Parents' Vehicle

glosandy

My father has turned 90 years old recently, and is considering stopping driving soon. He has loved and cherished his vehicle since he bought it new when he retired. The vehicle is well over 25 years old now, and is in fantastic condition. I have always had a love of cars (currently own more than a few), so have always taken an interest in its upkeep, helping with maintenance, repairs and cleaning etc.

Both my parents have stated they would like me to have the vehicle at some point. This is now common knowledge amongst my siblings. Dad has taken great comfort in knowing that the vehicle will be looked after - and not sold. Whilst I don't see any financial benefit in this (I will keep the vehicle in his memory, for however long I can), I have suspicions that this won't be seen in the same way from other parties. This wasn't really a problem when the vehicle was worth £2,000. That is no longer the case, although the range of current values would be quite wide.

At the moment, all ownership matters have only been discussed verbally. My parents are looking to add a codicil to their will, to set out their wishes on significant items like this.

Now he is looking to stop driving, it raises a couple of points regarding running costs. The vehicle still needs exercising, so MOT, Tax and Insurance need to be considered. One potential route around this is to transfer the car into my name. They are happy to do this, as in their minds it bypasses the codicil requirement for this item.

My questions are two-fold:
– Would transferring the vehicle into my name at this point of their lives have any implications regarding future calculations of their estate?
– Would it be better to buy the car from them, for a nominal sum?

I am looking to do something fair and above-board and that satisfies my parent's wishes. But in the back of my mind, I do have concerns that one of my siblings will be suspicious about this, for a couple of reasons - the loss of value from the estate being the main one.

Any thoughts or comments would be appreciated.

BooJewels

My gut reaction, having just cleared and sold my parents' house and their significant possessions, is that 'estate things' just aren't worth as much as you think.   There's quite a wide margin between what you think something should be worth - antique furniture and collectibles and the like - and what you can actually sell it for.  A 25 year old car - unless something really special or rare - probably isn't worth much, despite being in pristine condition with a great provenance.

I can fully comprehend how a sibling might cause trouble over it, having a BIL who would be very much like that - but I suspect he would end up disappointed.

Perhaps the fairest solution - if you can afford it - is that you buy the car from your parents (there are enough trade lists, to get to a fair price) and they then divide the money between the other two siblings - that way each of you gets something from it.  If it sits in a garage not being routinely used, it will also quickly deteriorate and devalue further.  Keeping it 'in the estate' won't improve its value over time, quite the opposite. 

We ended up in a situation where we were glad if someone would take something off our hands and just get it away, rather than the money we might have got for it if we had gob-loads of time and energy to try and find a suitable buyer.  Each item you give away is one less item you have to pay someone else to clear or remove for you - so that becomes its value.

elsien

If your dad wants to gift you something now, it has no bearing on his estate after he passes. Although something to explain what he’s doing and why can be helpful if there might be queries further down the line. 

getmore4less

If he gifts it becomes a PET.

If it has significant value that could be an issue. 

Purchase should be arms length real current value.

glosandy

As much as it pains me to say it, I think the time limits involved in a PET would preclude this. I hope I am wrong.

So, here's the thing - I've just been on Phil Schofield's favourite car buying site, and their valuation is £350. I know they don't have any specialist knowledge, but would that be acceptable as a valuation for the vehicle, does anyone think? I know the adage "something is only worth what someone is prepared to pay", but how does this work in such a specialised area, I wonder? If this was ever challenged as a way to circumvent IHT, who gets to decide the vehicle's value?

Slightly going off track here, sorry...

Keep_pedalling

getmore4less said:

If he gifts it becomes a PET.

If it has significant value that could be an issue. 

Purchase should be arms length real current value.

Sounds like the value is well below the annual exemption so probably not even a PET.

RAS

What price does Parker's put on it?

Savvy_Sue

I'd also get a trade-in value for it, if you can. I've sometimes been surprised what a dealer will offer if I am buying a car from them. 

But then I think I'd buy it, making sure it can be demonstrated to be a fair price for the awkward squad. Or that your father is prepared to share and defend what is ultimately HIS decision. 

glosandy

Parker's don't have a price on these, unfortunately.

Autotrader range is £1,975 to £16,995.
Car and Classic range is £1,800 to £18,990.

GDB2222

The only issue is between you and your siblings. Buying the car at a nominal cost doesn’t help that. You need to agree a figure that they are happy with. 

Given a range up to £17k, and given that this is in great nick, I guess a valuation at say £15k might be reasonable? Then just agree that the £15k, or whatever figure you and your sibs agree, is regarded as an advance on your inheritance. 

silvercar

I'd consider carefully before agreeing to this. My neighbour agreed to take on his father's immaculate car. It was an exceptionally low mileage 5 year old merc in perfect condition, polished lovingly every week. While the father was alive it would be taken for an occasional spin, often with the father as passenger. The father died in 2015, the car was still driven occasionally, but gradually less and less. After a couple more years the fathers' cherished number plate was transferred to the neighbours own car. At some point around 2018 the car was SORN and sits on the drive; the neighbour still unwilling to sell it. It now has tyres flat from lack of use and is lightly covered in dust, broken up by the random splattering of bird poo. Having kept it so long, he still can't bear to sell it.
I'm hoping the deciding factor will be that his eldest child will be 17 soon and want a car to learn to drive, the 2 family cars being unsuitable. Hopefully they will buy a little run around and need space on the driveway.