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Old 12-31-2012, 12:02 PM   #1
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Consignment sales question

I have a question for the lawyers out there. In September I contracted with a well-known RV dealer to buy a New 2013 RV. I told the dealer that I had to sell by 2007 Country Coach Intrigue 530 to afford the deal. We negotiated a deal at the high limit of my ability to pay contingent upon allowing him to sell my RV through consignment. The dealer asked if I had been trying to sell my RV myself. I said that I had been trying for 3 months on the internet priced at $249,900 which is $15,000 under NADA LOW retail. He said that my price point was to high and told me that he would sell my coach under consignment if I wanted the new RV. I agreed and gave the dealer $20,000 with the contingency that my RV must be sold to complete the transaction. I agreed to accept $235,000 as my proceeds from the contingency arrangement to be payed into the new RV.
I waited a week and looked for my RV on line. I found it priced at $265,000. I called the dealer and asked why he thought he could sell the vehicle for a higher price when he distinctly told me that $249,900 was to high. He said "be patient, I know Country Coaches and the condition of your coach. I have connections in the RV sales world." I waited a month and called him again. He dropped the price to $259,900. Yesterday I received a call from the sales person. He stated that he wanted to remove the contingency that my RV must sell. I cannot do that because I certainly cannot afford two RVs.
My question is: Does not the RV dealer have a fudiciary responsibility to honestly attempt to sell an RV consigned to him? If he knows the price I had tried to sell the coach for and then places an even higher price on it, is he not telling me that he is not actually trying to sell my RV? How about the arrangement for my new RV? The dealer now says I have to remove the contingency if I want the new vehicle. I am over half way through the wait for my new Entegra Cornerstone (6 to 8 months) and do not feel I should have to break the agreement we have.
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Old 12-31-2012, 12:26 PM   #2
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I am no lawyer, and did not play one on TV.

The dealer is trying to net $235,000 for your rig. Perhaps he felt he needed the pricing room to deal with a possible trade-in transaction?

In your agreement, who gets any excess of sale proceeds over the $235,000?

Did you specify an advertised sale price in your transaction agreement?

It would appear to me, that the dealer is trying to make some money on the consignment transaction in addition to the new rig sale event. Perhaps more profit than he will get on the new rig sale.

But unless you have specific behavior language in the purchase/consignment agreement, the dealer has not violated the agreement or the spirit of the agreement unless the two questions above have different answers than I suspect.
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Old 12-31-2012, 12:27 PM   #3
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I'm sure this will come down to what you both legally signed for and hold proof of your transaction. You must have written proof then and only then do you have a leg to stand on. The old days of a handshake and taking a persons word are long gone. Hope this all works out for you.
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Old 12-31-2012, 12:53 PM   #4
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1) if you make a deal w/a snake, you will get bit.
2) the more control you give a snake over any part of any deal, the higher the odds you will get bit badly.
3) if a snake has a lot full of RV's and any sway over customers, he'll sell the RV's that net him the most profit, and you will get bit.
4) if you are standing around waiting for a snake to respect your legal rights, and the snake is more legal-savvy than you, you will get bit hard and with a paralyzing amount of venom.

I'm not saying this RV dealer is a snake. Just stating some simple truths. I've been involved in real estate deals since the '70s. Recently did a deal, & made sure I had all legal points on my side, as usual. The opposite party was a snake. I got bit. Repeatedly. Hard.

IIWMI'd cancel your deal, take the CC back, sell it, then go shopping w/cash. You will get what you get for your rig in today's market (good buyers are paying fair amounts for well found coaches), and get a better deal on a new one paying cash if you are a well educated cash buyer. That includes if you are paying cash to a new loan, which to the seller is the same as cash.
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Old 12-31-2012, 02:15 PM   #5
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Consignment sales

I asked to set the sale price but was not permitted to set it. (That should have been a big warning!) The dealer was to keep all the profit above the $235,000 for the time and trouble he put into the effort to sell my coach. (The effort appears to be close to none.) The buy-sell agreement is written and the time has expired for the consignment part. I was hoping not to have to wait extra time on the new Cornerstone. They sell pretty fast.. I would not doubt the dealer already has some one else lined up to buy it. I wonder what the 2014's will have on them. I may find out by default.
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Old 12-31-2012, 04:33 PM   #6
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This is just my opinion:

Knowing Entegra, I think they would quite interested in knowing that one of their dealers is behaving in such a manner.

Secondly, I would let the dealer know that you intend to share their actions and THEIR NAME on this forum. And that you intend to discuss it w/ Entegra.

That may get you farther than private litigious actions.

Good luck.
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Old 12-31-2012, 05:30 PM   #7
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Quote:
Originally Posted by DoctorH View Post
I asked to set the sale price but was not permitted to set it. (That should have been a big warning!) The dealer was to keep all the profit above the $235,000 for the time and trouble he put into the effort to sell my coach. (The effort appears to be close to none.) The buy-sell agreement is written and the time has expired for the consignment part. I was hoping not to have to wait extra time on the new Cornerstone. They sell pretty fast.. I would not doubt the dealer already has some one else lined up to buy it. I wonder what the 2014's will have on them. I may find out by default.
I'm an engineer not a lawyer, this lays out as a logic problem for me. But, sometimes emotion trumps logic.

I agree the dealer probably has another buyer lined up for the coach you have ordered. But, it does appear the dealer is working within the legal agreement between the two of you. With your consignment not sold, the dealer is probably within his rights.

It appears you have three choices and one cliff hanger approach:
--take your RV and get all the money you paid returned to you and walk away;
--ask the dealer to extend the current contract another xx days;
--get your pencil out and re-figure out what additional financial sacrifices you are willing to make, then go to the dealer and negotiate to have the dealer take your RV as a straight trade in.

--Cliff hanger--
1) Go to the dealer and mutually agree to terminate the current contract--this gets your money and RV back. You can then sell your RV on your own, which is how this journey started or you can proceed to step 2 with some of your money at risk.
2) Then negotiate a new contract for how much deposit money they want to hold your delivery position; and how long you have to cancel the order without putting up any more money. A deposit with no risk to them should be in the thousand(s) dollar range not the twenty thousand they already have of your money.
3) Take your now unencumbered RV back and sell it yourself before the drop dead date. Know that you may lose your deposit doing this. . . January and February aren't prime time selling months.

If you have a loan on your current RV and you are or will go underwater with any further sell price reductions. Then how bad do you really want the new Coach? Is it worth the financial hardships, the sleepless nights? Not an easy decision.
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Old 12-31-2012, 06:39 PM   #8
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Hey Doc....JMO but you're getting played. Sorry, but welcome to the real world of business. He really wants you to trade-in and he"s moving the pieces on the table to achieve this result. Nothing really wrong with what he's doing ( he's just a lot more experienced at this game than you)...so you can either can play along....or you can take your stuff and move-on a little wiser for the experience. However, unless you are prepared to sell the CC yourself....you're going to have pay someone (Dealer/Consigner/Auctioneer) to get the job done for you.
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Old 12-31-2012, 07:14 PM   #9
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If you decide to get your money back and start over, let him make his best price offer with trade in.
Then give him an offer that makes him look at you like you have 3 heads.
I did that.
They took it.
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Old 01-01-2013, 08:33 AM   #10
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If you want the Entegra, trade your old coach into them, take the hit. And LOVE your new coach.
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Old 01-01-2013, 08:43 AM   #11
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How does the sales tax work in your state mine, if you trade you pay the difference or sell and buy outright you take the big hit. Most dealers give you ow ball for something jack the price up so the can haggle with the future buyer to make their money. In your case they have no investment in it a win win situation.
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Old 01-01-2013, 10:29 AM   #12
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I'd say It's a ploy. I'd tell them that not only is the deal in effect, but that you wanted all your money back, plus a an amount for you time wasted, and that their answer would be the deciding factor in weather to take them to small claims court for the max allowed in that state.

All IMHO

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Old 01-02-2013, 01:09 PM   #13
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Good advice above. Terminate the buy order, get a refund (I HOPE you stipulated a refundable deposit if yours didn't sell in x months), take your coach back and start over again. Disappointing, to be sure, but hardly unusual.

You stacked the deck against yourself when you gave him the profit from the sale of your coach. He isn't going to ever sell it at his "cost", i.e. the $235k you would get. He loses money at that price, due to his overhead, salesman's commission, etc., so he has to charge more and he is motivated to charge a lot more. The Entegra he can sell anytime - it's a hot item.
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Old 01-02-2013, 01:19 PM   #14
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You asked about fiduciary responsibility, but that's a tough call if he is living up to his consignment contract (and he is, according to what you say). His asking price is about 10%-15% more than you want to get, which is in the normal range for a seller's commission on a consignment sale. Unless you can document that he misled you about the expected selling price, I think you are out of luck on the fiduciary angle.
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