Sale or Return Query
Discussion
Caps4444 said:
I feel many private customers prefer to go through a dealer?
He said he will make a small commission but most of his profit will come through financing it for the client.
This in isolation is not unusual at the moment - dealers are struggling for stock so will pay over the odds for it, just to shift cars. Even if the margin in the sale is minor, the finance commission is good to keep cash flow going. Particularly with nearly-new cars in clean condition, where the risk is minimal and there is currently a large pool of customers who exactly as you say, don't want to wait a year for a new one.He said he will make a small commission but most of his profit will come through financing it for the client.
However, I don't see why he wouldn't just buy it off you straight unless it's the fact that he's not sure what price point it'll shift at, and so to buy outright he'll offer you much lower than you'll get on this "SOR" basis where he'll just take a minor commission if the customer buys for a higher price....
SuperPav said:
This in isolation is not unusual at the moment - dealers are struggling for stock so will pay over the odds for it, just to shift cars. Even if the margin in the sale is minor, the finance commission is good to keep cash flow going. Particularly with nearly-new cars in clean condition, where the risk is minimal and there is currently a large pool of customers who exactly as you say, don't want to wait a year for a new one.
However, I don't see why he wouldn't just buy it off you straight unless it's the fact that he's not sure what price point it'll shift at, and so to buy outright he'll offer you much lower than you'll get on this "SOR" basis where he'll just take a minor commission if the customer buys for a higher price....
Possibly just the cash exposure.However, I don't see why he wouldn't just buy it off you straight unless it's the fact that he's not sure what price point it'll shift at, and so to buy outright he'll offer you much lower than you'll get on this "SOR" basis where he'll just take a minor commission if the customer buys for a higher price....
£50k exposure for 3 days with a customer lined up who has paid a deposit is different to £50k speculative purchase for stock?
vaud said:
Possibly just the cash exposure.
£50k exposure for 3 days with a customer lined up who has paid a deposit is different to £50k speculative purchase for stock?
I actually asked him to buy it at a slightly lower price, but as you said, it’s using up capital exposure.£50k exposure for 3 days with a customer lined up who has paid a deposit is different to £50k speculative purchase for stock?
I suppose the agreement is there so if he does sell it for say the agreed 61 and takes the deposit, then I’m obligated to sell it to him for say 59.
Otherwise I could back out I guess.
Let’s see what it says.
Wacky Racer said:
How does the dealer know:-
a) His customer requires finance?
b) They are going to get the finance from them?
Very true…..anyway if there is anything not right with the agreement then I’ll hold off and keep going down the private route, and if it doesn’t sell then I’ll keep hold.a) His customer requires finance?
b) They are going to get the finance from them?
CSLM3CSL said:
Unless there was a way for the finance company to pay me directly there us no chance I would be agreeing this.
The trader may have the capital but wants to minimise exposure. So being paid directly in full by the trader once he has his customer (with deposit and finance lined up) is low risk. What is higher risk is the trader having any kind of possession of the vehicle for inspection, etc before payment...
vaud said:
What is higher risk is the trader having any kind of possession of the vehicle for inspection, etc before payment...
Any potential buyer is going to want the see the actual car & test drive etc before buying i'd have thought.The dealer doesn't want to use his capital to buy stock? That's part of being in business, i'd wager he's not actually got the csh.
darreni said:
Any potential buyer is going to want the see the actual car & test drive etc before buying i'd have thought.
The dealer doesn't want to use his capital to buy stock? That's part of being in business, i'd wager he's not actually got the csh.
Or he/she is just derisking… find stock, find client and then just minimise the exposure.The dealer doesn't want to use his capital to buy stock? That's part of being in business, i'd wager he's not actually got the csh.
vaud said:
Or he/she is just derisking… find stock, find client and then just minimise the exposure.
Exactly - I have made it clear that the car will only be let go once clear funds in my account. He will advertise it, find customer etc….probably take 1k and then once he has deposit, will come and pay and collect car.I think with an 11 month old Macan with only 1.5k on the clock (2yr OPC warranty) it’s an easy way to do it.
Personally I’d be uncomfortable with this sort of arrangement after reading horror stories.
Although you sat you wouldn’t hand over the car until you get the cash, when does legal title pass to the trader?
I thought (and could be wring), but once you sign the SOR agreement you are essentially handing legal title to the dealer. The dealer then owes you an amount equal to the agreed value of the car and it is part of his stock.
However, if he goes bust, the car technically belongs to him and you are an unsecured creditor.
The fact that the car and keys are still with you may not make much difference.
I could be wrong on my understanding, and happy to be so. But for me i’d go for a clean sale with WBAC, Cazoo etc
Although you sat you wouldn’t hand over the car until you get the cash, when does legal title pass to the trader?
I thought (and could be wring), but once you sign the SOR agreement you are essentially handing legal title to the dealer. The dealer then owes you an amount equal to the agreed value of the car and it is part of his stock.
However, if he goes bust, the car technically belongs to him and you are an unsecured creditor.
The fact that the car and keys are still with you may not make much difference.
I could be wrong on my understanding, and happy to be so. But for me i’d go for a clean sale with WBAC, Cazoo etc
Fat hippo said:
Personally I’d be uncomfortable with this sort of arrangement after reading horror stories.
Although you sat you wouldn’t hand over the car until you get the cash, when does legal title pass to the trader?
I thought (and could be wring), but once you sign the SOR agreement you are essentially handing legal title to the dealer. The dealer then owes you an amount equal to the agreed value of the car and it is part of his stock.
However, if he goes bust, the car technically belongs to him and you are an unsecured creditor.
The fact that the car and keys are still with you may not make much difference.
I could be wrong on my understanding, and happy to be so. But for me i’d go for a clean sale with WBAC, Cazoo etc
I’ll be reading the agreement very carefully and if there is anything to what you mention above then I won’t sign. I just want to give him permission to advertise it….will clarify tomorrow as he’s coming over to take photos etc….Although you sat you wouldn’t hand over the car until you get the cash, when does legal title pass to the trader?
I thought (and could be wring), but once you sign the SOR agreement you are essentially handing legal title to the dealer. The dealer then owes you an amount equal to the agreed value of the car and it is part of his stock.
However, if he goes bust, the car technically belongs to him and you are an unsecured creditor.
The fact that the car and keys are still with you may not make much difference.
I could be wrong on my understanding, and happy to be so. But for me i’d go for a clean sale with WBAC, Cazoo etc
Can someone please advise that if I sign a Sale or Return Agreement, irrespective of me keeping hold of the car, then legally I am passing legal title to dealer and the car is part of his stock….just being held at my address?
If this is the case then I won’t be going ahead or he would have to be happy with a simple letter asking him to advertise the car and sell it at a given price?
If this is the case then I won’t be going ahead or he would have to be happy with a simple letter asking him to advertise the car and sell it at a given price?
Indeed, but someone mentioned on another thread that an SOR agreement could be passing legal title to dealer, irrespective of whether the car is in his garage or in mine. Just wanted to know legally where I stand. I was hoping that if I keep hold then and he has “sold” it or taken a deposit, I don’t have to release it to him until I receive funds.
Ignore what someone else said about the effect of an agreement that they haven’t read or seen.
What. Does. The. Agreement. Say?
Very simple question. You were asked for it twice in your other thread and said that you’d read it carefully. If you’re now asking for advice again, see the line above.
What. Does. The. Agreement. Say?
Very simple question. You were asked for it twice in your other thread and said that you’d read it carefully. If you’re now asking for advice again, see the line above.
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