Articles

Michael Sheehan's Ferraris-online.com Article

Due Diligence

As appeared in:

Sports Car Market—November 1999 issue

Sheehan Speaks

by Michael Sheehan

Mike Sheehan

After a quarter of a century in the exotic car business—having owned, sold, or brokered about 2,000 exotic cars (mostly Ferraris)—I have witnessed almost every variation of multiple factors that can “go wrong” in an exotic car sale.

The buying and selling of exotic cars should be a pleasant experience. The seller is ready to sell. The buyer is ready to buy. Both parties should complete the transaction as happy campers, yet such is not always the end result.

Empiricism has proven that the simplest way to financial and emotional security in the purchase of a car, whether you are the buyer or the seller, is to have the car inspected by an expert or a series of experts for mechanical integrity, body integrity, and previous history. If it is necessary to contact two or even three experts to achieve both financial and personal comfort in a transaction, so be it. The cost of experts is usually a small percentage of the purchase price of the car, and any faults found can be used as part of the negotiation process.

While mechanics may be experienced at evaluating the mechanical aspects of the car, they are usually not experts on crash damage. On the other hand, bodymen normally are not prepared to evaluate the mechanicals of the car, so hire both experts for a detailed written inspection. If the car is valuable, rare or historically significant, then also consult an historian with the ability to document the ownership history and various adventures that the car in question might have endured over the years.

Any honest seller (and most are honest) will be more than willing to have as many experts as the buyer wants inspect the car. Remember that he (or occasionally she) is usually emotionally involved in his/her car and has probably enjoyed the car as much as the buyer hopes to in the future. I also recommend that the seller get copies of all written inspections, for while most buyers are honest, I have seen more than one unscrupulous buyer file a “shakedown” lawsuit after the purchase over alleged problems, even after having their purchase inspected by experts of their choice. If there are questions about the car make sure that they are answered clearly in the written inspection.

America is an extremely litigious society. Law schools are in the business of mass producing lawyers. Defendant or plaintiff, right or wrong, most lawyers rarely care, as long as someone pays the bill. If you own a Ferrari, in the sights of a lawyer you must be rich, so, be you buyer or seller, protect yourself and do not become a target.

There is little that offers more satisfaction than a beautiful Ferrari sitting in your garage. There are few things less pleasant than going to the garage to see a car that you hate. While buying any exotic car is usually a very emotional decision, you can almost always find personal and financial comfort for the cost of a few hours time of a qualified mechanic, bodyman, and historian. It is money well spent.

MICHAEL SHEEHAN has been a Ferrari dealer for 30 years as well as a race car driver and exotic car broker.