Roaring Forties - Robert Logan

Re: Oliver

Gentlemen

We'd like to think the remaining kit makers will now offer
some form of "buyer protection"..., but don't hold your breath. If you do receive such a commitment, please share
it on the Forum.
Thx

MikeD
 

Doug S.

The protoplasm may be 72, but the spirit is 32!
Lifetime Supporter
Re: Oliver

The law of supply and demand also applies here. Right now the "commodity" seems to be consumer trust. There is a low supply of that right now. Any manufacturer who steps up to the bar and offers some sort of true, bomb-proof assurance that a significant deposit will not be lost will have a product that is suddenly in greater demand, IMHO.

Other than that, perhaps variable deposits would be an answer. For manufacturers who do not offer any form of refund assurance, the answer would be to proceed with a lower level deposit. For those who do offer some form of reliable refund assurance, we consumers might reasonably ecpected to and willing to post a larger deposit. The manufacturer could protect themselves against late build refund requests by specifying "variable" levels of deposit refunds, depending on the percentage of the build that is completed at the time the purchaser backs out.

Like Peter, I, too, would be interested in hearing from those of you who have ordered kits from various manufacturers, particularly GT40 manufacturers, but others also--sounds like a new thread, though. I'd like to read honest reports regarding delivery schedules, back-ordered parts, etc. These things do make a big difference to me when it comes to putting down the big buck$!


YD,E.PNB
 

Fran Hall RCR

GT40s Sponsor
DEPOSIT INSURANCE?????

I have been looking into one solution to your guys fears this week.
I will be able to take credit card deposits as long as the customer is prepared to pay any fees associated with each transaction...normally between 2-3% of the transaction total.
This way the customer will be protected by their CC companies insurance/refund policy....

Does this sound like something that would be acceptable??
 

John B

Temp Selling Pass
Re: DEPOSIT INSURANCE?????

Sounds Great Fran. I will give you my decease brothers...Will that work?
Oliver
 

Ron Earp

Admin
Re: DEPOSIT INSURANCE?????

Well, as one affected by the loss of a great deal of money I definitely have an opinion of how this could or should work. But, one must realize that the GT40 replica manufacturers are extremely low volume. We're not dealing with Factory Five cars here that are produced in large numbers, or even the likes of some of the smaller production Cobra outfits like Unique, ERA, etc. The GT40 production is, and always will be smaller - expense, time to produce, appeal - all of these things sort of ensure that it'll be a small volume business.

As such, a small volume business must have cash flow to keep parts on hand, pay for labor, and pay the rent. If people insist on escrow accounts then the money is going to be tied up while the car is being built and is unavailable for use. Sure, the manufacturer could get loans at that point, but, it'll add cost to the kits. And, since the cars are small volume production with good demand, there will probably be another customer who does not require escrow thus the manufacturer will simply sell to that customer.

The margins are just not such that deposits or down payments can be locked up. While markup on consumer goods is 100:1 sometimes (saw some interesting data on Crossfire about Wal Mart items that they were making a killing on), I imagine a GT40 manufactuer is doing well to get 3:1 or 2:1 markup out of the cars. With that ratio you'd clearly need to sell a huge number before you'd have a lot of cash piled around to not worry about deposits being available for use.

So, what to do? Fran's credit card suggestion is a good one for folks concerned about that, but it'll ad some expense since the credit card company will most certainly charge at least what Fran is quoting. But, the insurance might be worth it if the credit card company covers you in case of loss, fraud, mismanagement, liquidation, bankruptcy, and all the other related words I've recently become accustomed to contemplating.

I don't think we'll see any wholesale change of how replica manufacturers do business as it would cripple the industry. I'm sure it will, however, change the way US folks will be willing to do business with overseas manufacturers, and that might not be a good thing. But, home country players always have an advantage in their own court and it appears there will be plenty of home player options available for all no matter where they live in the world.

Oliver, must you post on every topic just to be posting?
 

Howard Jones

Supporter
Re: DEPOSIT INSURANCE?????

Oliver, At times you ARE funny. BUT your continuing childish remarks are beginning to wear on me. I have found that I am usually the last person to get fed up with someone, which means just about everyone else is fully pissed off.

Would you mind limiting your coments to something useful. We are now all aware that you smelled something burning a little before the rest of us. Don't you think that if you had just a little respect, that your early warning might have saved someone some money?

PLEASE drop the childish, I told you so, bullshit. If you can't, then bug off. I vote, if it's worth anything, to give oliver a couple of days to reflect on himself and if he can't or won't grow up... boot him.

I'm not going to respond so don't bother. Oliver.
 

John B

Temp Selling Pass
Re: DEPOSIT INSURANCE?????

I RESENT WHAT YOU STATED.

I never stated I TOLD YOU SO or insinuated anything of the kind... EVER.
And How dare you say that if I had respect that I would have saved people money.
I may not be the most diplomatic forum member. I'm sorry for that.But don't blame me that i did not "TippieToe" to to your liking around what was going on. And resorted with people losing money.


Your right..! I need to take a couple of days off the forum..I boot my self from ignorant headupthera$$ people like you.

Oliver
 
Re: DEPOSIT INSURANCE?????

Hi all future car buyers,

For many years now the kit and specialised vehicle industries world wide have a history of being under capitalised and relying on customer deposits basically as working capital. The end result has so often been monies lost, bankruptcy, shattered dreams, court cases and criminal action.

The formula is quite simple. Don't go into any business unless it's properly funded from the start.

In just about every case cars are built to individaul orders and therefore I believe deposits should be paid, to indiacte a serious commitment, but either into a trust account or an interest bearing savings accounts. In no way must thses funds be touched.

In a hypothetical case where someone has placed and order for a purple GT40 with a pink stripe and fur on the dashboard (clearly a very special order!) and for some reason cannot pay the balance it would be fair for a portion of the deposit to be used to respray the car in normal colour and to refund the balance.

Also when placing orders and before parting with large deposists it's not difficult to make enquires about the status of the car company.

Caveat Emptor,
Andre 40
 

Pat Buckley

GT40s Supporter
Re: DEPOSIT INSURANCE?????

Thank you.


[ QUOTE ]
Oliver, At times you ARE funny. BUT your continuing childish remarks are beginning to wear on me. I have found that I am usually the last person to get fed up with someone, which means just about everyone else is fully pissed off.

Would you mind limiting your coments to something useful. We are now all aware that you smelled something burning a little before the rest of us. Don't you think that if you had just a little respect, that your early warning might have saved someone some money?

PLEASE drop the childish, I told you so, bullshit. If you can't, then bug off. I vote, if it's worth anything, to give oliver a couple of days to reflect on himself and if he can't or won't grow up... boot him.

I'm not going to respond so don't bother. Oliver.

[/ QUOTE ]
 

Pete McCluskey.

Lifetime Supporter
Re: DEPOSIT INSURANCE?????

Please correct me if I am wrong, but didn't Robert offer a 25% discount off the kit price if people paid a substantial
deposit up front? I heard that it was as much as 50%. Now this is heresay, but if true, it should have rung alarm bells.
 

Ron Earp

Admin
Re: DEPOSIT INSURANCE?????

[ QUOTE ]


In just about every case cars are built to individaul orders and therefore I believe deposits should be paid, to indiacte a serious commitment, but either into a trust account or an interest bearing savings accounts. In no way must thses funds be touched.

In a hypothetical case where someone has placed and order for a purple GT40 with a pink stripe and fur on the dashboard (clearly a very special order!) and for some reason cannot pay the balance it would be fair for a portion of the deposit to be used to respray the car in normal colour and to refund the balance.

Caveat Emptor,
Andre 40

[/ QUOTE ]

While good in an ideal world, I think this will be difficult to accomplish in reality. No GT40 manufactuer works that way now that I know of. And, the majority of GT40s built are not special order cars that cannot be sold to only one person. Heck, if paint code inquiries and emperical data mean anything companies could, unfortunately, built a certain blue and orange car and satisfy 50% of the market straight away. Kits are also a big part of the market, for all but CAV and Superformance, and those don't have customer choices that would make them unsellable to others.

I'm not saying the customer interface model is right or wrong, but I don't see it changing in the short term since it is fairly standard practice.

I'll bear in mind the old latin "Caveat emptor" while shopping, but I'll seriously give weight to the Southern saying of "I know where you live" when considering future dealings since the latter personally gives me piece of mind.
 

Howard Jones

Supporter
Re: DEPOSIT INSURANCE?????

Here's how I did a similar deal about ten years ago. I built a pool in my backyard. Kinda like a GT40 in that nobody really needs a pool and they are something that are usually paid for with disposable money.

Total cost was $30,000. I put a $2000 deposit down that was applied to the 1st payment. The job was broken down into 4 sections. 1st was the drawings, permits, site prep, planning, and digging the hole. When this was complete I paid the balance of the first payment of $5000. Then 2nd was the pluming, and re bar, forms (for deck) and concrete prep. Another $5,000. 3rd was concrete, pebbletec, brickwork, another $10,000. At this point I have a basic pool, concrete lined hole, with no accessories or other landscaping. The builder has enough money to pay for all his material costs and labor expenses to date. We have a inspection and I sign off on the job to this point. Then he completed the rest of the job as follows. I paid for the heater, pump, solar, and associated equipment upon delivery and installation. About another $5K. The last $5K was paid when the lawn and other landscaping went in and the job was done.

The basis idea was I paid for what was done and at the same time the builder was protected from being too far into the red on the project. We both could have walked away from the deal at just about any time and come off fairly even. On his part he would have made a little money, far less than if completing the project, and in mine I was in a position to complete the job with another contractor without losing too much money.

The glaring difference is the pool was in my backyard. A GT40 is being built at least hundreds of miles away from home. But a deal structured along similar lines could work. At least the buyer could put hands on the car at several points along the build. The chassis could be serialized and the contract could be structured to indicate that at each milepost payment the incomplete build becomes the property of the buyer. The contract could indicate the components that are included at each milepost.

This isn't the all inclusive no risk solution but at least it's a idea to think about. Neither party would be out very much money if they pulled out of the deal at one of the mileposts. The initial deposit would be enough to pay for the materials and labor to start the project. The in progress build would be delivered to the buyer/owner upon payment of the appropriate milepost.

So clearly this is a outline that needs some filling out but it is an idea that protects both parties to some extent. Things such as late penalties, cancellation fees, etc. could be included. I also think it works best with one country deals. Buyer and seller in the same country, and in the same legal system.

RCR's idea of using a credit card, with I assume the appropriate credit and ID check is a good start. Maybe a sign off for payment at each stage of the build would work for both parties. Proof for both parties of completion of mileposts AND ownership at each stage.

Want do you think?
 

Malcolm

Supporter
Re: DEPOSIT INSURANCE?????

I use similar methods in large construction projects but I have a specialised agent who carries out valuations at each stage payment and certifies the release of funds from me to the contractor. The contract is quite hefty but covers all angles from and including death to insolvency. I would not be convinced if manufacturers of replcias would be keen to use something as chunky as this although it may give some ideas to an innovative manufacturer.
 

Doug S.

The protoplasm may be 72, but the spirit is 32!
Lifetime Supporter
Re: DEPOSIT INSURANCE?????

Hear, Hear, Howard and Malcolm!!--I used the same procedure described by Howard when I was engaged in general contracting. There are "milestones" in any job and those can be specified in the contract. The idea of "staged" refunds that I mentioned in a previous post is certainly bested by the suggestion of "staged" payments--that sounds even better than a single down payment with variable refunds at the milestones.

As a former business owner, I feel it is important for our GT-40 community to realize that they, too, have a vested interest in assuring that the business owners who manufacture our dream product can make a reasonable profit and stay in business, and not just for the purpose of assuring that we don't lose large deposits. I, for one, would not be able to R&D my own kit, and while I understand the desire to protect our investment in our dreams, I realize I cannot achieve this dream without the services of those who are in a field fraught with risk, too. As I mentioned before, considering the global impact this unfortunate incident has had on our admittedly small community, those manufacturers who display a desire to work out a method to scratch this "itch" we now have will probably suddenly be much busier. I applaud Fran/RCR for being to the first to express that desire on this forum and invite other manufacturers who have been reading these posts to join in the discussion, too.

YD,E/PNB
 

Pete McCluskey.

Lifetime Supporter
Re: DEPOSIT INSURANCE?????

Howard, Malcolm, Doug. That is exactly the way GT40 Australia (DRB) charged for my turn key. A firm quote up front,a small initial deposit and progress payments throughout the build.
 
Re: DEPOSIT INSURANCE?????

Pete, that sounds exactly like what Roaring Forties was doing, so there is still not much protection. If they file bankruptcy a day before your car is done you have paid for most of it and will receive nothing, or worse yet they ask for deposits before they have met the milestones. If you are not in the same country there is not much you can do in the way of verification.
 

John B

Temp Selling Pass
Re: DEPOSIT INSURANCE?????

It's about time someone realized the coralation between the stupid pool senerio was the same as Rf.
Execpt that the pool is partly complete and if the company bails you still have a pool that can be completed by sombody else. With the Gt40..The car is cross seas...whatchgonnado...Nadda. So nice going Johnathan you thought it out. But who am I...Well let's see... Yep! Just a guy with a 8th grade level of grammer. The pool senerio hangs out with "clown" so what doya expect..

Oliver /ubbthreads/images/graemlins/lurk.gif
 

Pete McCluskey.

Lifetime Supporter
Re: DEPOSIT INSURANCE?????

Jonathon, nothing you can do when a company goes belly up whether you live locally or not. You become an unsecured creditor and line up with everyone else, for a couple of cents in the dollar. /ubbthreads/images/graemlins/banghead.gif


Oliver you are right about the pool scenario, possession is nine tenths.

How many years did you spend in eighth grade? /ubbthreads/images/graemlins/1poke.gif
 

Ron Earp

Admin
Re: DEPOSIT INSURANCE?????

You can't do much with a company that goes belly up. But, the "I know where you live" helps quite a bit with customer satisfaction post belly up phase and only works well when the company and customer are both in the same country.
 
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