Private purchase or Dealer broker

Hi All,

I am a buyer in a transaction that I assumed to be a private sale between me and the owner. He also intends to buy a new model from the Dealer he has dealt with over the years and in fact it is the Dealer where I am going to have the PPI done.
After our handshake he tells me that he wants to try and get the Dealer to broker the deal.
Obviously (I think) it is for tax credit reason (MA). I am unfamilair with the particulars and transaction ramifications of broker involvement versus private sale. I was wondering if there is any upside for me in this. Perhaps it obligates the dealer from a lemon law or recision standpoint which protects me a hair?
And / Or maybe they could offer me an extended warranty that I would otherwise not be able to get on my own?

Any advice, knowledge or opinions appreciated.

(I know I'd have to pay the sales tax to the Dealer but I'd have to pay in NY anyway)


Thanks.
Al

 

the seller arranged the sale himself with you, he wants to run it through a dealer to take advantage of having to pay sales tax on the net difference between what he sells it to you for and what he pays for his purchase...vs needing to pay sales tax on the entire purchase price... entirely normal transaction... everyone wins...

 

Yes he benefits. But what is my "win" or potential "win"?
On the surface it looks like there is no upside for me, not that there is downside either. I will most likely still do the deal in the end.

 

From your perspective there is really no difference so it shouldn't matter to you either way. The only time this makes a difference is in states like Arizona where "private party" transactions are sales tax exempt. Dealer purchases are subject to sales tax. So if you lived in Arizona it would be a big deal. But if your state charges sales tax regardless then it makes no difference whatsoever.

In most states you cannot Lemon Law a used car so there's no benefit there. If there is a silver lining it would have to do with recourse since most dealers are held to a minimum standard of representation. If for example you discover the car was not as represented in some manner (ie. title issues, damage, etc.) you would have a greater chance of recourse against a dealer as opposed to a private party.

 

Same dealer doing the PPI? That won't be the most objective solution. Seems like the dealer might be more inclined to let things slide since the guy is buying a new car through them and they're motivated to move on down the road. Not unless this car is a low miler, one owner and newer with impeccable service history I might be inclined to have someone inspect it that isn't tied in some how. Ask for a copy of the car's service record from the dealer(has to be an F dealer) They can provide that for you with owner authorization.

 

+1. I fell into that trap.

 

Uhh, well, yeah I know, but... (excuse #1) I do not know of an Indy shop in the seller's area (Boston). (#2) I do not have the time to research Indy shops in the area (#3) I do not think the seller will allow an Indy shop to do a compression test (I know I would be hesitant)
(#4) I want to say I am pretty sure the Dealer is a very reputable one (FoNE). I did have a long chat with the service manager and he gave me a comfy feeling about the car and it's owner and how significant items of concern will show up in the diagnostics test.
(#5) I spoke with a Dealer closer to home (talked a while with their S/M) and he also gave me a comfy feeling about the car (he looked it up) and possible issues to look out for.

Regardless of my excuses though the car does have high mileage (2006 w/ 20K) and it has been owned a few times prior. So I'm feeling a tad guilty/worried here that I could be exposing myself to a problem that an Indy, not the dealer, might pick up - idk, we shall see.
That is why I was wondering if, by the Dealer being a broker maybe I'd be more covered than not.

Thanks for your input.
A

 

What I would do is this. Since the dealer(I'm assuming an F dealer) is doing the inspection get them to throw that in as part of the Power Cube warranty. The dealer has to do an inspection as part of the Power Cube. Based on findings, throw the warranty in as part of the price negotiating mix. That way you are buying a high miler car with warranty that you can see if it is a good car or not over the next year. Tell the dealer that you'll probably want to renew the warranty through them.(that way they're game) With a car of that kind of mileage and the way this is going down I think you open yourself to a possible big owie later. With a warranty request the dealer has more of an incentive to keep things honest as it's their claim to have checked things out on the line if a warranty thing comes up later. Good luck.

PS - use the excuse that since the seller dropped this on you with the dealer/broker now the one doing the PPI that you just want to make sure you're getting a trouble free car and this is what experts recommend If the guy balks at it then he's hiding something or doesn't want you digging too deep for whatever reason and it's time to rethink the deal.

 

Couple of comments: FONE is a very reputable place that stands behind their cars (from experience). This car, being an 06 is not eligible for a Power Cube warranty. They can only offer you a Power Train warranty (You may be on the cusp of the Power Normal depending on when the vehicle was placed into service). In some states private party sales are taxed at a lower rate than dealer sales. In Illinois, e.g., the maximum sales tax on a private party vehicle sale is $1600. There is no limit on the nearly 8% sales tax paid to a dealer, however. Find out the law in your state (NY).

 

I kind of figured the car would not be eligible, I'll ask away.

The tax issue is interesting - I will have to dig deeper re: NY DMV requirements. I do have a part-time residence in RI, I wonder if there is a play there...

Thanks

 

I presume the same amount of cash is coming out of your wallet, regardless of whom you buy it from. Therefore it would be far better buying it of a dealer than a private individual.

 

The mercenary in me suggests that he is getting a (sales tax) relief by your agreement to broker it at FONE. I might ask for a piece of that towards your purchase price. If there is 8-12 K in saving then you should ask for price or services in kind. Perhaps an annual service - dealer gets a piece, you get the service and guy gets the sales tax relief.

Just an idea.

Scotts

 

Agreed. I know I would offer up a share of the savings to a buyer. That's win - win.

I will be contemplating this. The deal is slated for next week so we shall see...

Thanks

 

Here are my thoughts. I would not register in RI, they have car tax there like we have in CT and if you save 1-2% sales tax over NY, the yearly car tax will keep biting you later. Plus, who knows what their inspection and emissions laws are.

I don't like how this deal is going down. I suspect that once you get up there, even if they don't raise the sales price on you, you are going to see some purchase order with a dealer fee on it. NY dealers charge $75 max by law, not a penny more. FL dealers often charge like $900. CT and NJ dealers charge about $450 all day long. I have no idea what MA dealers can get away with, but I bet it is not $75. You have a private deal and do not want to pay any fluff b.s. dealer fee. Those dealer fees are nearly impossible to negotiate away.

Do you really want a free annual service thrown in? I doubt they will, but even if they do that place is very far. About 3 hours from Scarsdale each way and lots of miles on your car, unless they flat bed it (highly doubt they will for an annual).

I do not see you getting a free Powertrain Warranty out of this deal, unless the seller is paying for it out of what he is now all of a sudden saving on the sales tax.

The one highlight to this deal is that you should be eligible to purchase a Powertrain Warranty and maybe a Power Normal depending on the car's in service date. When you buy a Ferrari Certified Car with one of these 2 warranties, they include a compression test in that price as Ferrari will not warranty it otherwise.

Put some pressure on this seller to share in his new found sales tax discount, you are in the driver seat.

I suspect this was all part of the seller's plan with the dealer from day one, but the dealer did not want to take the car at the price you are paying or did not want an '06 on its lot with 20K+ miles.

By the way what exactly are you buying (model, tranny, color etc)?

Good luck.

 

This is good info / a possibility that I will look into.

Also I am nervous over the clutch / have been reading too much. At 20k miles if it has not been done already IT has to be due soon.

It's an '06 F430, F1, blk/blk, no secret it is posted here in the classifieds @ $119 check it out..
Al

 

Pm me and I'll give you further advice on this very topic I recently dealt with.

 

While FoNE does have an excellent reputation, you still might want to have another shop do the PPI so that you eliminate even the appearance, not to mention the possibility, no matter how low, of a conflict of interest. This can be important when you do have concerns about the remaining life of the clutch or other items that might be nearing the ends of their lives at 20,000 miles.

There are several excellent independent Ferrari shops in the Boston area and you wouldn't need more than about 15 minutes of due diligence to determine which can do the best job for you. Three that come to mind right away are:

1. Boston Sports Car in Weston (12 miles west of Boston) and is only 25 minutes away from FoNE in Norwood, http://www.bostonsportscar.com/

2. John Tirrell's IFS (Independent Ferrari Service) in South Easton (south of Boston and FoNE but also about 25 minutes away) http://ifsferrari.com/

3. Aston Martin of New England in Waltham, which sounds like a strange choice but they hired FoNE's long time service manager a year or two ago (Steve I forget his last name) and since then he has reported in the New England section about how they have hired Ferrari trained techs and are actively looking for Ferrari service clients. He seems to have an excellent reputation.

Your seller most likely is netting out the sales tax advantage by running the sale through the dealer and this should not pose any additional risk to you as far as I can see. As others have pointed out, you may now be eligible for some warranty coverage that a private seller can't offer but that opens up the possibility of the dealer changing the price.

You can try to get some of that sales tax savings I suppose but that might depend more on how much the seller wants you as the buyer and, if you already have negotiated the price (subject to the PPI) then you have a weak bargaining position because his use of the dealer doesn't cost you or inconvenience you.

Good luck with your purchase!

 

As stated earlier I think he does have a bargaining position. The fact that the same dealer is brokering the deal and doing the PPI.(that was dropped on him later as a "oh by the way.") As a result of the conflict the only way to make it whole is for a warranty. A 20Ker is going to have some things that need to be done so that cost can be part of the equation too. Lots of room to grind the more you dig into this car. On a car of this mileage etc. the buyer is in the drivers seat as they are typically a harder sell not unless the price is way low.

 

I don't see what FONE has to gain from this transaction EXCEPT that the seller may have made his purchase of his new Ferrari contingent upon mitigating his sales tax by selling you his old car through the dealer. I doubt that FONE has any other monetary interest in this. Having said that it may be advantagous for you to purchace the extended waranttee through them. I doubt that they will offer this free of charge. I would recommend the extended factory warrantee for at least one year until you are sure that the car is "sorted out" as people here like to say. For Power train this will cost about $3200 and for Power Normal (if available) this will cost about $4200. There is generally a $600 inspection fee for CPO'ing the car.

MA vehicle sales tax is 6.25%. on a 115 K transaction this will save the buyer about $7500. If you split this with him it will pay for the extended warantee. Basically you can try to negotiate with the seller to split the sales tax savings and use that money to purchace the factory extended warrantee. That way you, the seller and the dealership (who profits by selling the warrantee) all benefit to some extent.

BTW FONE charged me a $395 "doc" fee which I think is very reasonable.

 

I used IFS for a PPI on my TR a few years ago. John is a very knowledgeable and nice guy. Worth a phone call to him.

 

Cool, thanks.

Spoke to him this morning very informative, he IS the way to go.