When I was researching buying a classic car, I believed the following:
A vehicle advertised on a reputable classic car Web site means that the dealer/advertiser is reputable.
A reputable classic car dealer represents its cars accurately.
A reputable classic car dealer does not mislead customers.
If there are problems with the car after the purchase, the dealer will make things right.
If the dealer does not make things right, the buyer has recourse.
Instead, here was my experience: I took delivery in Arizona of a classic car from Motorland America in Maine. The car had been advertised at hemmings.com and the dealer’s Web site described the car as being very good to excellent in every respect, and they told me there was no rust. My mechanic soon found significant rust, no rear brake function, non-original engine, and evidence of a collision. An independent certified appraiser valued the vehicle at $6,000 less, or 40% less, than the purchase price. For months I have tried to get Motorland to pay me the difference, but they refuse. I have no recourse except to help others avoid my experience.
A Better Way
So here I offer my learning — independent and as objective as I can be. I accept no money from advertisers or others. You will find no links to Web sites that sell to prospective classic car buyers here, as I do not endorse any nor do I receive compensation from any.
And I offer expert advice. Other sites that offer advice to prospective buyers are often incomplete, typically suffering from undue influence from their prime revenue source: classic car dealers. Indeed, some seem to abhor informed customers: Consider that one of the big on-line listers of classic cars for sale was not at all interested in my advertising this site with them. Fortunately, you can avoid my experience.
Following the advice described below can help you avoid my experience.
You can avoid my experience
It is a commonly thought that the next step after identifying a potential classic car for purchase is to arrange to see the vehicle — but that is wrong. Because classic cars are used cars — and classic car dealers are used car dealers — the next step is to evaluate the dealer.
After identifying a potential vehicle to purchase, evaluate the dealer. Time spent researching the dealer can save the costs and time associated with later steps. Dealer reviews may be hard to find. Consider this: I posted a review to the Facebook page of Motorland Vintage America. Later they removed all reviews. Then I wrote a post to their page — and they removed that.
Nonetheless, search for reviews and complaints on-line, such as complaints.com, yelp.com, ripoffreport.com and dealerrater.com. Ask local car clubs and participants in car shows about their experiences with the dealer. Post a link to the on-line ad for the vehicle at classic car sites and ask for feedback about the vehicle and dealer. Consult the Better Business Bureau, State Attorney General, and Department of Motor Vehicles.
If you find an issue, walk away from the dealer.
Finally, if the dealer offers customer testimonials, ignore them. Any dealer, indeed any business, can find among its customers some who seem satisfied. You are looking to get a sense of why and to what extent a dealer has dissatisfied customers.
Then, if the dealer seems reputable, then inspect and test drive the vehicle.
Inspect and test drive the vehicle
If the dealer is nearby, schedule a visit. If the dealer is far away, decide if you want to travel to see the vehicle. The risk of not seeing the vehicle in person may be mitigated by the appraisal and inspection, which are described later.
Visually inspect the exterior, interior, engine, and undercarriage of the vehicle. Note any issues and discrepancies from the dealer’s description. Go on a test drive, allowing the dealer to drive first. During this time, note any unusual noises or performance. Then, drive the vehicle yourself, noting anything unusual.
After the test drive, ask the dealer to respond to what you have noted. If the dealer cannot adequately respond to what you have noted, or if there is wide variance between the dealer’s description and what you have observed, then walk away from the dealer.
Make notes of what the dealer says about the vehicle. Afterwards, email the dealer summarizing what the dealer said and asking the dealer to confirm your summary. If the dealer does not confirm, then walk away from the dealer.
Finally and just as important as the preceding, pay attention to your feelings about interacting with the dealer: If something seems wrong, then it is, and consider walking away from the dealer.
If the vehicle still seems worthy of further consideration, then arrange for a pre-purchase appraisal and inspection.
Conduct pre-purchase appraisal and inspection
Pre-purchase Appraisal: Engage an independent, experienced, professional certified appraiser. The appraiser should have no financial interest in the appraisal and should not be in the business of selling additional services. The appraiser should conduct a thorough vehicle inspection, and provide a written report that includes estimated value, evaluation of vehicle systems and components, current prices of comparable vehicles, comprehensive photographs and an independently-obtained vehicle history report. Ask the appraiser to conduct research that identifies any history of problems with the make and model.
Pre-purchase Inspection: Engage an independent, experienced, professional certified mechanic. The mechanic should conduct a thorough inspection and road test, and should review dealer-supplied maintenance records. The inspection should identify evidence of collisions, previous repairs, repairs needed and estimated cost to repair, structural issues, rust, and safety of the vehicle. The mechanic should provide a written report.
Why do both an appraisal and inspection? These reports provide you with information needed for price negotiations: the actual value of the vehicle and the cost to repair it.
If the appraisal and inspection identify any issues — and they surely will — then share the issues with the dealer. If the dealer does not adequately address the issues, then walk away from the dealer.
That’s right: Having spent, say, $750 for the two reports, you walk away. Consider it money well-spent, helping you to avoid grossly overpaying for a classic car or paying perhaps thousands of dollars in repair.
If the vehicle still seems worthy of consideration, then negotiate the terms of sale.
Negotiate the terms of sale
Negotiation is not just about price, it’s also about the means of payment and what happens should you reject the vehicle after delivery.
There are many on-line sources for negotiating price. Take a look at their approaches and use one that feels right to you. Here’s one approach that seems fair: The appraisal identified a fair price or price range for the vehicle. If you are prepared to pay such a price, then offer it. If the dealer insists on higher price, then remind the dealer that an independent authority says the vehicle is worth what you have offered, and that the inspection identified an estimated cost to repair. If the dealer does not accept your offer, then walk away from the dealer.
Escrow is the way to pay. An escrow service withholds your payment from the dealer until you have received, inspected, and accepted the vehicle. The escrow fee may be a flat fee or a percentage of the purchase price. Understand the escrow service’s terms should you reject the vehicle. Incorporate the escrow arrangement into the terms of the sale.
If the vehicle needs to be transported from the dealer to your location, ask the dealer to either pay for the fee or to split the fee. Incorporate into the terms that the dealer pay return transportation in the event that you do not accept the vehicle.
Upon receipt of the vehicle, again inspect it and take it on a test drive. If you identify an issue, contact the dealer and resolve the issue before accepting the vehicle.
If you have completed the above steps, there should be no major surprises after you have accepted the vehicle, so enjoy. If there are major surprises, what can you do?
Most likely, the terms of sale included “as-is, no warranty expressed or implied”, and in many jurisdictions, the presumption of “buyer beware” prevails, so your options are limited.
You can negotiate with the dealer. If the car was advertised with a third party, you can file a complaint with them, bearing in mind that their revenue comes from advertisers, so they are loathe to sanction them. You can file complaints with the State Attorney General and others, who are required to investigate. The results of their investigations may provide leverage negotiating with the dealer. Filing a civil suit can be prohibitively expensive. Furthermore, proving dealer fraud may require proof of intentional fraud, an assertion that may be very difficult to prove.
No matter what you do, please share your experience with prospective classic car buyers, so that they may learn.
Help others have a good buying experience
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© 2014 Michael Keller