[Feffman]

Legal Articel From John Dranaes About Buying Elise Spot In line

Hi All:

Nice article by attorney John Dranaes from the June 2004 issue of Sports Car Market regarding the purchase of a spot in line for an Elise. The article is a PDF on the Lotus Ltd. web site.

Sports Car Market Elise Legal Article

Mark Pfeffer

 

[OneFastLotus]

cool, a mention of elisetalk too

 

[smoseley]

I can't see the file?

 

[smoseley]

Nevermind, I got it. Nice write-up!

 

[Later Apex]

Hey Feffman,

Have you talked to Dave at Behlmann Lotus in your town? I heard he was going to let that Chuck/Frank guy sell his spot in line after all. Is that true?

 

[Feffman]

Late Apex:

I spoke wtih Dave about the E-bay auction last week and Dave plainly told me whoever buys the Elise spot on E-bay will be getting a used car because they not sell it to anyone but the guy with the deposit.

Let's see $10K-$15K premium for a used car! HMMMM!

Mark Pfeffer - Grand Poobah St. Louis Area Lotus Lovers

 

[wallabyguy]

Late Apex:

I spoke wtih Dave about the E-bay auction last week and Dave plainly told me whoever buys the Elise spot on E-bay will be getting a used car because they not sell it to anyone but the guy with the deposit.

Let's see $10K-$15K premium for a used car! HMMMM!

Mark Pfeffer - Grand Poobah St. Louis Area Lotus Lovers

Princeton has the same policy. The cars is sold to the person with the Purchase Order, no one else. If they want they can sell it after they've purchased it but as is quoted above, it'll be a used vehicle. I wonder how many speculator cars will find their way to the market within the first couple of months after they have been left by the orginal buyers and the delaerships have taken back the rights to them?

 

[zvezdah1]

I certainly wouldnt fault the dealers for not allowing this, why sell a spot to someone at msrp to enable them to flip for a profit.
Chris

 

[tvacc]

Why would a dealer allow this.

It would appear to me that it would be best for all if the dealers would not allow this. And why should they. Why should they allow some speculators to make 3-5K...when if they wanted to...they could make it themselves....although I highly disapprove of marking up the car above sticker. that would be a deal breaker for me, just on principle.

On the other hand, if a person buys the car...then resells it..that is up to him.

and on the 3rd hand a contract is a contract and unless it says in the contract that it can be resold (the contract, not the car), the dealers have a very stable legal stance to fall back on. (ps...I am not a lawyer, but I have learned that unless something is stated...it does not apply)

 

[babak]

That was a good read thank you. On different note, why would it matter if it was a used car? During the Mini mania there were many people who were flipping their car, the warranty transfered and the speculator made off with bundle.

 

[TheProton]

One other thing to be aware of, at least here in California, is that the sales tax needs to be paid twice if the car is purchased and resold immediatly.

Where I live thats 8.5% of the purchase price, so its real money. This or course would only apply if the person selling a place in line had to buy the car to take delivery, and then resold it to a person that paid a high premium on Ebay. The only way around it that I know of is the person selling his spot would have to have a dealers licence.

Arnie has to pay off our deficit somehow!

 

[nickt]

In California (and probably elsewhere) you can apparently get around the sales tax problem by leasing. I don't know all the details, but in a lease the sales tax is paid over the life of the lease, so presumably the original owner transfers the lease to the new owner before very much if any sales tax has been paid, who can then either take over the lease payments or pay it off (including the sales tax).

What I don't know is how you do this without the usual sort of penalties that go with terminating a lease early. Perhaps a different sort of lease. Anyone know?

 

[sonza68]

In MO, it MAY be possible to get around the sales tax if the original owner were to flip it without registering the car. Here, you pay the sales tax at the license bureau when you register the car. If you never register it, you MAY be able to avoid the sales tax on the first transaction.

 

[babak]

Arnie has to pay off our deficit somehow!

Took me a while to figure out you mean Ahnold, no our Arnie J.

 

[smura]

You can also set up a limited liability company and give the dealer a resale certificate as a purchase for resale, then you can sell to the purchaser. You then have to collect sales tax from the purchaser and remit it to the state, but it can be done.

You can set up an LLC for a couple hundred bucks. Worth the money if you can flip the car for $10K.

Too bad I'll be driving my car and not selling it. It would be nice to make a quick profit. I should have ordered two!

 

[TheProton]

Took me a while to figure out you mean Ahnold, no our Arnie J.

I thought of that just after I posted, I meant of course Mr. Schwarzenegger.

At any rate in CA I believe the dealer has no choice but to charge tax and register the car at the time of the sale, and then when one transfers it to the new buyer it would ave to be reported to the state as well to change the title. On the second transaction the entire price of 60k (including EBay resale premium) should be reported, making the tax even worse!