Thinking About Buying a Classic Car? Follow These 5 Tips
We are grateful to Guild Commercial Partner Nigel Adams from Goodman Derrick LLP for letting us share this article with you. It is a synopsis of a seminar he gave in November 2016, and gives the inside track on 5 tips to follow when looking to buy a classic car.
STEP 1: Homework
Work out what sort or car are you after and ask yourself why that particular type? Are you looking for a good investment? Are you looking to use the car rallying?
Buying for investment carries risk as nobody knows what will happen to prices.
STEP 2: Research
Check the available guides as to the correct price to pay.
If you are interested in using the car for racing or rallying – check what eligibility rules apply.
Find out what the car is like to own (should you expect large costs of upkeep?) by contacting relevant car clubs. Check if there is a support network for parts and know-how.
STEP 3: Think about who you are buying from
Many buyers deal with classic car dealer or buy at auction. Whomever you buy from there can be risks involved as not all vendors are reputable!
Protect yourself by checking up – as far as possible – on who you are dealing with:
- Are they an established dealer or auction house?
- What does your research on the internet tell you about them?
- Have you asked around about their reputation?
If buying at auction – go to one or two so that you familiarise yourself with the auction process first.
STEP 4: Look carefully at what you are thinking of buying
Sounds obvious as everyone looks, but how closely do buyers inspect before buying and with what expertise or knowledge of the car in question?
It is well worth paying an independent expert to view a car with you before buying. They will help you:
- Check the car is what it is said to be.
- Determine how much of the car is likely to be original.
- Establish if the car has been cared for/restored properly – or if the work has been done at home.
- Has the car been in an accident
- What the history file tells you
- Offer views on price
There will be limits to any inspection though – a dealer may be willing to let you have a good look (perhaps you can have the vehicle on a hoist, start the engine and road test the car etc), but at an auction the auction house is likely to limit you to a visual inspection only.
It is hard to detect hidden problems deep within an engine and other inaccessible places on a car and so any inspection will reduce the risks of buying a bad car, but will not eliminate all risk.
STEP 5: Contract with care!
Most people focus on price, but that is just one of various factors to consider.
At an auction you will probably already be bound by the T&Cs of the auction house with very little room for haggling over terms (save perhaps payment terms). You should therefore familiarise yourself with the auction T&Cs before the auction – this is especially important if buying abroad.
If you are buying from a dealer you are likely to be presented with something to sign, but do not sign anything without reading it first. Most dealers will be willing to adjust their standard terms to get the deal done, so do not be shy about asking for this.
Notable matters to be included in any contract are:
- Proper description of the vehicle;
- Build date, chassis and engine numbers;
- Do you want matching numbers car – specify that in the contract;
- Set out any special payment terms (is any up front payment refundable – in what specific circumstances?);
- If any work is to be done before collection/delivery – set out in detail what it is;
- What comes with the car itself – are you getting the registration number, spare parts, replaced parts, spare keys, a the original history file? Include in writing all these items where relevant.
In addition to the above it is important to check you are clear about what the vendor of the car confirms in the contract, namely:
- That the vendor has good title to the car which will be passed to you;
- There are no third party claims out there to ownership or and share of ownership;
- Which parts of the car are original and does the car have a recorded history;
- What is the mechanical condition of the car – many classic cars are sold as “collector items” and there is no warranty the car will work, reliably or at all.
Buying an old car will always carry some risk, but by following as many of the points outlined as possible, the risks can be minimised.