Sale or return insurance

[Ken_Code]

I’ll of course ask the dealer this, but because they may err in their response, I’ll ask here too.

I’ve got a car on sale or return with a local dealer, advertised at around £70,000.

Whether it sells via them or not I’ll not be driving it again, and want to transfer the insurance to my new car next week.

Leaving aside the issue of actually extracting money from them if the worst happens, and given that this is not addressed in the contract, would they be liable if it’s stolen or damaged while it’s in their possession?

[TownIdiot]

It depends what the sale or return contract says, but you'd be mad to leave it with them if that is excluded.

You should also ask to check their business cover - the road risks section and cover for vehicles left on the premises.

Edited - re read the op and see that it's excluded.
I'd be insisting on a very clear commitment that it's covered backed up by a copy of their insurance.

And you can then declare your vehicle sorn.

[Ken_Code]

TownIdiot said:

It depends what the sale or return contract says, but you'd be mad to leave it with them if that is excluded.

You should also ask to check their business cover - the road risks section and cover for vehicles left on the premises.

Edited - re read the op and see that it's excluded.
I'd be insisting on a very clear commitment that it's covered backed up by a copy of their insurance.

And you can then declare your vehicle sorn.

To be clear, it’s not mentioned as opposed to explicitly excluded.

Hopefully it sells before the cover ends, but if not I’ll be getting in touch to clarify.

[TownIdiot]

Ken_Code said:

To be clear, it’s not mentioned as opposed to explicitly excluded.

Hopefully it sells before the cover ends, but if not I’ll be getting in touch to clarify.

I'm not sure your cover will extend to the vehicle being used by a commercial entity for this purpose.

You will need to check.

[Ken_Code]

TownIdiot said:

I'm not sure your cover will extend to the vehicle being used by a commercial entity for this purpose.

You will need to check.

I’m mainly concerned about theft. It’s a well-respected firm who I expect don’t let idiots out in the cars, but the keys may be left on site overnight.

[TownIdiot]

Ken_Code said:

I’m mainly concerned about theft. It’s a well-respected firm who I expect don’t let idiots out in the cars, but the keys may be left on site overnight.

Your insurer MAY offer cover for when it's in the custody or control of a motor trader, but they may not. You are the insured but you won't be the last person in control of the vehicle should the worst happen.

It will be in the policy book, or just call them.

I'd absolutely expect a reputable dealer to have this cover in place.

[RSTurboPaul]

Wasn't there a thread recently on here somewhere about a company holding a sale-or-return vehicle (a Jag?? an Aston??) that had done something like get rid of it, pocket the cash, and then said 'good luck suing us for it, we'll just go bankrupt' - and had numerous reviews online reporting the same practice??


I appreciate this somewhat vague and apocryphal comment is neither helpful or reassuring... lol

[Ken_Code]

RSTurboPaul said:

Wasn't there a thread recently on here somewhere about a company holding a sale-or-return vehicle (a Jag?? an Aston??) that had done something like get rid of it, pocket the cash, and then said 'good luck suing us for it, we'll just go bankrupt' - and had numerous reviews online reporting the same practice??


I appreciate this somewhat vague and apocryphal comment is neither helpful or reassuring... lol

That’s one reason it’s going to a firm that tend to sell more expensive cars than one for whom a £70k car is high-end.

I may just call in tomorrow though to check it’s still there.

[alscar]

I’ve sold my last 2 cars via SOR and both contracts ( with separate Dealers ) have expressly mentioned that they will be insuring the vehicle whilst in their possession.
If your contract doesn’t mention then quite honestly I would be asking them sharpish.
It would concern me that they aren’t insuring it -what commission are they charging you ?
I would have thought it’s a fairly obvious point to ask at the outset though.
Your post and others suggests that your new car is only being insured for £40 for most of the year.
I assume that actually this isn’t the case as the SOR car is being substituted therefore the £40 is an adjustment ?

[NorthDave]

RSTurboPaul said:

Wasn't there a thread recently on here somewhere about a company holding a sale-or-return vehicle (a Jag?? an Aston??) that had done something like get rid of it, pocket the cash, and then said 'good luck suing us for it, we'll just go bankrupt' - and had numerous reviews online reporting the same practice??


I appreciate this somewhat vague and apocryphal comment is neither helpful or reassuring... lol

This happened to a mate with a Maserati years ago - they sold it on his behalf and then presented him with a fictitious invoice for loads of work they had to do to get the car up to scratch. When he queried the fact they hadn't contacted him beforehand they bounced the company and he got nothing.
When he started digging deeper they did it all the time.

[Ken_Code]

alscar said:

I’ve sold my last 2 cars via SOR and both contracts ( with separate Dealers ) have expressly mentioned that they will be insuring the vehicle whilst in their possession.
If your contract doesn’t mention then quite honestly I would be asking them sharpish.
It would concern me that they aren’t insuring it -what commission are they charging you ?
I would have thought it’s a fairly obvious point to ask at the outset though.
Your post and others suggests that your new car is only being insured for £40 for most of the year.
I assume that actually this isn’t the case as the SOR car is being substituted therefore the £40 is an adjustment ?

The quote to add the new car was £40, which I assumed was a mistake.

I’ve since taken up a quote of about £140 to switch to the new one (rather than add it) next week.

[CRA1G]

I seem to recall the saying ' SOR cars only exist because either the Dealer is skint or the customer wants over the odds'

[Ken_Code]

CRA1G said:

I seem to recall the saying ' SOR cars only exist because either the Dealer is skint or the customer wants over the odds'

Something that only an idiot would say.

[alscar]

CRA1G said:

I seem to recall the saying ' SOR cars only exist because either the Dealer is skint or the customer wants over the odds'

You certainly need to be very careful with the Dealer choice.
Best price achievable potentially is not necessarily the same as over the odds though.

[alscar]

Ken_Code said:

Something that only an idiot would say.

I wouldn’t be so impolite but not asking or knowing if your car is actually insured with them probably isn’t the best idea ?!
I’m sure it is although surprised it’s not shown on your contract.

[samoht]

CRA1G said:

I seem to recall the saying ' SOR cars only exist because either the Dealer is skint or the customer wants over the odds'

SoR makes sense though.

Selling to a dealer provides a number of benefits over selling privately, it saves the seller the hassle and possible security risks of dealing with punters, and can get a better price as the dealer provides consumer protection and finance facilities. Another benefit is that the person selling to a dealer gets their money straight away to buy their next car, rather than having to wait.

Naturally enough the dealer charges a margin to reflect these benefits, part of which is the cost of capital to pay you today and then have to wait until they can sell the car to recover the funds.

Most people need this as they need the money to buy their next car, so pay the margin.

However if you don't need the money straight away, it makes sense that there should be an option to have the other benefits of selling through a dealer without paying for the benefit of getting the cash now. In exchange you pay a smaller margin, so get a better price for your car.


The dealer isn't 'skint' to benefit from not having to fund £70k cost of stock, and the seller isn't wanting 'over the odds' to want to sell the car with a lower margin to reflect that benefit, it's a fair business transaction.


However it's also one that requires the seller to place a lot of trust in the dealer as there are many many ways for it to go wrong, the SCoM scam being one such sad story. But rather like escrow, the fact that it's often a scam doesn't mean it doesn't have legitimate uses in many fair transactions, to the benefit of both parties.

[Ken_Code]

alscar said:

I wouldn’t be so impolite but not asking or knowing if your car is actually insured with them probably isn’t the best idea ?!
I’m sure it is although surprised it’s not shown on your contract.

It’s insured by me at the moment, and nothing in my policy excludes its current location.

As I wrote above, I’ll be confirming details with them, but wanted to ask for people’s input here too.

On the question of the reasons for using dale or return, one major one is not wanting to have to deal with potential buyers myself, and not wanting to allow anyone to have the address at which most of my cars stay.

[Ken_Code]

samoht said:

SoR makes sense though.

Selling to a dealer provides a number of benefits over selling privately, it saves the seller the hassle and possible security risks of dealing with punters, and can get a better price as the dealer provides consumer protection and finance facilities. Another benefit is that the person selling to a dealer gets their money straight away to buy their next car, rather than having to wait.

Naturally enough the dealer charges a margin to reflect these benefits, part of which is the cost of capital to pay you today and then have to wait until they can sell the car to recover the funds.

Most people need this as they need the money to buy their next car, so pay the margin.

However if you don't need the money straight away, it makes sense that there should be an option to have the other benefits of selling through a dealer without paying for the benefit of getting the cash now. In exchange you pay a smaller margin, so get a better price for your car.


The dealer isn't 'skint' to benefit from not having to fund £70k cost of stock, and the seller isn't wanting 'over the odds' to want to sell the car with a lower margin to reflect that benefit, it's a fair business transaction.


However it's also one that requires the seller to place a lot of trust in the dealer as there are many many ways for it to go wrong, the SCoM scam being one such sad story. But rather like escrow, the fact that it's often a scam doesn't mean it doesn't have legitimate uses in many fair transactions, to the benefit of both parties.

Exactly. The dealer gets to have a pretty sports car on display, the chance to make money on finance, the customer gets the additional comfort of buying from a dealer and, again, of being able to sort the finance out at the dealership.

I should probably ask what the SCoM scam is, in case I need to worry about it.

Edited to add I looked it up, and it seems to be about asking a customer to help a dealer finance a (possibly nonexistent) car and then just keeping their money.

Hopefully that’s not a concern here as I’m not needing to pay any money over at any stage.

Edited by Ken_Code on Friday 24th May 11:06

[samoht]

Sorry not to be clearer, I never know what you're allowed to say on PH, but an example from 911uk.com of the kind of thing which can go wrong with SoR:

"He sold my red 911 in June, took the money, and then told me the sale had fallen through. He then invented a fictitious buyer, ..."

There are a few tales of cars sold on SoR where the buyer and seller have subsequently encountered one another in the car community and compared notes, and discovered a, shall we say, 'gap' between their respective interactions with the selling dealer.

The least harmful thing is simply to 'forget' to tell the owner that their car has sold for a month or two, thus easing cashflow as you don't have to pay them for an extra few months after getting the cash in.

The next rung of the ladder is reporting a sale price to the owner that's a couple of grand less than they actually got for the car, padding the already agreed sale fee.

Then you have claims that the car needs a load of bogus work or the buyer finds it's not as described, escalating up to outright non-payment and phoenixing as described.


None of this is to say that SoR is a bad idea, but it's worth being aware of the ways it can go wrong as the owner.

[Ken_Code]

I’ve not given them the V5, or the second key, which hopefully does reduce slightly the chance of any shenanigans.

This thread is making me a bit nervous now though, so I’ll have a drive over this afternoon to have a look at it.

I might prefer just selling it to a Lotus dealer for a couple of thousand pounds less if I’m going to start losing sleep over it.

This dealer sold my R8 for me a few years ago, and everything was above board and worked as it should, but I’m definitely starting to wonder if I’m doing the right thing.

Selling it from home isn’t an option I’m comfortable with.