Hi,

I was hoping someone could give me some advice on where i stand legally on this matter regarding getting my deposit back on a car my partner and i were interested in buying.

 Heres the full story,

We put a £300 deposit down on a car, and then tried to get the remaining £2700 on finance through the deal. We made the salesman write on the receipt that if the finance was rejected then we would get our deposit back. Before we started the process we asked the salesman roughly how much it would cost us monthly if the finance was taken over 3 years, but the monthly payment was about £93 so we said we wanted it over 4 years, as we wanted the monthly payment to be as close or under £70 as possible.

We then left as the finance was sorted out. The first lender came back and said they would only lend us £2400, so they kept trying until we found a lender that would lend us the money, the only problem is the interest rate is stupidly high and the monthly payment is about £95 over 4 years.

There is no way we can afford this amount and this isn't what we wanted. We wanted a finance package, where our monthly payment is as close to £70 as possible and this is what we told the salesman.

We can't afford this finance package, and its nowhere near the amount we were told it would be, so we want to walk away and try again some other time, but we want our £300 deposit back, but they are now saying the finance is there and we have to take it or lose the £300.

Can i get the money back? Where do i stand legally?

Any help will be much appreciated.

 Thanks

Phil

Unfortunately the finance wasnt rejected, therefore you have no legal claim on the deposit.

My advice would be to speak to the garage and see what they can do.  They might be nice enough to agree to return it. 

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Dave

P.S. I feel obliged to point out, I am speaking from experience and my own personal views above - I am not an advisor, nor an expert.

Phil,

 

Something similar happened to me but was £500.  I managed to get back £250 through goodwill and reasoned discussion.  But they kept £250 for use against a future purchase.  Which I did use as the deposit later on...which was a way of saving...but no interest!!

In truth the finance is there but not at the interest level you would like so they have a point.

Sorry no legal advice but you don't want to go down that route anyway or they will close ranks. Gently does it is the way to go

Good luck

 

saver

Hello,

I hope this will help you.

When you agree a purchase, if it is a cash transaction and the sale is made face to face then neither party, vendor of purchaser can legally back out without paying fair and reasonable compensation to the other party.

if the cash transaction is made over the telephone or on the internet then either party can withdraw under the rules of "distance selling".

If the agreement involes hire purchase then any of the three parties involved can withdraw at any time until the loan agreement is signed on consumer credit licenced premises (for regulated loans under £25000) without paying compensation.

the parties are as follows, vendor, puchaser and finance house.

 

stumac:

If the agreement involes hire purchase then any of the three parties involved can withdraw at any time until the loan agreement is signed on consumer credit licenced premises (for regulated loans under £25000) without paying compensation.

Any of the three parties can withdraw, as in, are not obliged to continue with the sale but does this mean the deposit is refundable? The notion of a deposit is to secure the order and surely, if you decide to withdraw rather than be rejected, then the deposit is non-refundable???

Saver's advice seems soundest to me..

JJ

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You gotta tie yourself to the mast my friend, and the storm will end.

Hi,

I arrange car loans and sell insurance for a living and have done for 12 years. What i have said is correct. once the transaction has been cancelled then deposit is refundable under the above circumstances. If this is not true then please help me get back all the money I have had to legally refund over the years !

dictionary description pf the word deposit =a sum of money which is given in advance as part of a total payment for something:

Stumac,

I knew about the cancellation bits but was unsure over the refund of deposit bit, wasn't for a minute suggesting you were wrong so thanks for clearing it up for me.

I've been selling cars for 8years but don't get involved with cancellations, usually don't take 'deposits' until delivery day when finance is passed, signed and paid out. Just been chatting to my area sales manager and he tells me the same as you.

Lets hope I don't have to get involved in too many cancellations anyway!!! LOL

JJ

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You gotta tie yourself to the mast my friend, and the storm will end.

Hi,

 I have a question about getting my car deposit back, i was pressured in to putting down a deposit on a car the other day because the salesman made out i had got a much better deal than i had actually got which pressured me in to putting a deposit down.  There was actually no price on the car that i had wanted, so the salesman had roughly estimated £3500, i said i was not happy with that, and after alot of haggling i managed to get it to the rock bottom of £3000, see I thought i got a good deal because the salesperson allowed it to drop that much...but in actual fact the car is a 2002 Ford KA Style with 54200 miles on it!  That is a bad deal, as they sell for around £2000 with less milage - i am a first time car buyer and was ripped off, do i have any legal rights to get my deposit back - especially as it didnt have a price on it and i recently looked in one of there magazines and a ford ka 02 was only £2995 - its no big deal that i paid £5 more but how do i know the milage wasnt less on that car!  I feel like i have been ripped off, there was no mention about the deposit being refundable or non refundable and the paper i signed has no small print stating otherwise...am i entitled to get my deposit back?

 

Kate

Hi kate.

Did you enter into an agreement to purchase the vehicle for cash or was it a financed deal?

by the way cap guide retail price on that vehicle is £2625. so around  £3000 wouldn't be a silly price if the vehicle is very clean.

Hi,

This is a useful piece of guidance Stumac - I'm in the following situation and it's all getting a bit messy. I laid down £1k deposit on a car via a credit card and we had agreed finance terms (deposit, finance then balloon payment). The interest rate was 5.7%, I was working on a APR basis. I wasn't given any detailed breakdown of the rates, etc and when I was looking at the numbers at home (from memory), I realised something wasn't right because the balloon payment at the end seemed much too high.

Next day I went in and asked to see the T&C's for finance, but was told the finance person was unavailable. So the following day I went in and I went through the numbers I had calculated to try and reconcile the figures - it was then that they told me the 5.7% was flat rate (no way, I definately asked the salesman what the APR was) and this explained the difference from my calculations to theirs. I told them I was very uncomfortable with this and wasn't sure whether I wanted to proceed - they gave me a form to sign regarding the deposit, but I wouldn't sign it. I also asked the salesman if deposit was refundable and he said it was, or was transferrable to another vehicle.

After another two days, we'd gone round the loop of the company trying to renegotiate finance (4.25% flat rate was offered FYI) etc, but I wasn't happy and wanted to pull out, I told them to make the car available for other buyers.

Anyway, a pushy sales manager then came on the phone, claiming deposit was non refundable, but I told him I believed it was given that we were in a finance discussion and I hadn't signed up to anything. He said he wasn't a lawyer so couldn't comment (I am sure that as a car sales manager he is very aware of the T&C's).

What do you think? At this time they are proving increasingly elusive to get hold of, i'm worried incase amount of time expired has an impact and there is some sort of delaying tactic (I've sent them an "official" cancellation of order e-mail also). 

 

hello i was in the same sort of situation i had put 500 down on a car from vw. but then found out that they were bringing out a new version later on in the year. i went back to them stating what i had found out but they refused to return my deposit.  i got on to there head office and put a complaint to them. but they came back to say there was nothing they could do.  so i sent them a letter saying that they had let me down that i was good customer of theres in the past and i would take them to a small claims court.  i gave them 2 weeks to reply and on the last day i received a cheque for my 500.00.  you could put in to the letter that you had stated you would not be able to afford that amount and salesman knew that.  good luck

hi,

In april 2007 i went to a car sales room to look at cars for my boyfriend, after being presured into leaving a deposit i left £100,  as this was my money and the car was for my boyfriend the sales man assured me that under any circumstances i would get my despoit back if my boyfriend decieded against it, fortuntly he was happy with my choice of car, the car was being bought up from another garage so we had to wait a couple of days before we could go see it, On the day we were supposed to be going to pay the rest of the money and look at the car i got a phone call of the man who was dealing with me saying he would not sell me the car as it was not fit enough to drive. he then said he would find me another one and get back to me, i was fine with that and a week later i got a phone call of him sayin he had found a red car with a irish number plate, as i new my boyfriend not want a red car i said i would ask my boyfriend and get back to him he said no so i contacted the garage the next day to tell them i did not want this car, the man who was dealing with me was unavilable so i left a message with the receptionist, after not hearing from them after about 3 weeks i bought another car from a friend. i contacted the garage and said i wanted my money refunded and they were fine with it, after not getting anything through the post or into my bankaccount after about a month i contacted them again and was told i would not be recieving my money back as it cost them to get the car ( the one that was not fit to sell me) up to them and sent back agian when i argued my case they said it was because i had not come to look at the car and give them the chance to sell me it,,, there was no car to sell me!? i spoke to the manager and he said it was there policy, what to steal from a 17year old!? not only was i promised my money back but there was no car for me to see, but they are sayin there was!? i am completely confused about this and they wont give me any more answers other than the ones above, am i entitled to my money back!?

Thanks

Leah-Jane

Yes, you certainly are!

Write to them explaining that you require your money returned yto you, with interest pursuant to the County courts Act 1984, on the following bases:-

1 - You were assured that the deposit was refundable under all circumastances, and a mere formality, and thus it should be repaid to you no matter what the circumstances of the collapse of the deal;

2 - You did not breach the contract for sale that had been created; they did when they failed to supply to you the car that was agreed in that contract for sale.  The contract related only to the first car; when they failed to supply it that contract was ended.  (In fact, the contract was frustrated but that still means you are entitled to your money back.)

3 - If they do not refund your monies immediately then you will laert Trading Stanrads and the local press, even as you also instigate an action in the small claims court.

You may only be seventeen, but that doesn't make you a lower class citizen that they can trample over.  I suspect that the minute you stand up for yourself formally, they will equally sit up and take notice.

With the exception of our own dear JJ, I hate car dealers!

Cat

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(,,,)=^_^=(,,,)

I got my £1000 back and bought a car from another dealer.

I mentioned Stumacs guidance relating to financing and this was spot on, but I also double checked my legal position with the citizens advice bureau who confirmed that I was fully entitled to a refund and gave me a clear position on my rights.

To summarise what I was able to find out - If it is a cash sale it can be a tricky since committing to buy the car consitutes an oral contract, doesn't matter whether you've signed anything - underhand salesmen saying deposits are refundable then not sticking to this, I could not find out what the legal position is. In my case the dealer claimed the deposit was non-refundable, although they would know perfectly well what my legal rights are - I think their default position is to say it's non-refundable as a strategy to tie you in to buying something from them, since the deposit can be transferred to another car.

For anyone who has laid down a deposit and there is a finance agreement involved, you can get your deposit back unless you have already signed something which says that the deposit is non refundable. See Stumacs guidance in this forum which is the confirmed legal position.

Also, speed is of the essence - if you do want to pull out, tell the dealer and suggest they make the car available for sale to other buyers immediately. If you don't do this, they do have a case for potential loss of sale from other customers, and also they will start to incur preparation costs in getting the car ready.

I would recommend speaking to the citizens advice bureau for anyone who is finding it difficult to ascertain their legal position, it's a free service and is a good next step from reading this forum.

 

Catastrophica:

With the exception of our own dear JJ, I hate car dealers!

Cat

Why thanks Cat.

Glad everyone's having degrees of success. It's true that a dealer's default stance is 'non refundable' in order to try it on hoping that the customer will accept this. Works sometimes, not others. Certainly not if folk have been here!!!

JJ

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You gotta tie yourself to the mast my friend, and the storm will end.