent buyer would have to delay the finalization of any sizeable sales transaction for the time necessary to research the merchant’s ownership rights to the goods.

Entrusting
The UCC definition of ‘‘entrusting,’’ contained in 2– 403(3), is broad. [Citation.] The statute declares that ‘‘any delivery and any acquiescence in retention of possession’’ constitutes entrustment. 2–403(3). A person can entrust goods to a merchant by a variety of methods, such as consigning them, creating a bailment, taking a security interest in inventory, leaving them with the merchant after purchase, and delivering them for purposes of repair. [Citations.] A sale can also constitute an entrustment when some aspect of the transaction remains incomplete. [Citations.]

   Titus-Will properly concedes that it entrusted the truck to Wilson. However, it argues Wilson was not a merchant and Heinrich was not a buyer in ordinary course. Further, Titus-Will contends that the timing of the entrusting deprived Wilson of the power to transfer its rights.

Merchant
Titus-Will argues that Wilson was not a merchant because he had no inventory. However, it is not necessary to possess an inventory to fit within the broad statutory definition of merchant. Article 2 of the UCC defines (in part) ‘‘merchant’’ as ‘‘a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction.’’ 2–104(1). Wilson was a merchant who dealt in automobiles; he held himself out as a dealer in automobiles and appeared to be a dealer in automobiles. Both parties treated him as one. Titus-Will processed all the documents as it would for a dealer and understood that Wilson was buying the truck for resale.

   Titus-Will also argues that Wilson was not a merchant because he did not have a vehicle dealer license. However, the UCC does not require proper state licensing for merchant status. 2–104(1), 2–403(2). * * *

Buyer in Ordinary Course 
There is also substantial evidence that Heinrich was a ‘‘buyer in ordinary course of business’’ although the trial court referred to him as a ‘‘good faith purchaser for value.’’ A buyer in ordinary course of business is

a person who in good faith and without knowledge that the sale to him is in violation of the ownership rights or security interest of a third party in the goods buys in ordinary course from a person in the business of selling goods of that kind[.] 1–201(9). ‘‘Buying’’ includes receiving goods * * * under a pre-existing contract for sale.’’ 1–201(9). Good faith is ‘‘honesty in fact in the conduct or transaction concerned.’’ 1– 201(19).

   The amount of the consideration is significant as evidence of good faith. [Citation.] Heinrich gave substantial value for the truck, more than Wilson agreed to pay Titus-Will. Nor did Heinrich know or have a basis to believe that Wilson’s sale and delivery of the truck to him violated Titus-Will’s ownership or security interest rights. There was no showing that Heinrich acted other than in good faith. * * * Wilson’s illegal and fraudulent activity does not taint Heinrich’s status as a buyer under 2–403(2). When Heinrich accepted delivery after previously paying Wilson, Heinrich was ‘‘buying’’ as defined by 1–201(9).

Timing of Entrustment 
Titus-Will also argues that the UCC entrustment provisions should not apply because it entrusted the truck to Wilson after Heinrich had completely paid Wilson. This is an issue of first impression in this jurisdiction.

   Before the completion of the Wilson–Heinrich sales transaction, Titus-Will entrusted Wilson not only with the truck, but also with the signed odometer disclosure statement, the owner’s manual, the warranty card, and the keys. By doing so, Titus-Will clothed Wilson with additional indicia of ownership and with the apparent authority to transfer an ownership interest in the truck. It also enabled Wilson to complete the sales transaction. 2–401(2) (‘‘Unless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes his performance with reference to the physical delivery of the goods’’). In addition, the entrustment allowed Wilson to continue to deceive Heinrich from October 21, 1989, the date of delivery of possession, to November 9, 1989, when Wilson finally admitted the truth. We believe that under these circumstances, application of the entrustment doctrine, 2–403(2), furthers the policy of protecting the buyer who relies on the merchant’s apparent legal ability to sell goods in the merchant’s possession. 

   The second rationale for the entrustment doctrine also supports its application here. Titus-Will, in the business of selling cars, was in a better position than Heinrich to protect itself against another dealer/broker who might fail to pay for the goods. It could have insured against the loss, and it could have adopted preventive procedures. * * * The third rationale for the entrustment doctrine focuses on the flow of commerce. Here we consider the potential impact on commercial transactions of requiring purchasers to research their dealer/broker’s legal title before accepting possession of the goods. Although the record contains no evidence on this issue, it seems obvious that this requirement would inevitably cause some delay. [Citation.]

   Requiring the entruster to retain the burden of risk, even when the entrustment occurs after a third party purchaser gives value, supports the policies underlying the entrustment doctrine. * * * The trial court did not err in applying the entrustment doctrine and granting replevin.

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   We affirm the trial court’s judgment.