some "private" sellers of classic cars really "traders"?|
where "traders" advertise cars for sale as "private" sales
have been seen occasionally before. The motivation for doing so is the possibility
of selling a car without the greater consumer liabilities that a "trader"
would have with a "trade" sale, but with the Consumer Protection from
Unfair Trading Regulations 2008, traders must not create the impression or
falsely claim they are acting for a purpose unrelated to their business - for
example, as a dealer selling a secondhand car by displaying it as for sale by
a "private" individual.
In this NEWS item we look at this
area of concern and also the particular case of commission sale arrangements
where "traders" offer cars for sale as agents for a "private"
owner and the disclosure reputable traders will make when operating on that basis.
our MGV8 Price Guide. More
See our other
information in our Pricewatch series. More
a car with a VES search
on the GOV.UK website.
on drafting an advert for a classic car for sale. More
our legal rights information on our buyinganmg.com website. More
disclosure of the seller's status (above) shown in an advert on a popular
online site providing adverts for classic cars for sale.
in secondhand car sales who offer an online advertising and sales service
for "private" sellers are increasing. This development in the UK
is based on a business model where a trader offers to advertise a car for sale
for a "private"seller via their trade website carrying online cars for
sale adverts. The trader responds to potential buyers by providing them with any
additional information, arranging for a viewing of the car, negotiating a sale
and then handling the payment, necessary paperwork and handover of the vehicle
to the buyer. In some cases the trader offers additional services for the seller
like the preparation of the car including cleaning and servicing and also the
display and storage of the car.
"Traders" offering a commission
sales service for "private" sellers
Many specialist traders offer
to sell a car for a "private" seller on a commission sale basis. For
a private seller there are many advantages with this type of service as the car
is included in the trader's advertising in magazines, newspapers and online, and
can also be put on display in their showroom. The "trader" often offers
additional services like preparing the car for display and sale, servicing the
car, undertaking repairs (for example stone chip touching up), responding to potential
buyers by providing them with any additional information, arranging for a viewing
of the car, negotiating a sale and then handling the payment, necessary paperwork
and handover of the vehicle to the buyer. For a "private" seller it
avoids a stream of "tyre kickers" rolling up at their house and any
security consequences as sadly classic car thefts are on the increase. For elderly
sellers this can be very attractive way of selling a classic car. Under this arrangement
the "trader" charges a commission for the services, usually an agreed
percentage of the sales amount. More
on commission sales
Commission sales - where a "trader"
handles the sale of a car for a "private" owner for a commission
a commission sale service is something leading MG specialists offer and feedback
from V8 Register members suggests they found the trader's services as both good
quality and effective, but of course they incurred the cost of the commission.
The useful advantage for the specialist trader with a commission sale is they
do not have to fund the commission sales stock because their customer owns the
car. The "private" owner of the car simply enters into an agreement
with the trader to market the car and probably also handle the vehicle preparation,
viewings, negotiations and finally closing the deal, almost certainly with a consultation
on the final price with the owner/customer before the deal is completed. In a
commission sale arrangement the "specialist trader" will probably
be acting as agent for the "private" seller.
protection when buying a classic car from a "trader"|
Consumer Protection from Unfair Trading Regulations 2008, traders must
not create the impression or falsely claim they are acting for a purpose unrelated
to their business - for example, as a dealer selling a secondhand car by displaying
it as for sale by a "private" individual. A vehicle offered for sale
by a trader must be fit for purpose and as described. A "trader" is
liable for faults with the vehicle not fully disclosed to the buyer before the
Buying a used car from a "private" seller
from a "private" seller you will not have the same consumer rights protection
as you would if buying from a "trader". A"private" seller
has less liability for the car - the vehicle should match the description given
by the seller and the car must be roadworthy. It is a criminal offence for anyone,
trader or private seller, to sell a car in an unroadworthy condition, unless the
fact that it is unroadworthy is made clear to the buyer.
of the seller's "private" or "trader" status
sites providing adverts for classic cars for sale require the advertiser to state
whether they are a "private" seller or selling as a "trader"
and then that designation is usually disclosed when the advert is posted to the
online site. That is certainly a requirement when advertising on the "Cars
for Sale" webpages on the V8 Website.
Are some "private"
sellers in fact "traders"?
Because the buyer's legal rights
are more limited when buying from a "private" seller, some "traders"
may advertise cars as "private" sellers. This type of misrepresentation
is not easy to spot prior to visiting the seller and in some cases even then the
buyer may be unaware a "private" seller is in fact a "trader".
See the outcome of a recent legal case where a car dealer was fined for pretending
to be a private seller.
on the recent case
So what are the clues to look for?
several cases we have seen online adverts for MGV8s classified as "private"
sellers and they have been traced to a "trader". So what could be seen
or discovered as clues?
> First the text of the adverts includes
terms with a style and content that suggests "trader speak"
some adverts with a car offered by a "private" seller you see frugal
information or none on the vehicle condition, maintenance record, age of the tyres
and whether it is a reimported car. In some cases the text of the advert includes
the offer of a part exchange which is not something most "private"
sellers would offer or be able to offer. Sometimes an advert has a paragraph with
an impressive resume of the origin and history of the model (lifted from David
Knowles' book or from our online buying guide) which is the type of sales bluster
some traders use to impress prospective "private" buyers.
Second the mobile telephone number in the information panel of the online advert
may be different to the telephone number in the text of the advert
some cases we have made checks and found one of those telephone numbers for what
is ostensibly a "private" seller can be traced to a "trader"
with a website offering both secondhand cars for sale and also offering online
advertising and sales services for "private" sellers.
MGV8s offered for sale in those cases as a "private" sale are in fact
being handled by the "trader" on a commission sale basis for
the owner of the car may not be clear. That should be clarified at some stage
by the seller when a private individual contacts the seller and discovers they
are a "trader" to discuss the car or when they view the car and certainly
when they begin commercial negotiations to buy the car.
See the further
comments below on the status of a car offered on a commission sale basis.
case of a trader offering a private owner's car for sale where the trader is acting
as a commission sale trader
status of a commission sale car offered for sale is a difficult call
vehicle is owned by a "private" seller but marketed and offered
for sale through the online advert made by a "trader" who is
providing sales services for the "private" seller under a commission
sale agreement. So is it a "private" or "trade" sale and how
should that seller status be noted on the online advert? Clearly some traders
in this situation simply say in their online advert that the car is offered as
"private" sale without mentioning the car is being handled on a commission
sale basis. But in doing so they run the risk of possible uneasiness of potential
buyers when the real "trader" role in the sale is revealed at a later
The key question is at what stage does the "commission sales
trader" disclose that the vehicle is not owned by them? Clearly as the
sale nears completion with the V5C paperwork and payment, the ownership of the
vehicle by their "private" customer will be revealed. Most reputable
commission sale traders would clarify their agency role quite early in the marketing
process, for example once they receive serious interest in a car by a buyer, not
least to comply with the requirements of the Consumer Protection from Unfair Trading
Regulations 2008 mentioned above.
Commission sale case study - Brown
Brown & Gammons are a well regarded specialist MG service
and parts provider with good workshops, parts stores and showrooms located in
Baldock in Hertfordshire just off the A1. They offer a commission sales arrangement
for MG owners wishing to sell their car. On our contacting Ron Gammons to discuss
this NEWS item he responded with some useful comments which give an idea of how
their commission sales arrangement works:
says "we are up front about a commission sale. Indeed the buyer has of course
the seller's name since its on the log book, we give a copy of the buyer's
invoice to the seller so they can talk. The seller gets a commission sale invoice
detailing the costs of any work we have carried out, the sale price, our agreed
commission and a cheque for the balance. We make the point that since its
not our car we cannot warrant it, any more than an estate agent warrants a house
they sell on behalf of an owner. However the buyer's comfort is that every car
is sent through our workshops and checked and anything that is wrong mechanically
is rectified or reported to both parties. While we do not warrant the car, our
business name is involved and we do our utmost to try and sort out any problems.
of the cars handled on a commission sale basis are old cars, T Types etc. and
we make the point that they are old and things can go wrong, but we will try and
spot the problems before a sale but if the worst happens we will try and sort
out a problem. It's worked for many years and I hope that it will continue to
When the car first comes to us for a commission sale we have it
through the workshop for a check, agree a likely sale price taking into account
any work agreed thats needed, and we agree a percentage of the sale price
as our commission and a minimum return. The car does not leave us until it's paid
for and as soon as the money is in the bank the sale is completed and the monies
paid out to the private seller as vendor. As I said the private seller is given
the name of the purchaser and contact details so that the purchase price can be
verified and thereby the seller is reassured that the old gag of reducing the
stated sale price cannot be pulled. In fact we often use some of the commission
to effect a sale!"
are on the buyinganmg.com website.