Anyone see the little blurb about RTGT and FNA suing some guys for flipping a 430 spyder? I'm guessing there's more to the story?
when we bought our ML63 a week ago, they asked us to sign some crap that said we wouldnt resell it for two years *outside the country*. I dont see why they couldnt draft it another way - contract law like that would probably be fine as part of the terms of sale.
People like this ruin the oportunity for others to purchase at MSRP. If Dealers cannot enforce selling to people who are going to keep and enjoy the car then they will be forced to simply sell at market and that will solve the flipper problem as there will be no margins left in the cars. If the cars continue to get sold out of area then soon there is not enough service work to maintain a top Service department and everyone in the Ferrari community suffers. Unfortunatly many dealers being forced to sell at market to combat this. I don't blame them. You wouldn't sell real estate bellow market, why sell a car bellow market. You can go to any Ford, Chevy, Toyota dealer and see second stickers of $4-5K for market adjustment. $50K add on to a $250K car is still in line. These same peaple will pay $250K membership and $800 a month in dues to there country club and complain about the cost of their Ferrari and the fact they cannot make a profit when they sell it a year later. I am happy to pay market. I don't wait on lists and I always have the Ferrari I want from my local dealer and I get fair values at time of trade in for my next. I am sure this will open a big can of worms. I hope Tonkin wins big.
I believe RTGT does sell at market. The problem for them is that Portland is a relatively small market, with only a few buyers willing to pay $100k over for a 599 or 430 (or buy a new Ferrari at all). Since dealers are forbidden from selling outside their territory, market price for RTGT is probably less than for a dealer in LA or Scottsdale, for instance. These guys were probably trying to exploit that arbitrage opportunity, and got caught. The interesting thing, to me, is that it would seem to me to be in RTGT's interest to be able to sell to as wide a market as possible. It might not be in FNA's interest, and it certainly wouldn't be in the interest of the home dealer for these guys, but I would think it would be a good thing for RTGT. I'm guessing that Portland is the smallest market with a Ferrari dealer, possibly excluding some high end vacation locales-- anyone know if I'm right?
Defining "market" is the critical question (just ask an antitrust lawyer or regulator). If you use a television station market as your standard, then maybe Dublin/Columbus, Ohio, (Midwestern Auto Group) or Greensboro, NC (Foreign Cars italia) and maybe Salt Lake City are smaller, but they may serve a much broader geographic area. If you just go with SMSA and Greenwich, CT is outside of the NYC SMSA, then it probably wins.
I'm quite sure that Greenwich CT is a much larger market for Ferraris than Portland, regardless of how large the total population is! The others are probably comparable, though.
That's awesome! Good for them -- I hope RTGT prevail in court. I've always held the opinion that the contract of Right of First Refusal required by dealers is a perfectly valid legal contract and enforceable -- and what's more it's a FAIR and reasonable thing to ask of their customers. I'm sure it will settle out-of-court, so we're unlikely to see a Ferrari precedent being set here, but I am optimistic that justice will be served.
If they entered a contract fine. Honor your contract. Now that said RTGT ddin't have to sell the car but we know they wanted to; and probably only care since the dealer in Texas is complaining about the new 430 sold for less than them bought out of Oregon with no sales tax. But once purchased how is a car any different than a house, boat, hope diamond, motorhome whatever. It has documented ownership and should be able to be sold at whatever price the free market allows. For the good of all red blooded capitalist, I hope they owners win as long as they haven't broken any contractual agreements. In the end only the lawyer will win and the car owners may spend more than the 50k on legal fees. Another example of how the Euro's have us with a looser pays legal system.
RTGT never made me sign a contract for my 430 spider. I was a unspoken understanding. Did I like paying over NO. Did I understand why they charge over, YES. I choose to do the right thing and give back to them rather than make $10-20k. It's called Karma! Mike
Europe's laws varies from country-to-country. "Loser pays" is not automatic in UK, but the courts can make any findings they deem appropriate, so they can award costs to either party win/lose. I suspect that this particular case revolves around a car not sold at market, but at MSRP, and then resold (breaking the RoFR contract) for profit.
Always blows my mind. But you should be able to do whatever you want with something that is yours. If that means reselling it to make profit, then so be it. But if they signed a contract saying that they wouldn't sell and the dealer got right of first refusal, then of course they'd have to honor that contract. But no contract? Then screw RTGT and Ferrari NA.
So, if I sold you my F430 for $1, and as a condition of that sale I tell you that if you want to sell it within a year, you have to offer it back to me for $1, then you should just be able to kiss-off our agreement and do whatever you please ? Wow, seems like we have different standards of integrity to me -- I've always been a "my word is my bond" type of guy ....
I'm not saying that *I* wouldn't honor that word. I'm just saying that without a written contract, what difference does it make and what leg would RTGT and Ferrari NA be able to stand on? Fine, don't sell the guy another Ferrari...black list him, etc. But jeez.. See what I mean? So if you're offering your F430 for $1 for the next year to me, I promise I'll sell it back to you in a year for $1.
It is likely that there is a written, signed contract, referred to as the "Right of First Refusal". The purchasers are alleged to have broken the terms of this contract.
Brian, The problem is that FNA punishes dealers who have their cutomers flip the cars with in one year. If a customer flips a car they get TWO less allocated cars. In turn costing them more than likely a couple hundred grand
So if If I buy a 430 and run it on ebay for top bid pending RTGT right to first match the offer then I would be able to sell it if they decided to not buy the car. Is this correct. Not knowing the facts of this case. Does anyone know if RTGT had an opportnity to buy this car back at a premium?
Well, can't argue with that if they (the buyers) signed a contract. Still, I do think it's odd for a dealer and car company to do that. I guess the Ferrari market has been quite abused before. Then again, when the Minis first came out, the Miatas, the Soltices, etc..etc. There are always niche cars that when new, dealers sell for more than MSRP or if you find out at MSRP you can buy yourself and sell to make a profit. I guess Ferraris are so used to being objects of speculation, that Ferrari NA and their dealers are attempting to clamp down. Good? Bad? Who knows.
