For any number of reasons the time has come to part with your Classic Vehicle. How best to go about it? There is no hard and fast rule. Time plays a big part in considering the options. Our Man James offers the following possibilities.
The Private Sale;
Nice work if you can manage it. You avoided various fees from Dealers, Brokers, Auctioneer’s and the like, but did you really get the best price? You researched the various Classic Vehicle Websites and Magazines, particularly looking at the myriad of Auction reports and comparing the offerings of fellow vendors. You have reached a decision on the right price to ask. The time has come to decide on your advertising budget and commence marketing the vehicle. There are some magazines that offer free advertising to private vendors and they seem to have a good measure of success as do the Classic Vehicle Websites.
The Adverts are running, the telephone starts ringing and e mails appear. Many will be wanting photos, so it pays to have a number on hand. At some stage a viewing is arranged, though these days it is not unusual for certain vehicles to sell without the purchaser coming to look. The World Wide Webb has opened the market up to such an extent that your treasured vehicle may be bound for some distant country. You will have to endure the pain of the ‘time waster’ the ‘tyre kicker’ and the ones that simply do not show up, not even bothering to let you know. A well respected dealer friend was very cross that he had waited all afternoon for a prospective purchaser to show up. So he set his alarm clock for 3 a.m. the following morning and rang the offender to see if he was still coming.
Your prospective purchaser arrives. Show the car off as best you can but try not to talk too much. Answer questions truthfully and if you do not know the answer, offer to find out or simply say you do not know. Fibbing or guessing is not an option. The Purchaser needs to feel you are trustworthy. Equally you need to make sure he/she is genuine. To ask for a sight of their driving license is sensible, especially if they are about to test drive your vehicle and please check your insurance covers a third party driver. Have as much paperwork about the vehicle to hand, history is important to the majority of purchasers.
How you arrive at the final sale price is just a matter of negotiation. There are no hard and fast rules. Our Man James was taught that the best way of negotiating is to say nothing and let the opther party make the running. The trouble is that if the other side has been taught the same thing, an eyrie silence will descend and nothing will happen.
A sale is agreed, now what? English Law requires that for a contract to be binding it needs Form and Consideration. Form can be a receipt for the deposit or invoice stating the heads of agreement for the transaction. Consideration is clearly the money. This might be a deposit or the full price dependent on what you may agree. Cash, cheque, Bank transfer or what? Golden rule is that the vehicle does not leave your custody until you have cleared funds in your bank preferably. Our Man James hears of many sad tales at this point. Of dud cheques, fake Bank Drafts, forged cash and so on. There is nothing safer than seeing the money in black and white on your account. Even then it is not unknown for the Bank to subsequently find that the cash is forged, the cheque/draft no good and the money is removed from your account. In these modern times a simple on line Bank transfer may be preferable. However some people are unwilling to divulge their bank account details to a stranger. Pity the poor chap who sold his M.G.A. late on a Friday evening, took a seemingly good Building Society cheque and let the car go. He was unable to ring the Building Society as it had closed and when he arrived at their office on Monday morning, he was told that the cheque was a forgery. Car gone – no money. Insurance difficult as he handed the car over and it was probably out of the country by that time. Private sale can work but do be careful.
Ebay is popular. You can either post an advert as per the other websites or you can offer your vehicle for on line auction, usually for a period of seven days. There is an option to offer a ‘buy it now’ facility, wherein the Purchaser presses the right button and is technically bound to buy the car. Our Man James tried it twice last year. In each case the buy it now button was pressed, Ebay withdrew the car from auction, charged its commission and the ‘buyer’ proved to be a man of straw. In fairness Ebay refunded the commission but the whole exercise was ruined. You need to stay on the ball for the seven days as e mails will arrive with questions needing a reply, people may try to view and so on. It pays to look at each bidder’s record as they bid. There is a system of marking the reliability of each player and generally less than 10 points on a bidder’s record may suggest he or she has not been at it long and may need careful treatment. From the other point of view if you are an honest bidder you need to do at least 10 good deals to get past the magic ‘reliability’ number. Ask a friend or e mail Our Man James if you need help. Look at the payment options if you do achieve a sale. Ebay offer Paypal but you may prefer another option.
The Dealer may be the best buyer if time is short. You need to clear a garage by a certain date or you may simply need to raise money quickly. Get a rough idea of what your vehicle is worth by checking adverts, auction results, ask a knowledgeable Club Member etc. You will not get the full retail price but you can tell if you are not getting a fair deal.At the end of the day you part with the car, collect the money and there will be no further comeback, unless of course you have seriously misdescribed the vehicle.
The Broker is relatively new to the Classic scene. Basically he should treat you as his client and look after your best interest throughout your relationship. He should be on your side where the Dealer is not. In this case you will pay a commission on sale of the vehicle, but he is bound to do his best to obtain a good market price for you. The law relating to Agency states that he should do his best for his client and not take a ‘secret profit’. You should come away with more than a Dealer would offer even after his fees have been deducted. On this point make sure you agree beforehand about any work carried out on your vehicle prior to sale and any extras he will expect you to pay, perhaps for collecting the vehicle at the outset. Equally you the Vendor must be careful to describe the vehicle accurately and if there is a fault it is best to disclose it. Check your paperwork is all in order and that there is a long M.O.T. certificate. On the question of commission,this is normally around 10% but a minimum fee may apply. V.A.T. is almost certainly payable on this.
What about an an Auction ? A good choice if again time is of the essence and you need funds by a certain date. If your vehicle is rare or sufficiently hard to value, placing it in an auction where several hundred people will see it at once, not to mention all those now with access to the Auctioneer’s website, you are surely going to arrive at a fair market valuation for your vehicle. It may not be quite what you hoped or conversely you may be delighted by the result, but it is a tried and trusted method in this case.
So how do you chose which Auction House to approach? You need one that has a track record of selling Classic Vehicles and there are a number of Auction Reports you can read to assess their performance. You may feel your vehicle warrants one of the large Auction Houses or your vehicle may fair well at one of the provincial ones. Horses for courses perhaps.Look carefully at the charges in each case. They do vary. Some will charge an entry fee, a cataloging fee commission to both Vendor and Purchaser. Add storage and transport costs and it all mounts up. Having said that there are firms that charge only an entry fee and no vendor’s commission, preferring to charge a ‘buyer’s premium ‘ instead.
If you have time visit some auction sales. You will see that the Auctioneers differ, some staff are friendlier than others, you just need to feel comfortable that your best interests will be served in as professional manner as possible so that a satisfactory outcome is most likely.
Checkout the mathematics. Taking a car which sells for £10,000.
A typical Firm may charge a vendor’s commission of 5% and a buyer’s premium of 10% So the purchaser pays £10,000 plus £1,.000 buyer’s premium and V.A.T. & 20% on that making a total of £11,200. You the Vendor get £10,000 less 5% commission plus V.A.T. on that netting you £9,400. Hence the Auctioneer has taken £11,200 – £9,400 = £1800 including £300 V.A.T. Further deductions may appear as before such as entry fee, transport, storage etc. Be aware so that you understand how the net figure is arrived at.It may seem dear but you have a good chance of obtaining a sale on a known day if you have taken note of the Auctioneer’s advice as to reserve price etc.
Our Man James will be pleased to offer help and advice on all matters concerning the sale of your Classic Vehicle. As a former auctioneer, dealer and broker there is a fair amount of experience to call upon and if he does not know the answer he may well know a man who does.