Selling a car for a customer

[Pringle43 0]

I've been in the trade a year or so and was asked if we would sell a Honda Civic for a customer.

we agreed and I advertised the car with a warranty etc, I didn't advertise as selling on behalf of someone else.

The car sold and as such I then effectively purchased the car from the seller and sold it on.  The new buyer now has found issues, who should pay to rectify, myself or should I go back to her as it was her car I was selling?

I could argue I was agent but I guess I should have advertised it was being sold on behalf of her.. It's not an expensive vehicle £9,000 but the repair could be a few hundred pounds and I didn't make that out of the deal.

 

[Max Branning 149]

You sold the car so you are 100% responsible for any comebacks. The fact that you only made a couple of hundred out of the deal is irrelevant.

[It's me 615]

you are responsible

good thing is its a low ball repair figure

my advice learn from it and never do it again

its like buying a car back after a year because you had a good drink out of it first time round and greed makes you repurchase it ,unfortunately 9/10 its a bad decision

[Pringle43 0]

Thanks for the quick responses, could it not be argued I acted as agent?

Should I have made it clear in the advert and got them to pay her directly and me to invoice for a commission?

[BHM 994]

You. 

If you didn't make more than a few hundred quid on a £9K car you've worked for too small a margin/given the Civic's original owner too much.

As for your small profit, as a previous contributor commented, that is irrelevant, as it would be even if you sold it at a loss. Many years ago as a fresh faced trader I was called in by the local TS for a chat. As they put it to me "Just because you buy a cheap loaf of bread on its sell by date from Tesco for 20 pence you, as a consumer, don't expect it to poison you. It has to be fit for purpose, i.e. safe to eat. The fact the bread is being sold at a loss is irrelevant".

[Max Branning 149]

25 minutes ago, Pringle43 said:

Thanks for the quick responses, could it not be argued I acted as agent?

Should I have made it clear in the advert and got them to pay her directly and me to invoice for a commission?

Why would you bother with all the hassle?

When you was asked if you could sell the car you should of bought the car into stock like any other car you would normally buy and paid accordingly for it. leaving yourself your usual margin.

If it was not something you would of normally stock or would want to buy then you should of just said no to the customer and let them sell the car themselves.

 

[trade vet 704]

And there is more........When the VAT inspector sees a £9k car with a very low margin,you may have a problem and could be assessed.It happened to me on a similar " charity deal ",    never again.

[Pringle43 0]

Thanks for the comments, looks like I'll need to cover the repair bill, I wonder how I stand if the customer decides they want their money back, it's past the 30 days so not a big concern but would I need to stand the cost also.

 

if I was to act as an agent and sell on behalf of someone what would I need to do to protect myself? Advertise as being for sale for someone else and get them to pay them direct?

[Trident 24]

You sold the car, you didn't give the guy the owners number and say 'speak to him' so your liable for the lot, refund and all i'm afraid, as you first mentioned you effectively bought the car off the guy once an agreement to sell was made between you and the buyer... If you are an agent, you are effectively introducing the buyer to the seller, the seller might give you a cut, but the buyer is under no illusion you have nothing to do with the sale, ie don't put it on your letter headed invoice, don't warrant yourself etc etc

 

[Pringle43 0]

How should I do this in the future to protect me?

[Max Branning 149]

1 hour ago, Pringle43 said:

How should I do this in the future to protect me?

Do not sell cars on other peoples behalf.

Buy the car into stock if you want it and pay accordingly.

[Arfur Dealy 823]

Don't do it. Unless you sell it as per the rules of the CRA stating it's a customers car. Cover your self

[LISL 7]

Got absolutely anally violated once with this when I was starting out, never again

[Pringle43 0]

Thanks for the advice, yes I think I will need to put this one down to experience.  I think even if I had told them it was sold on someone else's behalf I tripped myself up as offered a full warranty and took payment via bank transfer into our business account.

[FHP11 8]

9 hours ago, trade vet said:

And there is more........When the VAT inspector sees a £9k car with a very low margin,you may have a problem and could be assessed

Why would a low margin cause you a problem?

 

Surely you are free to decide what you want your margin to be, so long as you have physically made a profit on a car and aren't selling at a loss, I struggle to see why this could cause any problem?

[trade vet 704]

53 minutes ago, FHP11 said:

Why would a low margin cause you a problem?

 

Surely you are free to decide what you want your margin to be, so long as you have physically made a profit on a car and aren't selling at a loss, I struggle to see why this could cause any problem?

If you are a retailer and the vehicle is in and out of stock for little or no  profit it can set alarm bells ringing.Old stock is OK.This is what happened to us.We had sold a car on behalf of a regular customer whose circumstances had changed.The gross profit from memory was about £150.The Vat inspector was suspicious that undeclared cash may also have been paid! We just let the inspector  assess us on top of some other things,they have to get something extra!                                                                                    Another one I recall,we had bought,paid for and had delivered some stock from Manheim,one of them was not ours.So we were refunded and the stock book showed that the purchase and sales price were the same.The Vat inspector again was suspicious,made enquiries and this time eventually accepted our explanation.These are just small things,wait until you are chosen for a HMRC  random enquiry!

[FHP11 8]

21 minutes ago, trade vet said:

If you are a retailer and the vehicle is in and out of stock for little or no  profit it can set alarm bells ringing.Old stock is OK.This is what happened to us.We had sold a car on behalf of a regular customer whose circumstances had changed.The gross profit from memory was about £150.The Vat inspector was suspicious that undeclared cash may also have been paid! We just let the inspector  assess us on top of some other things,they have to get something extra!                                                                                    Another one I recall,we had bought,paid for and had delivered some stock from Manheim,one of them was not ours.So we were refunded and the stock book showed that the purchase and sales price were the same.The Vat inspector again was suspicious,made enquiries and this time eventually accepted our explanation.These are just small things,wait until you are chosen for a HMRC  random enquiry!

 

Not thought about it like that, must just be my innocent mind!

I can understand why a short turnaround with a low margin could raise an eyebrow in the sense of wondering if cash was exchanged on top.

I thought there was a suggestion that a low margin in itself was somehow a problem, as I know on a number of occasions where we have sold customer owned vehicles on we have taken quite a low margin on the basis that we never had any capital invested in it, and a couple of our staff have had trade ins at a little bit above what we paid for them. My logic has always been that if the company did make a profit, then nobody has benefitted illegitimately.

 

Had an inspection surrounding PAYE etc but not one from the VAT man and been going about 8 years, so I'm not looking forward to one. Don't do anything wrong, but still, the idea of someone pouring over our records doesn't fill me with joy.