Courtesy trade. Did I act inappropriatly?

[mikec]

I just had an experience, which bothers me to the point that I’d like some opinions. I originally posted this to the Marketplace buyers/sellers, but when I read the rules it says that is not a discussion forum, so I’ll post here. Sorry.

I struck a deal to sell my NSX for an agreed amount. A day was agreed upon where the buyer would drive up, and if the car was as represented, would hand me a cashier’s check and drive it back home.

In the meantime, I found a car I wanted to replace the NSX; a new Audi S4. I asked the local Porsche/Audi dealer if they would do a ‘courtesy trade’, which would save me sales tax on the new car. They explained to me that this procedure would be transparent to the buyer, would not cost him a dime more and not put him at risk in any way. When I asked the buyer to do the paperwork at the Audi dealer, he refused and appeared to insinuate that somehow I was shady or crooked. I pride myself in my honesty and integrity and this really disappointed me that someone would get that perception of me.

The difference was, if we didn’t go to the dealer, I would have signed the title and given it to him on the spot. Going through the dealer ‘courtesy trade’ the dealer would take the title and the buyer would be mailed a Virginia title in 7 to 10 days. BTW. This is a well known Audi dealer that sold two Carrara GT’s out of state last year and they assured me they are experienced in this matter.

I’d like your opinion. Was what I asked inappropriate or wrong?

Thanks
MikeC

 

[clarknm]

It doesn't sound like you were in the wrong. That said, it would freak me out and I would probably run.

 

[Understudy]

Did you talk to the buyer before they drove up to meet you? If you did, then I certainly don't think you acted inappopriately, although some people may feel obligated to continue with the original agreed upon deal. If you didn't notify them before they drove up for the transaction, then looking from their perspective it might look a bit fishy since nothing had previously been mentioned.

If the deal with the prospective buyer isn't dead yet, perhaps you could make them slightly more at ease by offering them a portion of the savings you'll receive from the reduction in sales tax on the new S4 by doing the courtesy trade in. They certainly shouldn't object to paying less for the car in the end if you fully explain the situation.

I certainly wouldn't worry about being seen as dishonest, since you know your intentions were good and on the up and up. I think reaching out once more to the buyer to explain and perhaps offering a discount via the saved tax will ease their worries too. Hope it works out for you!

 

[mikec]

Did you talk to the buyer before they drove up to meet you? !

Yes. We talked the night before. He called off the deal so he never drove up. The S4 deal came together for me that same day so I didn't know before hand. Yes. If he would have driven up, I would have been obligated to follow through, but I would have asked him for the favor. And yes.. I would have sent him home with a little cash in his pocket for doing me a favor.. and one of the nicest NSX's he'll ever come across.

Oh well

 

[comquat1]

Why does it matter how the title is transfered? Do you have an issue with signing the title and just giving it to him? Sounds like extra paperwork that really doesn't need to be done.... Can you enlighten why running it thru the dealer is better?

 

[mikec]

Why does it matter how the title is transfered? Do you have an issue with signing the title and just giving it to him? Sounds like extra paperwork that really doesn't need to be done.... Can you enlighten why running it thru the dealer is better?

Sure: If I run the paperwork through the dealer, it's as if I traded the NSX on the Audi thus saving me from paying Pennsylvania's 6% sales tax on the Audi, which would have been over $3,000.

If I would have signed the title over to him, gotten paid, then turned right around the same day and bought the Audi, I would have had to pay the sales tax. It was a way for me to save $3,000 and both I and the Audi dealer could not see how it could have inconvienced him or put him at risk. I think he got spooked because he didn't understand it, or thought i was shady.

 

[rbirling]

You can't be blamed for asking the guy if he was willing to do this.
But he can't be blamed for getting spooked. Just one of those
frustrating situations. :frown:

 

[gtr]

Sure: If I run the paperwork through the dealer, it's as if I traded the NSX on the Audi thus saving me from paying Pennsylvania's 6% sales tax on the Audi, which would have been over $3,000.

If I would have signed the title over to him, gotten paid, then turned right around the same day and bought the Audi, I would have had to pay the sales tax. It was a way for me to save $3,000 and both I and the Audi dealer could not see how it could have inconvienced him or put him at risk. I think he got spooked because he didn't understand it, or thought i was shady.

I don't think we have trade in tax breaks in Michigan for cars but I feel you should have given him an option instead of pushing towards it. I feel many would run just because you made a plan and you handle it a different way. If you has simply explained it and given that option form the begining in return for a better price for him perhaps the deal would have gone thru. Anyways, good luck with your sale.

 

[Craneboy]

Well, yeah, running it through it the dealer is better for YOU because as you say, it saves YOU the sales tax. I bet the buyer walked because it FORCES the buyer to both pay full sales tax and transfer the vehicle in to his (or her) name immediately. Why should you save the sales tax and force the buyer to pay full tax? According to urban legend, one of the reasons to buy a vehicle from a private seller is to possibly avoid some of the sales tax by under reporting the sales price by a little (or a lot, depends how daring your are). Now of course I have never done this, I have just heard reports of it being done.

If I had a deal with a private seller for cash on a car with a clear (no lienholder) title, and the night before I was going to pick it up, he changed the deal as you did and wanted to run it through a dealer to save himself money and cost me some, I would have walked, too. So in my opinion, yes, you did act inappropriatly. You had a deal with somebody and then you changed the terms at the last minute.

 

[Zennsx]

The dealer simply trades your car in towards your new purchase then sells your trade to the new owner for the agreed price. I dont think you did anything wrong.

 

[mikec]

Crainboy. You have a point. I didn't think of that. If he would have brought that up, we could have agreed on a lesser "trade in" amount that would have suited him.

ehh... a lesson learned.

 

[SilverStone05]

Yea...it sounds like you are a really honest guy...however.....when I'm making car purchases, things like this disenchant me. I'd probably have done the same thing the buyer did and leave. Just being honest.

Unfortunate situation.

 

[schuey1010]

Well, yeah, running it through it the dealer is better for YOU because as you say, it saves YOU the sales tax. I bet the seller walked, because it FORCES the buyer to both pay full sales tax and transfer the vehicle in to his (or her) name immediately. Why should you save the sales tax and force the seller to pay full tax?

This is just what I was going to say. He would have saved mucho on under valuing the car in his state as opposed to paying the full amount at the dealer. Yes, that is why people love to buy from a private party instead of the dealer.

 

[heySkippy]

You might have offered to share the money you saved with the buyer. That could have swayed him back to your side.

 

[NemesisX]

Mike,
I can understand you wanting to go thru the dealer... Would you have kept the deal if he wanted half of what you would save?? I would have asked you for that if its worth your...sorry, our trouble.

 

[Larry Bastanza]

And yes.. I would have sent him home with a little cash in his pocket for doing me a favor.. (

Did you offer that cash immediately up front if he were to agree? Would you have split the difference with him ($1500)? I am not getting the impression the "incentive" for the buyer was on the table as part of the change in the deal up front.

Most times it is the "approach" that makes the difference. If you said: "I have a possibility to save you $1500 on the deal, are you interested?" that may have been more acceptable to the buyer. JMO

Regards,
LarryB

 

[NsXMas]

The silver lining is that the original buyer may not have been ready to buy the NSX anyway.

If I was REALLY interested in an NSX, given how rare they are, I'd have no problems at least driving up to check the car out. If the seller wanted to discuss the dealer trade idea, I'd listen, and then decline if it really made me uncomfortable.

So IMHO Mike you just filtered out a casual looker, not a serious buyer. Nothing lost in this case.

I wouldn't worry about it at all.

 

[BioBanker]

I dont know how it is done where you are, but here, any savings that you may get as a result of doing this are entirely offset by increased costs.

Which means that it is a zero sum game. If his goal is to spend no more, the only way to do that is discount the car at your end, which means you get less.

Ie if you save $3k and offer him $1500, he is still paying $1500 more than originally planned. No one wouldnt think that bumping the price the day prior to the transaction was acceptable IMO.

Id call the dealer for clarification about what the cost to the buyer are. At that point you may be able to call and better explain to the former buyer how it would effect them. If you find, and you probably will, that the cost to the buyer has increased, you can call and explain that too and offer to proceed as originally outlined.

The search for a good NSX is a long process. If you can step back and regain the confidence of the buyer, chances are that person will look at the alternatives and reconsider walking.

 

[NsXMas]

I dont know how it is done where you are, but here, any savings that you may get as a result of doing this are entirely offset by increased costs.

Which means that it is a zero sum game. If his goal is to spend no more, the only way to do that is discount the car at your end, which means you get less.

Ie if you save $3k and offer him $1500, he is still paying $1500 more than originally planned. No one wouldnt think that bumping the price the day prior to the transaction was acceptable IMO.

Id call the dealer for clarification about what the cost to the buyer are. At that point you may be able to call and better explain to the former buyer how it would effect them. If you find, and you probably will, that the cost to the buyer has increased, you can call and explain that too and offer to proceed as originally outlined.

The search for a good NSX is a long process. If you can step back and regain the confidence of the buyer, chances are that person will look at the alternatives and reconsider walking.

if you read the original post, Mike says the dealer assured him that the NSX will not cost the buyer a penny (ok dime) more going through the dealer... it would be transparent to the buyer, except the title would go through the dealer.

 

[Meeyatch1]

...I think he got spooked because he didn't understand it, or thought i was shady.

I agree with you. People fear that which they do not understand.

 

[DocL]

Did the buyer have financing? If he did, and the car was ultimately purchased as Mike proposed, the financing may have been voided and he probably would have to apply for a new loan since the seller has changed.

 

[steveny]

So...where is your NSX now? Did the dealer get stuck with it or did you have to make the difference up in cash and get the NSX back?

 

[zahntech]

Going through the dealer ‘courtesy trade’ the dealer would take the title and the buyer would be mailed a Virginia title in 7 to 10 days.

The dealer would technically own the NSX at the point when you "trade" it in at that point they could raise the price if they wanted....they said they wouldn't but are car dealers to be trusted on avg?....(The Kid not included:wink: )..and making a deal with a private party and then having to wait for a dealer to do the paperwork and send a title would not be acceptable if I were buying a car...JMHO


The idea that the buyer was not ready to buy or just wasting your time because they didn't want to deal with the dealer involved is really unfounded.

 

[NsXMas]

..The idea that the buyer was not ready to buy or just wasting your time because they didn't want to deal with the dealer involved is really unfounded.

I disagree.

What would it have hurt the buyer to come and at least inspect the car in person? And why couldn't he have said "no" to the dealer aspect, and say "I want the title now, or no deal?"

A serious buyer would at least take a look at the car, and negotiate. It didn't sound like the other buyer did either, especially for a rare car like the NSX.

 

[zahntech]

Why would the buyer waste his time if he knew that the seller wanted to make a deal he didn't like?....just because you want to buy an NSX does not mean you are Donald Trump and ready to start battling it out over the negotiating table......there are many NSXs for sale.