As values have soared, so has the potential for an expensive mistake, that’s why good legal advice can be worth far more than it costs. So why would you need a lawyer when buying an old car?

If you were buying a £5 million house through an estate agent, you would never simply hand the agent a cheque and drive away with the keys. Your solicitor would establish who owned the property, check for mortgages and other interests, and make sure the legal transfer was properly completed. Buying a valuable historic car is no different in principle – although, unfortunately, the paperwork is rarely as clear.

The first thing to understand is that a V5C is not proof of ownership. It records the registered keeper and details of the vehicle; it does not establish legal title. That distinction becomes increasingly important as classic and collector cars reach values that would once have seemed extraordinary.

So when buying a £1 million Ferrari, the question is not simply whether the seller has the car and its V5C. It is rather does this person actually have the right to sell it, and will I acquire good title when I pay? That sounds obvious, but the answer is not always straightforward. The dealer may have the car on consignment, it may belong to a company rather than the individual selling it, there could be finance or another third-party interest, the person named on the V5C may simply be the registered keeper. In the worst cases, the person selling the car may have no authority to sell it at all. Finding that out after you have transferred £1 million is considerably less enjoyable than finding it out beforehand.

The car may not be what you think it is

With a modern used car, most buyers are concerned about mechanical condition and mileage. With a historic car, the biggest question may be identity. Is it really the car it claims to be? Is the chassis original? Are the engine and gearbox genuine? Has the car been rebuilt around another chassis? Are the competition records correct? Is the famous previous owner actually documented? These questions can make the difference between a valuable historic car and a very expensive collection of components.

A seller might tell you that an engine was rebuilt 2,000 miles ago, that the car has matching numbers, or that it was once owned by a famous person. Such statements are easy to make over the telephone or in an email. They become much more interesting when the seller is asked to put them into the contract. If a claim is important enough to influence the price, it is worth asking whether the seller is prepared to stand behind it in writing.

That does not mean every statement needs to become a contractual warranty. But where provenance or originality represents a substantial part of the car’s value, the distinction between a sales story and a contractual promise can be enormous. And if the seller suddenly becomes reluctant to put an important claim in writing, that tells you something too.

The modern fraud problem

The risks have changed since we first wrote about this subject was first written about in 2018. Today, a £500,000 car can be advertised, negotiated and sold without the buyer and seller ever meeting. Cars are marketed through websites, social media and messaging services, while deposits and purchase prices can move around the world at the press of a button. Which is all very convenient — but it also creates opportunities for fraud. Bank details can be changed by a compromised email account. Genuine photographs can be used to advertise a car by somebody who does not own it. Documents can be copied, altered or taken out of context. The more valuable the car, the more important it is to verify the people as well as the car.

A reputable dealer or auction house should not be offended by sensible questions about ownership, authority, provenance and payment. Indeed, a reluctance to answer them should be a warning sign.

Buying from a dealer

There is another important distinction: buying from a professional trader is not the same as buying privately. Consumers buying from traders have statutory rights under the Consumer Rights Act 2015, including protections concerning the seller’s right to sell the goods and undisclosed charges or encumbrances.

That is valuable protection, but it should not be regarded as a substitute for due diligence. The best time to discover that a car has a problem is before you buy it — not after you have paid for it and started looking for a solicitor.

Auction purchases also deserve care. Auction conditions vary, and the auctioneer may be acting as agent rather than owner. Descriptions, warranties, exclusions of liability and remedies can all be different. Before bidding serious money, always read the conditions.

And what about the seller?

Lawyers are not only useful to buyers.

For a seller, the priorities are rather different: establish that you have the right to sell the car, make sure the contract says what you actually intend to sell, avoid making claims that cannot be substantiated, and make sure the money and the car change hands in the right order.

If confidentiality matters, say so. If the car is being sold through an agent, establish exactly what authority the agent has and where the proceeds will go. And never underestimate the importance of a properly drafted restoration agreement. “£60,000 for a complete restoration” sounds wonderfully simple until the restoration is half finished and the bills have reached £110,000. What exactly was included in that £60,000? That is a much better question to answer before work starts.

The cost of getting it wrong

Nobody likes paying lawyers. But the cost of legal advice should be considered against the value at risk. A £20,000 classic car may not justify an elaborate legal investigation. A £2 million historic racing car with complicated provenance, several intermediaries and an overseas owner is another matter entirely.

Legal fees are normally determined by the complexity and amount of work involved, rather than simply by the value of the car. The right approach is to agree the scope of the work and, where possible, the charging basis at the beginning. The important thing is not to spend money unnecessarily. It is to spend enough to avoid the sort of mistake that keeps you awake at night.

The golden rule

The fundamental principle has not changed.

Do not confuse possession with ownership.

A V5C does not prove title. A dealer’s reputation does not prove authority. A famous auction house does not automatically guarantee provenance. And a compelling story about a car is not the same thing as documented history.

When the car is worth serious money, a lawyer’s job is not simply to produce paperwork and get the deal completed, it is to ask the awkward questions before you hand over the money. Because the dream is to drive away in the historic car you thought you were buying, the nightmare is to discover afterwards that somebody else owns it.