Best Way to Structure A Contingent Purchase? | FerrariChat

Best Way to Structure A Contingent Purchase?

Discussion in 'Ferrari Discussion (not model specific)' started by ghost, Feb 3, 2004.

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  1. ghost

    ghost F1 World Champ
    Lifetime Rossa

    Dec 10, 2003
    Looking for a little advice from the team. This is my situation:

    I am looking to pick up my first Ferrari - a 355B! I have found one that is far away (ie, will need to hop on a plane to reach), but which matches my criteria in many ways, and its a car I am excited about. The dealer selling it seems reputable and nice, but he does not specialize in Ferrari's, and therefore can't talk "shop" (he knows the basics, such as issues about the clutch, other basic maintenance checks, but not 355B-specific nuances, such as whether a leakdown has been performed, ECU issue, etc.) He has readily admitted that the car needs its 30K major, given where mileage is, not because of anything specifically wrong with the car. His honesty does not seem to be of question -- he is coming off as a very nice guy who happens to have a Ferrari currently, but just doesn't sell at this price point often.

    I am negotiating to buy the car, although there is also another buyer I am competing with (assume for now this is true, and the dealer is not playing me off -- I know it is). Also assume that the dealer has a hard deadline of 3 days in which he has to sell the car (again this is true -- too long to go into the specifics, as to why), so there is time element to getting something done. Finally, the dealer lives in a town where the nearest Ferrari Dealership is a couple of hours away, although there are one or two reputable high line mechanics that he deals with, and he has indicated they would be able to review the car for me, should I desire.

    The question I have is as follows: what's the best way to structure a contingent purchase, so that the dealer knows I am committed, yet I have some guarantee that the car I am seeking to buy is not a lemon that needs a $20K engine replacement! Here are a couple of my thoughts:

    1. Be willing to put a deposit down, but get signed in writing from the dealer that the deposit is refundable if there are any mechanical/engine/electrical issues that turn up in the PPI inspection (which would include a leakdown/compression/etc). Obviously, the PPI would have to be done by the local technician. Con: You are at the mercy of the aptitude of the local technician.

    2. Flatbed the car to the nearest Ferrari dealership, and have them do the PPI. Con: Obviously, you are assured of a dealer review, but (i) time, (ii) cost, and (iii) getting into their schedule at such short notice, probably makes this option prohibitive.

    3. Try to get the records from the previous owner, and figure out the problem history. The car spent much of it's life in Florida, but the current dealer is still trying to track the records down. Con: (i) this will take time, and (ii) the current dealer is not having much luck getting the information anyways (can I just ask my local dealer to run the VIN? -- is there a shared database that has up to date records?)

    This is my specific situation. I'd like to structure something that works on both sides. Because of timing of this sale, I'd really appreciate your thoughts over the next 24 hours.

    Thanks and Regards.
  2. jmillard308

    jmillard308 F1 Veteran
    Owner Silver Subscribed

    May 29, 2003
    Perth West Oz
    Full Name:
    John Millard
    Don't try the impossible - there will be others:)
  3. Tyler

    Tyler F1 Rookie

    Dec 19, 2001
    dusty old farm town
    Full Name:
    Option number two is the one that makes sense to me.

    Time constraints are his problem, not yours. If the car sells before you can buy it then so be it. They made quite a lot of 355s.

    Patience is a necessity in Ferrari buying. It is not unusual to look for a year or more to find exactly what you want.

    If you absolutely have to have a car NOW, and there is nothing wrong with that, then purchase one from someone who is well trusted(Cavallino Motors-Martin on this board and Shelton come to mind) and has an impeccable reputation.

    Best of luck to you!
  4. 62 250 GTO

    62 250 GTO F1 Veteran

    Jan 9, 2004
    Nova Scotia Canada
    Full Name:
    First off good luck and go with your gut. Second, when you are dealing with a salesman there is always a "time deadline" it rushes you into making a decision. Because if there is no pressure for you to buy, often you won't. It also makes it seem like it's such a hot deal, so don't let it pass you by. O and thirdly there is always someone else interested in the car as well. Again, "you must buy it before they do"! I can't tell you how often I have heard these cheesy lines, and how many times I have used them myself. There is always a story to go along with these lines and you must not believe them. Don't get stuck with a car because you were pressured into buying it. Remember, he is there to sell it for the highest price possible.
  5. whart

    whart F1 Veteran

    Dec 5, 2001
    Grandview NY
    Full Name:
    Herr Prof.
    Ghost: you have covered the basics, ie deposit with written agm't to refund, contingent on outcome of PPI; by all means have the PPi done independently, by a qualified mechanic/dealer; and, get the records. (Even if the seller doesn't have them, he can tell you where he had the car serviced and so long as the place isn't defunct, the seller should be able to procure copies, but that may take some time). Obviously, if the dealer has another qualified buyer who is willing to plunk down without all this trouble, you are not going to get the car; but then, would you buy a pig in a poke? Where is the car located? (Generally, by state if you like...) Also, remember there are no incredible deals in Ferrariland. Just one major glitch will set you back more than your apparent savings on the purchase price, and make you wish you spent the money for a fully fettled car.
  6. jakermc

    jakermc Formula 3

    Jan 17, 2004
    Palm Beach, FL
    Full Name:
    Just curious as to what your criteria is. What makes this car stand out for you? I just bought a 355 the weekend before last and think I still have most of the leads from my search. I'd be happy to look and see if I found something that might also look interesting to you.

    You might also let the board here know where the car is. Somone might be able to take a look at it for you.
  7. 355f

    355f Formula Junior

    Nov 1, 2003
    There are more cars than buyers and there are other cars. I would no be forced into a contract race and I would definately have the car sent to a ferrari dealer to do the PPI. Whilst this is a cost- you made a comment that you dont want to be seeking a car with $20Kengine replacement. For yor information if you get the purchase wrong that could be your first service cost!!
  8. Texas Forever

    Texas Forever Seven Time F1 World Champ
    Rossa Subscribed

    Apr 28, 2003
    Bill, as usual, is right on the money. We have all gotten a bad case of buyer's lust at some point and recognize the symptoms: money burning a hole in your pocket, red mist, mumbling in your sleep, ignoring work and family while you spend hours on the Internet, drooling at the mouth.

    This is why the F-Chat support group is here for you. Because the first step is the hardest, I'll show you how it's done:

    Hi, my name is DrTax, and I have a major jones for cool cars. It doesn't matter how many I have, I must have more, and more, and more. Lately, I can't get my main man's P4 out of my mind. I must have one. It doesn't matter that there are no more to be had, I MUST FIND ONE! I don't care how much it costs. I'll force my wife to be a crack hoe, it doesn't matter. DO YOU KNOW WHERE ONE IS? Don't lie to me. I can see it in your eyes. You're holding out on me, you "female dog." "WHAP!" TAKE THAT YOU LAMBO SLUT! ARRRGGGGG! LET GO OF ME, I'M NOT DONE YET! @##@!%^@#^

    Dr "Crack is Whack" Tax

    ps Good luck on your search. Sometimes the hunt is best part.

  9. Kds

    Kds F1 World Champ

    There's a lot of 355's for sale....and their prices are not going up....

    Working under pressure when buying a used car is a recipe for me.......I sell used cars.
  10. 62 250 GTO

    62 250 GTO F1 Veteran

    Jan 9, 2004
    Nova Scotia Canada
    Full Name:
    Listen to the devil on this one. He speaks the truth.
  11. rossofiorano355

    rossofiorano355 Karting

    Dec 22, 2003
    NOLA - Bham
    Full Name:
    Take your time, no need to rush - there will be another car down the road. I looked for nearly a year to find a 355 that fit all of my conditions - worth the wait.
  12. Carnut

    Carnut F1 Rookie
    Rossa Subscribed

    Nov 3, 2003
    Gladwyne PA
    Full Name:
    Ghost, a friend of mine was in almost the same situation as you are a few months ago. I will tell you exactly what I told him, and things worked out very well for him. You live fairly close to a number of Ferrari dealers, call a few tell them what you are looking for, most dealers have access to many more cars than they may have on their floors, I know my dealer can usually find almost anything. This way they will check the car before you buy it, and you can go see the car yourself.
  13. jimpo1

    jimpo1 Two Time F1 World Champ
    Owner Silver Subscribed

    Jul 30, 2001
    Dallas, TX
    Full Name:
    Jim E
    I've got to agree w/ the majority here, don't let him rush you. You know what you need to do, and how to do it right. If it gets away, cest la vie.

    Now that I've said that, I've been right where you are now. I had the lust, the cash, and found the car and I bought mine sight unseen and had a contingency. I even let the selling dealer do the ppi! Learn from me grasshopper. Go slowly, do it right.
  14. milstanselnino

    milstanselnino Formula Junior

    Jan 8, 2004
    Full Name:
    Jon P.
    I agree with the majority here; don't be rushed. There are other cars out there.

    Also, I have a problem with your thought that you could set up a mechanism whereby you would get the deposit back if there are mechanical issues. It is difficult, because mechanical problems are usually a matter of degrees, and an issue to a buyer may well be no big deal to the seller.
  15. ghost

    ghost F1 World Champ
    Lifetime Rossa

    Dec 10, 2003
    I appreciate all the honest feedback. As painful as it is to admit ('cause you always want to think you can "do it"), you guys are right -- I'm a little caught up in the moment right now, and it would be foolish for me to let heart rule completely over head.

    I will talk to the seller, indicate where I stand on pricing, and if he is comfortable with agreeing to a period of exclusivity with me, ask him if he can respect my wishes to have the car appropriately checked out by the right technician at an authorized Ferrari Dealership.

    If he doesn't want to, I'll wait for the next one...

    Thanks again for the feedback. Will keep you guys posted.


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