Alan Smithee

No, doc. As I stated earlier in the thread, it's not that simple; nobody can 'reasonably' assume their car will be worth the same in two months as it is today, even if it is not driven and during a healthy economy. Therefore it is not 'reasonable' to uphold an agreement stating same. And in CA, a potential car buyer has every right to refuse delivery for any reason and receive their deposit back.

CDH911C2S

The Dealership did agree to a future value of the trade-in car in writing. There was a small allowance/penalty for mileage($2500) and a line of language concerning the condition and inspection of the vehicle...i.e. if the vehicle were damaged and not in "mint" condition as stated by me.

The dealership was upset with the previous Sales Manager(let go about 45 days ago I was told) for agreeing to buy a vehicle without a physical inspection. In Nevada there is a small tax advantage to a trade-in being part of the transaction(in this case @ $5,000) so the trade-in value works out to be higher in the final reconcile. Hence the reason for the trade.

The MAIN reason this deal is not being honored by the Dealer, is the Economy. An agreement concering the purchase price, trade-in price, and delivery expenses had been reached and signed by the New Car Sales Manager for the Dealership and myself as well.

A primary reason most people use written agreements is to hold each other accoutable. This is a large transaction that depends on both parties acting ethically and performing as outlined in an agreement(contract). Buying some jewelry from vendors on the beach in Mexico turns out to be more pleasant than buying a car...Once the negotiation is done, the deal is complete.

Obviously, there are dealerships and people that can be trusted. I will buy another Porsche, but I will use this transaction and all of its' disappointments to only purchase a car that is on a dealers lot(ordering a car right now seems to volatile). Someone posted the opinion that I was ignorant and deserved this outcome...buyers beware defense I guess? I guess my parents raised me a little differently. When someone breaks their promise, it is their fault, not yours.

So a poor economy allows the dealer to abandon agreements without penalty? If I backed out of the deal, I should lose my deposit..agreed. I wanted to conclude the deal, as agreed, and the Dealer changed the terms? How is that ethical?

Some valid points have been raised, but some of the rationalization for breaking the agreement are short-sighted. To those people who defend the dealers actions...what if your employer decided to reduce your salary or pay(commission) for work that had already been completed...your paycheck was reduced by say 25% from your agreed upon salary(contract or letter of employment)...I am guessing you would be very disappointed and possibly upset

Our economy depends on people and organizations performing or discharging their contractual agreements. If companies or people simply ignored or decided to arbitrarily and ignore their contractual obligations...imagine the resluting chaos.

abe

Well, tell that to all the workers who thought that they were going to have a job for a long time but now they have none as a result of the economy. I don't think they are shedding any tears because you couldn't get the expensive Porsche....not going to get much sympathy there. We need to get real here....money talks bs walks. I didn't make the rules nor do I think its right...but when companies are going bankrupt, its every man for themselves. Don't expect anyone to make a business deal loose money...the economy today is very dynamic, got to go with flow or you will be sucked under.

abe

Likemystoppie?

Unfortunately myfriend we don't live in an ideal world.


MY employer has changed my pay-plan since I've been here in Ohio. I therefore have two choices; stay and accept or leave.

I chose to stay. That doesn't mean I've not had concessions given to me to do so. But the reality is; what I agreed to 3 years ago isn't what's going on TODAY.

Things happen; but we always have choices.

To your last point: That scenario is already existing in todays world. We are IN that chaos; and you're experiencing the ripple effect.

997, esq

+1. The real reason to honor agreements is that it's the right thing to do (i.e., morally), and because you don't want to alienate customers. The litigation risk is minimal, given the cost of litigation.

FWIW, if there was a binding agreement to given a price on a trade-in, then the dealer is likely bound, regardless of the deterioration of the used car market. If the deal terms were "fmv" or some loose talk about "we'll take care of you" or a ballpark range, then likely not. FWIW, if I was trading in a car, I would never agree to order without setting the trade-in value in stone at the time of ordering. Otherwise, you're just asking for a low-ball trade in offer when your car comes in.

997, esq

Are you sure this is true? I don't see why you couldn't agree to purchase the car absent a material problem -- i.e., you lose the deposit if you don't buy. Usually contracting parties can set the terms of the deal...

stumil

At the risk of getting lit up by my fellow Rennlist members, I still must agree with Stoppie. Adverse material change has happened since deal was contemplated (not consumated). The buyer has my deepest sympathies, but it's truly a new economic reality out there. How many car dealers (all brands - not just Porsche) will still be in business this time next year? My guess is that 25% or more disappear. That's a major sea change in my view.

docjackson1

i am not an attorney-it sounds like you are , but i agree with you. in the end though, i agree that if the dealer is going to reneg, it is cheaper and more practical to just move on. what the poster should do is to use the same reasoning that the dealers online here and others are using-use the new economic situation, find a dealer who is really desperate to sell a car of the pster's liking and really light up that dealer by negotiating a great seller's deal with a big discount. that's what i would do-i would treat the system back the same way that it just treated me. after a big discount, he could absorb a crumby trade in. i agree with what others had said-honest people would behave in an honest way regardless. i think the poster has a gripe, and if i was him, i would take it out on some other dealer. as i told in a previous story, it doesn't have to happen that way (manhattan motorcars upholding their deal with me with similar circumstances).

docjackson1

just one more point-let's say somehow, all the customers who odered cars a few months ago for deliveries around now and for next few months read this thread-they now say "hey, market conditions have changed", they then say sorry charley to the dealers, and tell them that the 3-5% discount that they negotiated doesn't apply to today's market conditions, in fact, they all think that they should be paying invoice or less for their car that was delivered to your dealership yesterday. they tell you i will give you $85,000 for that $99,500 car that they spec'd out in yellow and tan at rushnak (where according to california law, they can't even keep the deposit) let me ask you, what do you think would start happening to all the porsche dealers, and the jobs of their employess, if all the buyers started to behave like this-let's call it a "today's market mentality"?

plz

Nice one doc, I like it!

stumil

Enjoyed reading docjackson1's post. It makes me think me previous estimate of 25% dealer failure rate (all dealers not just Porsche) is far too optimistic. Please bear in mind that's not what I want to see happen.

docjackson1

how timely this is-a doctor works for me-he went into a mercedes dealer and signed a contract to buy a used benz, one of the cars with a special warranty (certified car?) anyways, contract was signed by all parties, he goes to pick up car after cleaning out his car (there was a trade-in involved) and they inform him that the used car manager has to look at his car (even though someone looked at it when he was there first time and signed order agreeing to trade in value). the used car manager looks at it and all of a sudden, he is allowing 3 grand less (no damage, just bad market he says). my employee says that they signed contract and took a $500 deposit, they say they just aren't doing the deal. the more dealerships that behave like this and blame it on the economy, the more dealerships that will close their doors-these are just dishonest business people looking for a reason to act dishonestly.

tsmith

A few years ago I ordered a new M3 from a southern California BMW dealer. We had agreed on the price, signed the agreement, and I put down a $5K deposit. There was no trade-in involved. Shortly before the expected delivery date, the sales manager called and said that they would not honor the agreed price. If I wanted the car, he said, I would have to pay an additional $10K. When I mentioned the fact that we had a signed contract, he said that if I wanted to sue them, I could go right ahead.

I did let it go (after getting my deposit back) and instead of buying another M3 I bought my first Porsche. I've never looked back.

abe

My intro into car buying business was when my wife and I wanted to by our first new car, a VW Jetta...got a good deal, but manager insisted we go out there and if I could find a better deal he would match it. Came back, he backed away and asked me if I would give him $500 over invoice...which was much higher than the first negotiated price. The old bait and switch....we walked away. About a year later the the state closed them down, something to do with fraud. Thirty years later still learning.
My best story came from my Italian friend from Chicago who's father buys a car for 3k after a 1k down payment, only to find out the dealer loan was for 3 instead of 2k. So, his uncle and father (who was naive) go do the dealership and his uncle goes in tells the manager how beautiful his dealership was and it would be ashamed if something were to happen to him and his dealership. When his uncle came back to the car he told his brother (friends father) that the manager was really sorry for the mistake. He gave him back the $1000 dollars + another $1000 cause he felt bad. His new loan was also reduced to 2k.
Ahhhh, the good old days...
abe

Dr. Car

The notion that someone can back out of a contract because the deal has become financially less advantageous than it looked at the time of entering into the contract is the sort of thinking that gives lawyers like me plenty to do. A change in value of a commodity doesn't amount to force majeure - that's war, riot, strike, special crime, Act of God (flood, quake, volcano). A sizeable portion of commerce is based upon contracting parties taking calculated risks about the price of things which fluctuate in value. For example, "futures," long term supply contracts, construction contracts... etc.

Now in this case if Rusnak had entered a contract to purchase the trade-in for $X and sell the new car for $Y, and then renegs and will only pay $X minus $13,000 for the trade-in, the buyer's damages are not simply $13,000. The buyer has a duty to mitigate damages by looking for the next best deal he can get. Supposing that he is able to sell his car privately for $X minus $10,000, and in this buyer's market he is able to buy the new car he wants for $2500 less under sticker price than his $Y deal at Rusnak, his total damages would be $7500. That happens to be the jurisdictional limit of small claims court in California, and if the OP is right about the contractual obligations, he could have a winner in small claims court.

People with claims over the jursidictional amount can still file their action as small claims (at least in California), but the award will be limited to $7500. The advantages in small claims are that procedures and evidentiary rules are relaxed, and nobody can be represented by a lawyer. I am told by a dealer service manager that customers have a decided advantage over dealers in small claims court.

Now, as for Rusnak, I had an interesting experience with them today. I received a voicemail message in response to the Craigs List ad for my 997 from someone identifying himself as a Rusnak salesman. I called back and he said the dealership was interested in buying my car. He asked me a lot of specific questions about the car, got the VIN and pulled up the build sheet. He said he'd talk to his manager about what they could pay, and he'd call me back. When he did call back, he said that cars like mine are selling in the $54-55,000 range, hinted he could offer more, and then asked what my bottom line price is. I said (politely) that my ad asks for $63,000, that I don't want to reveal what my "bottom line" is, but do you have an offer (like he had forecast he would deliver)? He ended the conversation then, saying, "well if you change your mind, call me back." I surmise that his favored negotiation tactic is to get a "bottom line" from a seller and then beat the person down from that number. But why cut things off if he still has an interested seller on the phone?

His pretense of ending the first call to come up with an offer was just a tactic. But I went through some gamesmanship from another dealer when I bought my car new, so all I can say is this **** happens all the time. One can also have excellent dealership experiences with staff who are career professionals in sales or service.