HI, VPI Classic 4 is it a great upgrade from 1

Your dealer is misinformed, call VPI directly for clarification as the Classic 3 with a 12.7 is not a "standard" offering. My local dealer has ordered this combo for a couple of their customers.

I agree that a Classic 4 with only 1 arm would be a better option for the 12.7 arm as the Classic 4's larger foot print will balance the look of the longer arm.

My recommendation is get the Classic 3, save the extra money and get a good linear tonearm.
With this combo your table will become really terrific.

I have this on my system and sincerely it is very outstanding.
If you are close to my area you can come in and listen to it for yourself.

That is a great suggestion: Classic 3 plus a linear tonearm like the Bergmann Magne.