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A Fool and His Money...
Where Classic Car Buyers Go Wrong.

Published 4/25/2004

Scammers enthusiastically received new evidence demonstrating that there are still many, many people willing to send tens of thousands of dollars to complete strangers for cars they have only seen in pictures and to sincere sounding sellers they've conversed with via email or telephone. Incredibly, some of these same people never even think of asking to see a copy of the title to prove that the individual selling the car actually owns it!

 

Let's get a couple of things straight here; as an able buyer, you should NOT have to PAY for the privilege of looking at a car prior to deciding to purchase it! I can't tell you how many dealers like to try to get prospective buyers to send them a 'deposit' before they allow the vehicle to be inspected. I also can't tell you how many times the vehicle turns out NOT to be as the seller described and how difficult the "fully refundable" deposit now becomes to extract from the dealers hands. It amazes me that there are some dealers who think themselves beyond reproach  and  even some who are genuinely shocked if not actually offended that a customers would question their description of a car and want to check it out for themselves.  Some how, they feel that if they have been in business for a decade or two without documented incident, they've established themselves as trustworthy - we see it more as them not having been caught.

 

I know it seems awful to 'tar' all dealers with the same brush (and I'm sure there are those that will take me to task over this article), but guys, even though we know there are some decent ones amongst you, this reputation wasn't earned overnight. Furthermore I'm sorry to say that we continue to cross swords with 'dodgy dealers' on an almost daily basis.

 

In the dealers defense, I'll say this much. There are some we know, who try very hard to be 'upfront' with descriptions of the cars they sell. They endeavor to give a 'warts and all' summation in an effort to save themselves the inevitable aggravation of a disappointed long-distance buyer.  However, we realize that despite their best efforts, there are some buyers (usually investment types) who should NOT be buying old cars at all. These are the folks who expect a forty-five year old car accurately described as being 'restored two years ago', to have NO stone chips in the paint!

 

On the subject of restorations, please realize that there are 'restorations' and 'restorations'. Don't think that simply because the owner says he has" $100,000 in the car" that the job must have been done right. The seller may be a novice who got himself shafted by an unsavory restoration shop.  By the way, do you know what qualifications are required for you to open a restoration shop? NONE! You could hang out a shingle tomorrow and declare yourself open for business! What makes the difference is 'reputation' - in the restoration business, it's everything.  A good restorer will have numerous examples of his craftsmanship to show you and many happy customers for you to speak with. He will also have extensive documentation of each and every build. Those records represent value not only to the owner but to you as a potential buyer. They will tell you exactly what was done, what components were used and how well they we installed.

Getting back to the aforemention
ed $100,000 car, if a seller makes a claim like that, ask to see the evidence and I'm not talking some photos and half a dozen receipts - I mean dozens and dozens of photos and $100,000 worth of receipts. If he doesn't have them, it may not be the end of the world, but you don't want be paying top dollar for a restored car that doesn't come with full supporting paperwork from a reputable shop.


We recently had a client who'd bought a Porsche 911 on eBay. The seller (a private individual) in his 'terms' demanded that a 10% deposit be paid via wire transfer within 72 hours of the auctions end and that the balance be paid in full within 5 days. Our client was all ready to send the deposit, then hop a plane and fly to buy the car, when (thankfully) his conscience pricked him and he called us. We told him to do nothing until we were able to verify that the car was 'as described' by the seller.  Even though our client had already won the car on eBay, www.AutomobileInspections.com were able to get someone to inspect the car at very short notice. In fact before the 72 hours window was up, they had checked the car out for him and had the completed 6-page report long with accompanying photos in his hands, so he was certain of what he was getting for his money. Still, as the clock ticked on, we continued to look out for our client - and as his representative we set about drafting a purchase agreement ensuring that we asked the seller to send us a copy of the title as proof of ownership before we sent a deposit. Well guess what.. He didn't have the title - the bank did! He was hoping someone would give him the money for the car up front so he could pay off the loan on his car and get the title. We didn't think so - it wasn't our client's obligation to pay off this seller's debts. With no title in his possession, he was in no position to make demands. We began calling the shots from there on out to ensure our client was protected.
 

Imagine this scenario, our client wires the money to the seller (who was financially strapped for cash) and he simply takes off without paying off his loan to the bank.  Even if the car may be on its way to you, if the bank didn't get paid - you don't get the title, you don't own the car.  SO make SURE you (or your representative) see the ACTUAL title (not a copy) BEFORE you ever send a seller a penny for the car.

 

Another story I can relate is of folks who advertise and sell cars that they never owned, doing a bunk with the money trusting/foolish buyers have sent them. One instance was about a guy in Pennsylvania who went to see a Jaguar XKE Coupe that a neighbor was selling for $20,000. He took many photos, asked lots of questions and asked to see the title which he got the owner to give him a copy of.  This guy then began advertising the car for sale in major international classic car publications (the type he knew his neighbor was unlikely to read) for about $14,000 a price that was not so low as to arouse suspicion but just low enough get folks to do stupid things like wire him money to buy the car 'sight unseen'. He could of course send photos of the car when people asked, he could also give them details, copies of service receipts etc - even the title upon which he conveniently blacked out the real owners name and address, telling the buyers he did it for privacy as he didn't want "tire-kickers just showing up at all hours". Anyway to cut a long story short, over a three-month period he sold that car 34 times! He stalled folks who had sent him cash saying he wasn't well, or that he was arranging shipping etc. etc. until finally, he emptied the account and headed for the hills.  As I recall, he made off with almost quarter of a million dollars (some buyers had just sent him deposits, saying they'd fly in with the balance). We got involved when a Norwegian gentleman hired us to try and help him get his money back. Well, we found the perpetrator, got him arrested and (along with his girlfriend) imprisoned. The money however was long spent and as he had no remaining assets to speak of a lot of people got a hard lesson in life.

 

I believe that the 'eBay phenomenon' has caused a lot of the problems that exist in the market today. Folks in the trade typically love eBay.com because it lulls buyers into a false sense of urgency.  They rush to send deposits, set up trucking and wire transfer huge sums of money just because what the seller said that was the way he wanted it done! HELLO !!!!! Since when does the seller get to take charge of the deal? YOU ARE THE ONE COMING TO THE PARTY WITH THE MONEY! Make no mistake; there are far fewer real buyers out in the market place with hard cash than there are sellers with cars to sell.  I don't care what the car is; there will inevitably be another (just as good) for sale tomorrow - or next week

 

So where am I going with all this? Well I was prompted to write this article due to the apparent increase of fools in the collector car market place who are looking to get themselves hurt. Every time the phone rings and it's another customer who's put himself in harms way and is looking for someone (us) to bail him/her out, I want to reach down the phone and straggle them for being so foolish. In this age of high speed technology, now more than ever you must adhere to the warning 'Caveat Emptor' or BUYER BEWARE!

 

 

Here are some rules to live by:
 

1)       Never send ANY money to a seller until you or your representatives have checked out the car.  If you can't get to it yourself, or don't have the experience - use a professional inspection company like www.AutomobileInspections.com it will be money well spent.

2)       If  the seller is adamant that you send him a deposit - put it on a credit card, that way if the car is not as described you can get your bank to 'charge-back' the card. If he doesn't take credit cards - WALK AWAY!

3)       Forget the sellers posted terms on eBay they're negotiable, he made them, he can break them. If you are the winning bidder you have the right to inspect the car prior to payment. Sellers who have accurately represented their cars to the best of their ability should have no problem with this. After all you've agreed to buy the car at your winning bid if the vehicle does indeed turn out to be as described.

4)       ALWAYS demand to see a copy of the title initially, and then the actual title when you go to inspect the car. Do NOT send ANY money until the seller gives you unequivocal proof that he not only has the legal right to sell the car, but that the title is physically in his possession.

5)       Realize that if the car turns out to not be as described, despite what you agreed to pay him for it, you are now in a position to renegotiate the deal.

6)       If you are 'out of your depth' be big enough to seek professional help from a group like www.BuyerServicesInternational.com  and early enough for them to help stop you from getting yourself hurt.

 

Written by Jeff Webster

CEO, Buyer Services International LLC

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