Golf mkVII Buyers - What was the deal closer?

[NewBuy]

Holy crap you already do all that! Sorry just read the complete FAQ now.

Good job!

You even guessed the deposit amount right! Unbelievable!

[ziggyboy]

You even guessed the deposit amount right! Unbelievable!

LOL I do this for work. I'm a IT business/solutions analyst and design systems around business processes....

[ziggyboy]

The only thing that I am skeptical about is how you claim a dealer accepting the offer is legally binding. I'm not saying it isn't, but how is the buyer protected when they accept a price of, say, $27k, then the dealership goes back and says "Actually, we made a mistake and we can't give it to you at $27k, but $28k instead." What sort of recourse does the buyer have if you have already released the money to the dealer?

As I suggested in my original process, fulfill the payment following the CC auth on dealer acceptance then maybe consider "releasing" the funds to the dealer after proof of a full contract being signed. The releasing bit can be that they cannot credit the money to their account (PayPal or bank) until proof of completed contract.

Because it may only take one dealership to try and do that to ruin the experience and slow your business. THe internet can be a powerful tool and the type of people who will initially use your service are the type of people who will post in these forums. I'm not being pessimistic but if it did happen to me, I will warn others on forums such as these and word travels fast with "car forum savvy" drivers....

[AdamD]

The only thing that I am skeptical about is how you claim a dealer accepting the offer is legally binding. I'm not saying it isn't, but how is the buyer protected when they accept a price of, say, $27k, then the dealership goes back and says "Actually, we made a mistake and we can't give it to you at $27k, but $28k instead." What sort of recourse does the buyer have if you have already released the money to the dealer?

A contract doesn't need to be signed to be legally binding. The parties simply need to agree (and it helps if the terms are clear when they do!). Agreement can be in many forms, and doesn't even need to be verbal. Acceptance of a deposit is likely to be considered agreement (although the terms under such circumstances may be up for debate). If the dealer accepts the deposit at the agreed price then the contract is binding, and they are bound to deliver the vehicle at the agreed price. In practice I would assume that the dealer would only enter into any contract of sale subject to their own standard terms of sale which may well give them recourse to get out of the contract should certain circumstances change (and may even extend to a "we got it wrong" - as to whether it's legal or not to impose such a term under contract law is another matter). Worst-case scenario, both parties exit the contract and the buyer is entitled to a full refund of the deposit.

[ziggyboy]

A contract doesn't need to be signed to be legally binding. The parties simply need to agree (and it helps if the terms are clear when they do!). Agreement can be in many forms, and doesn't even need to be verbal. Acceptance of a deposit is likely to be considered agreement (although the terms under such circumstances may be up for debate). If the dealer accepts the deposit at the agreed price then the contract is binding, and they are bound to deliver the vehicle at the agreed price. In practice I would assume that the dealer would only enter into any contract of sale subject to their own standard terms of sale which may well give them recourse to get out of the contract should certain circumstances change (and may even extend to a "we got it wrong" - as to whether it's legal or not to impose such a term under contract law is another matter). Worst-case scenario, both parties exit the contract and the buyer is entitled to a full refund of the deposit.

Even if the contract is technically binding, what will prevent this from happening? In the real world, no one sues for $500. Regulatory bodies such as Fair Trading are toothless tigers. They can write letters that demand payment but it it is as good as my grandma writing the same letter. Only a court can enforce this. Why? Because Fair Trading won't get their lawyers to sue a dealership for $500. In fact, if you do research, these bodies only go to court when many individuals are affected (ie. class action type cases). They won't legally represent one Joe Bloggs. You may take them to the small claims court but that should be the last resort. Even that, takes time, effort and more money.

Sure this can happen even in a face to face car sales transaction, but less likely. Having the web as a medium will also invite abuse from both sides. It's much easier to do this online than it is in real life. I can go to Coles, fill up my cart, have the cashier chick scan everything then when asked to pay, just walk away. Nothing illegal here, but as you can see it is much less likely to happen in person than online. I can log onto eBay, select "Buy Now" and just not pay for it. Admittedly I have done this once when I bought the wrong product. I had multiple eBay pages open and bought the wrong item. Seller threatened me, said I was legally bound to buy it. I ignored it. eBay dispute was initiated and I said I bought the wrong item. They eventually just closed it. Did I waste their time? Probably. Was it a legally binding sale? Probably.... but a court will probably just laugh if brought to their attention, especially for $200 when no money was transferred and no product/service rendered.

BUT.... even after all this I will try their service out. My partner is looking for a new car right now. Will test drive over the weekend and give the site a shot. We live in the ACT but don't mind buying from Sydney without ORC (NewBuy, does your site allow me to set this as a condition?).

[DV52]

Thanks for the positive comments DV52. As for fees NewBuy will invoice the dealer after the event for each successful transaction. The fee is a low fixed dollar amount per transaction, not a percentage of the car price.

James: I kinda knew the answer, but I had to ask - my appology! My (tongue-in-cheek) question was directed at the way that you phrased your response (no enmity intended). Whilst I'm still of the opinion that NewBuy is an interesting product, I didn't think that you had set-up a philanthropic organisation. In the end, the consumer always pays and that's probably the way that it should be!

Given my admittedly novice understanding of the way NewBuy works, I assume that what the Buyer is really doing when completing your proforma is bidding for the cost of a new car (with options), plus the cost of the (modest) fee that the seller passes back to the introduction agency. Nothing wrong with this, just a different way of answering Ziggyboy's question.

I've re-read your FAQ and I have one last question (I promise not to bother you any further). I assume that participating in your product does not prohibit the "punter" from independently seeking her own deals with prospective dealers. I'm not certain, but such a prohibition (if it existed) might fall foul of the third-line forcing provisions in our competition law. Anyway, what is the status of the punter's bid to NeyBuy if a dealer has received a price from you and the punter separately (and coincidentally) places the same bid to the same dealer - and it is accepted?

[NewBuy]

The only thing that I am skeptical about is how you claim a dealer accepting the offer is legally binding. I'm not saying it isn't, but how is the buyer protected when they accept a price of, say, $27k, then the dealership goes back and says "Actually, we made a mistake and we can't give it to you at $27k, but $28k instead." What sort of recourse does the buyer have if you have already released the money to the dealer?

As I suggested in my original process, fulfill the payment following the CC auth on dealer acceptance then maybe consider "releasing" the funds to the dealer after proof of a full contract being signed. The releasing bit can be that they cannot credit the money to their account (PayPal or bank) until proof of completed contract.

Because it may only take one dealership to try and do that to ruin the experience and slow your business. THe internet can be a powerful tool and the type of people who will initially use your service are the type of people who will post in these forums. I'm not being pessimistic but if it did happen to me, I will warn others on forums such as these and word travels fast with "car forum savvy" drivers....

Hi ziggyboy, as you suggest we do not intend to release the deposit to the dealer until they let us know a contract has been signed. We'll check our FAQs if that is not clear. Whatever the case, if anything goes wrong and the contract does not get signed we will refund the buyers deposit no questions asked.

[NewBuy]

James: I kinda knew the answer, but I had to ask - my appology! My (tongue-in-cheek) question was directed at the way that you phrased your response (no enmity intended). Whilst I'm still of the opinion that NewBuy is an interesting product, I didn't think that you had set-up a philanthropic organisation. In the end, the consumer always pays and that's probably the way that it should be!

Given my admittedly novice understanding of the way NewBuy works, I assume that what the Buyer is really doing when completing your proforma is bidding for the cost of a new car (with options), plus the cost of the (modest) fee that the seller passes back to the introduction agency. Nothing wrong with this, just a different way of answering Ziggyboy's question.

I've re-read your FAQ and I have one last question (I promise not to bother you any further). I assume that participating in your product does not prohibit the "punter" from independently seeking her own deals with prospective dealers. I'm not certain, but such a prohibition (if it existed) might fall foul of the third-line forcing provisions in our competition law. Anyway, what is the status of the punter's bid to NeyBuy if a dealer has received a price from you and the punter separately (and coincidentally) places the same bid to the same dealer - and it is accepted?

Hi DV52, yes I agree with how you have described what the punter is making an offer for.

If you use NewBuy you are not prohibited in any way from continuing to negotiate elsewhere. My only suggestion would be that you pull your NewBuy offer from the market before you agree to another deal.

Cheers
James