There are two primary purposes for using an escrow company. The first is to assure that the seller actually owns what is being sold and that the buyer becomes the legal owner after the transaction. The second is to assure that the seller gets paid in negotiable funds as per the agreement. In most cases when buying a used antique, vintage or classic car this is not a problem because in most cases the vehicle is sold "as is" with no guarantee and the seller insists on cash. However if it is a valuable vehicle it is always wise to use an escrow company to assure there are no surprises.
There are many general escrow companies in the country and some that provide real estate escrow services might also handle vehicles. For handling the basic escrow service of assuring title and funds those companies would be fine. However, if you need assistance with other related tasks such as inspecting, insuring and shipping you might have better luck with a company that specializes in antique, vintage and/or classic vehicles. They may not be able or willing to get involved in those extra services but they will probably be knowledgable about them and be able to give you advice or recommendations. To find an escrow company you can search the Internet using the key words "vehicle escrow" and include your zip code, city or state to limit it to local companies.
1. Here is how it works -
- - The buyer and seller agree on the price, the terms for payment, the method of delivery and any other issues of importance.
- - Both parties agree on an escrow company and who will pay the fee, then contract for their services.
- - The buyer pays the escrow company the selling price of the vehicle.
- - The escrow company runs a title search to verify ownership.
- - The escrow company may also oversee the vehicle inspection.
- - The escrow company processes the payment and deposits it in an escrow account.
- - The escrow company authorizes the seller to give or ship the vehicle to the buyer.
- - The buyer then has a prearranged number of days to inspect and accept or reject the vehicle.
- - Once the vehicle is accepted by the buyer the escrow company pays the seller.
2. If problems occur -
- - If the buyer rejects the vehicle for any reason it is his responsibility to return it in the original condition, at his expense.
- - The buyer is responsible for damage to the vehicle while in his possession.
- - If the vehicle is damaged during shipment the buyer and seller are responsible for collecting from the shipper.
- - The buyer will be refunded the amount paid, less any agreed upon fees and/or damages once the seller accepts the vehicle back.
- - Disputes that are not covered in the escrow agreement are generally settled by arbitration, per the terms of the agreement.
Appraising, escrow and insurance are all part of vehicle financing and you will find more information about those services in our Reference Library. The library also has guides for finding, buying and selling antique, vintage and classic vehicles. And you will find even more resources for professional escrow services in our Business Directory.