Thread: Down payment 50%?

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Ok i am placing a order for my 3 window.
They cant start to buld the frame or body till mid dec.
They want 50% up front.
Is that about right?
I told them i wanted a contract in writing signed by them and me.
What more should i do?

dont wnat to get ripped off
They have a good name but we all know how fast signs go up like (Going ou of busness)
HELP!!!!
sorry about any bad spelling here guys
wish they had spell check
Dave

"They"

They who??

I second Tech's "they who" question

It is common for custom projects to be done on a progress payment schedule. If "they" didnt do so, you could go in and have them start a 29 Essex roadster and then bail on the project. The builder would be left hanging.

IF the delivery is a short one (one or two months), then 50% up front is typical......IF delivery is longer, then 50% is kinda steep.

On the other hand, the progress payments should kinda follow the $$ added to the car.... ie, if they are going to be 25% done in October, it is not unreasonable to pay 25% of the bill. The builder has to pay his help and bills long before your car is done so this is fair.

At the far end of the project, some holdback is nice for the buyer since he can withhold the payment until things are right.... IF you pay 100% before you get the car, there is little incentive for the builder to finish the car if he has other cars that have payments based on progress.

Normally, we divide a custom project into four or five milestones such as 30% with order, 20% at start of assembly, 30% upon power up and 20% at delivery. The milestones need to be concrete and easily defined.....

Remember that the shop wants/needs his money as early as possible and you want to pay as late as possible. Find a happy medium where neither of you get screwed. Dont pay too far ahead....what happens if he needs your money to finish the car before yours?

I know a builder who has 150K in an unfinished car and his customer has paid in only 100K......leaving the builder out 50K. The customer has lost interest and shows little interest in finishing. What does the builder do? Not too much of a market for a custom vehicle that suits the other guy's tastes.

mike in tucson

One additional thought, IF "they" want 50% now for something "they" are going to start in mid December, something doesnt jive here.

I suggest that you check out "they" with others who have dealt with them.

If the demand is so great, "they' might command this kind of deposit. For instance, Brookville 3 windows are probably in demand....Brookville asks for a $5000 deposit on their 3 window body..... and they are probably the cream of the crop.

Some of this depends on what you are getting from them. A basic stage III body/chassis or what? They may be very buisy and trying to schedule etc ( if they have/practice a good buisness model) and need for you to commit and hopefully to them keep your mind off desertion. This helps them deliver consitently to all their customers.

If they deliver things on schedule, which I am very scheptical of in general, and they are doing a more complete build especially, they have to invest time and money up front to have parts (long lead items) ready to go to deliver your job on schedule. Naturally that costs $. The bigger/more established the outfit is the less this is critical to them.

Bottom line from me is that for a stage III body/chassis turnkey and above I would expect to pay up to 50% up front.

I see many outfits with various, attractive pay as you go programs. However no large amount of time you spend on investigation of them will be too much.

Good Luck, Kitz

From a pure business point of view this scenario would give me the willies. A '32 3 window is going to be a quality body builders second or third most popular style. That means he shouldn't be too worried about you backing out because he'll have another customer come along in short order, especially if he's "so busy" that he can't start til December.

Without knowing who we're talking about it's hard to pass judgement, but requiring 50% up front tells me this is someone who's underfunded, unless he's just a hardnose guy. That means he's living on cash flow. In other words, your deposit could very well be spent for day to day operating costs (payroll, tax revenue, lights, water, rent, business taxes, etc, etc) before they even start working on your body. You could get lucky if enough people are in line behind you to keep his game going, but if you're unlucky enough to be one of the last couple in line for a while, he could be closing his doors very soon. And no contract you want will squeeze blood from a turnip. And think about this. There's a lot of panic out there right now about gasoline pricing. That means that all these type of suppliers have a very high likelihood of seeing a significant slow down in revenue. If this guy is on that cash flow game edge, your deposit is history.

Preferring to be an optimist overall, there could be some good bargains out there in a few months if the panic continues. It might be worth it to find one of this guy's dealers (if you're dead set on his body only) and see if any of them have one in stock. You might have some pretty good leverage, as these guys are reading the tea leaves too, even if they don't want to tip their hand. Or, if you like gambling, offer to put the money in escrow at a mutually agreeable institution. Run it like a custom house and authorize releases as he PROVES he's making progress. e.g. release for raw material purchase, release for 20% complete, etc. Personally, nobody's body (well, maybe Brookvilles) would be worth that much hassle to me, and a flakey won't do it for obvious reasons, while a successful operation won't want to mess with you.

The builder is RAVON
Does that help?
Now that is what i see the email says (50%) at time of ording
It's from Barb & Randy
I think is just something we will work out