Selling a 5K car on a raffle?

mjm3346

JayD2020 said:

Wouldn't this be similar to how you can win a sorts car at the airport? Here's an article I could find... 

(I can't post links yet but Google "thisismoney airport car giveaway" and you find an article called "do people win supercar giveaways")

From the article:
"As gambling laws dictate, any competition entered where a winner is drawn purely out of chance is illegal, so the process has to have an element of skill - in this case, placing a marker where you think a football was in a photograph before it was cleverly edited out."

Their statement is not correct - their issue is running a competition for profit but providing a free entry entry route allows the winner to be drawn "purely out of chance" as per ITV/C5 and many other competitions.
Also if they were being run for charity instead of profit and complied with the rules relating to that then a chance draw (lotto, peoples postcode lottery etc) is fine

JayD2020

Reading in to it a little more now, it can be quite complicated. Everything is taken in to account... The amount taken, whether charity of commercial, does the draw take place during an event, etc. 
Some of the previous posters in this thread are right though. Why wouldn't you just sell it through the usual routes? Wouldn't that be much quicker anyway? Or are you looking to potentially make more than the car is actually worth?

Deru

Interesting, as I read a newspaper article about a couple that raffled a house.    It could potentially make more than the £5K but it might not so it's a risk.  That would most likely be the reason but it's a gamble.  It's the same for a lot of raffles really, to raise money.  While there are laws about gambling and classing such competitions as a type of gambling and it needs to be legislated etc etc, if you did it in a Facebook group that you're a regular in, with the admin's approval, I doubt you'd get in trouble if it's a one time thing and it's legitimate.  However, if you start advertising it in multiple groups or a public group, and other places and are perceived as spamming, then that could give you trouble if a busy-body decides to report you for it. 
  
As for the person asking why anyone would spend £1 at a chance of winning a car worth £5K that they don't really want, with the hassle of selling it.....I find this question weird.
Answer:  for the chance to win a car for £1 they could use or the potential of £4-5K profit, obviously.  Just because you don't fancy the hassle of flogging a car for a massive profit doesn't mean others won't. Plenty of people would be happy to do so even if it's a bit of a hassle.  What a weird question to have to ask...   

lincroft1710

Deru said:

As for the person asking why anyone would spend £1 at a chance of winning a car worth £5K that they don't really want, with the hassle of selling it.....I find this question weird.
Answer:  for the chance to win a car for £1 they could use or the potential of £4-5K profit, obviously.  Just because you don't fancy the hassle of flogging a car for a massive profit doesn't mean others won't. Plenty of people would be happy to do so even if it's a bit of a hassle.  What a weird question to have to ask...   

Not a weird question at all!!

The OP is obviously having problems trying to sell this car otherwise he would have sold it using normal methods. People usually enter a raffle to win something they want to own not to win something they don't and then try to sell it on. You are also forgetting that whilst in your ownership you will have to insure and tax the car, so more costs added to the cost of advertising.

But at a £1 a ticket, the OP only has to find 5,000 people who want to buy a car to sell it on.

Grumpy_chap

Is the car the OP wants to get rid of really a £5k car?
Rather than the OP having the hassle of running the raffle so someone can win the car they don't want and then sell the car on for a level below the £5k value, it would seem easier if the OP simply cut out the middle man and sold the car for the lower value.

Deru

I'd say the profit potential of winning outweighs the hassle for a lot of people.  Not for every one. For those who don't care for the car, they just won't buy a ticket.  The main thing is how many people who do want the chance end up buying a ticket. 

You don't have to insure the car if you have a Fully Comp Insurance policy that also covers use of other vehicles (not all policies include this benefit, but mine does). Road Tax cost isn't much anyway depending on the type of car. (approx £150 maybe but you could declare it SORN (off the road and not have to pay). If you did buy road tax for it, DVLA refund you for the period that you haven't used.
It's a gamble on both sides.  Most people will have spent £1 for nothing (more if they buy more than one ticket). OP might or might not be better off than selling via the usual means. On the other hand, if marketed right, he might get £10,000 of ticket sales then it's a winner.    

lincroft1710

Deru said:

I'd say the profit potential of winning outweighs the hassle for a lot of people.  Not for every one. For those who don't care for the car, they just won't buy a ticket.  The main thing is how many people who do want the chance end up buying a ticket. 

You don't have to insure the car if you have a Fully Comp Insurance policy that also covers use of other vehicles (not all policies include this benefit, but mine does). Road Tax cost isn't much anyway depending on the type of car. (approx £150 maybe but you could declare it SORN (off the road and not have to pay). If you did buy road tax for it, DVLA refund you for the period that you haven't used.
It's a gamble on both sides.  Most people will have spent £1 for nothing (more if they buy more than one ticket). OP might or might not be better off than selling via the usual means. On the other hand, if marketed right, he might get £10,000 of ticket sales then it's a winner.    

I think you're still missing the point of why would the OP raffle the car in the first place. If he can't sell it by normal methods then it could be a lemon or an undesirable make/model. So whoever wins it will have those same problems trying to sell it on as the OP had in trying to sell it originally

Grumpy_chap

I suspect that this £5k car is not really worth £5k.
If I buy a raffle ticket and win the £5k car but cannot sell it to realise £5k, who pays me the difference in prize value?  If there is not a £5k prize, then I have been mis-sold and the whole thing was a fraud.

vacheron

briniuk said:

Well ive seen a lot of variances, some people sell a £1k watch and £5 per ticket or some sell sports cars, id find a suitable amount of money to charge within a certain time ie a few months, if i've not got to the amount then ill just hand over a cash prize.

If a £1k watch commands £5 per ticket, let's say a £5,000 car is £25 per ticket.

If you win a watch you can just hang on to it at no cost or sell it easily. A car is a huge depreciating liability that needs petrol, servicing, insurance, tax, a registered keeper and a place to store it.

So lets assume 1 out of every 10 facebook friends is inclined to want to spend £25 for a "chance" to win a £5K car. You would need to sell 200 tickets and so would need to reach at least 2,000 random people before you reach the cars value. 

What happens if only 4 people buy tickets and you only make £100, you are still obliged to run the raffle and give the car to one of them. Also, selling someone a ticket for a £5K car and then instead offering a smaller cash prize because you've "not made enough money" is just a small claims case waiting to happen. 

Even assuming it is legal, is the difference between the amount you hope to make from this raffle, and the price "we buy any car" would just give you really worth all the administration and effort?

Grumpy_chap

Deru said:

You don't have to insure the car if you have a Fully Comp Insurance policy that also covers use of other vehicles (not all policies include this benefit, but mine does). 

When car insurance includes "driving other cars" cover that is usually only for cars that you do not own and are not otherwise insured to drive.  Plus, the vehicle itself has to have an insurance policy in it's own right.