Are some "private" sellers of classic cars really "traders"?

Cases 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.

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Posted: 170610
& Updated: 170615

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Typical disclosure of the seller's status (above) shown in an advert on a popular online site providing adverts for classic cars for sale.

Traders involved 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
Providing 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.
Consumer protection when buying a classic car from a "trader"
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. 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 sale.

Buying a used car from a "private" seller
Buying 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.”

Disclosure of the seller's "private" or "trader" status
Most online 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.
Report on the recent case

So what are the clues to look for?
In 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"
In 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
In 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.

Whether 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.

Particular case of a trader offering a private owner's car for sale where the trader is acting as a commission sale trader

The status of a commission sale car offered for sale is a difficult call

The 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 stage.

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 & Gammons
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:

Ron Gammons says "we are up front about a commission sale. Indeed the buyer has of course the seller's name since it’s 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 it’s 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.

Many 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 do so.

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 that’s 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!"

Details are on the website.