Car dealer refuses to refund £500 deposit...
Discussion
andy_s said:
Refusing to refund a deposit for a new car made to order I can understand, but for something already sitting in the lot...?
The dealers lost bugger all really. Non-refundable deposits are used to close a sale there and then and prevent people changing their mind overnight more than anything I suspect.
The dealers lost bugger all really. Non-refundable deposits are used to close a sale there and then and prevent people changing their mind overnight more than anything I suspect.
this
The deposit is just a part payment for goods or services and part of a contract for such. If the contract is cancelled, the aggrieved party is entitled to compensation for any losses incurred in that cancellation. The deposit can be used as part or all of that loss.
Despite what any contract may state, the deposit is not sacrosanct to be retained by the dealer regardless of the loss incurred. Any clause that says they can is unlawful and therefore unenforceable.
This is the Law, anything else is immaterial including 'manning up!'.
Despite what any contract may state, the deposit is not sacrosanct to be retained by the dealer regardless of the loss incurred. Any clause that says they can is unlawful and therefore unenforceable.
This is the Law, anything else is immaterial including 'manning up!'.
LoonR1 said:
Getragdogleg said:
LoonR1 said:
Whilst I know everyone will be fully supportive of the OP and accuse the dealer of sharp practice and quote a load of legal stuff around this, what would happen if it was the other way round? How would we react with a thread like "I paid a deposit of £500 this week and the dealer has to returned it to me today, as he's sold the car to someone else"
Would everyone then claim that the deposit suddenly became a legally binding commitment to buy and sell?
I wont, the deposit is the dealers and the OP should walk away, it is a binding agreement to buy and if the deal goes wrong it is forfeited.Would everyone then claim that the deposit suddenly became a legally binding commitment to buy and sell?
If the imaginary scenario you described in the second part of you post was to come up I would say the dealer was in the wrong and the deposit is a binding agreement to sell.
years ago I advertised a 3000 gxl capri on ebay . the car was kept in storage which I paid monthly .
during the time the car was on ebay it had 20 bidders , however it had not reached its reserved 4 days from the end date. then I got a call from a chap begging me to remove the car from auction as he wanted it so badly , ok I said if you send me half the reserve as a deposit.
the chap paid , I removed the ad and waited for the chap to turn up to buy the car .
he did not turn up for 6 weeks !!! he sent a mechanic round who proceeded to tyre kick and suck his teeth , after he was sent packing , the chap phoned me to ask for his deposit back .
I thought good luck with that mate , chap was almost in tears over the phone , ok I hate timewasters , but it was a fair chunk of cash , so I told him I was going to deduct my losses the 6 weeks storage costs , ebay fees , relisting fees, and for being messed about £50.
the rest was returned
during the time the car was on ebay it had 20 bidders , however it had not reached its reserved 4 days from the end date. then I got a call from a chap begging me to remove the car from auction as he wanted it so badly , ok I said if you send me half the reserve as a deposit.
the chap paid , I removed the ad and waited for the chap to turn up to buy the car .
he did not turn up for 6 weeks !!! he sent a mechanic round who proceeded to tyre kick and suck his teeth , after he was sent packing , the chap phoned me to ask for his deposit back .
I thought good luck with that mate , chap was almost in tears over the phone , ok I hate timewasters , but it was a fair chunk of cash , so I told him I was going to deduct my losses the 6 weeks storage costs , ebay fees , relisting fees, and for being messed about £50.
the rest was returned
When I was in the trade most car sales places make it pretty clear that the despot is non refundable unless they cant sell you the car.
Could the dealer not claim the sales person is on £2k a day and you wasted a quarter of his day.
I would offer £100 for time wasted and ask for the £400 back.
I have had a guy do a similar thing and he accepted he had lost his deposit in the end I convinced my boss to give him half back.
Could the dealer not claim the sales person is on £2k a day and you wasted a quarter of his day.
I would offer £100 for time wasted and ask for the £400 back.
I have had a guy do a similar thing and he accepted he had lost his deposit in the end I convinced my boss to give him half back.
DBSV8 said:
andy_s said:
Refusing to refund a deposit for a new car made to order I can understand, but for something already sitting in the lot...?
The dealers lost bugger all really. Non-refundable deposits are used to close a sale there and then and prevent people changing their mind overnight more than anything I suspect.
The dealers lost bugger all really. Non-refundable deposits are used to close a sale there and then and prevent people changing their mind overnight more than anything I suspect.
this
I suspect you are wrong.
balls-out said:
If a contact was formed the dealer is entitled to be put in the position he should have been in. He should have sold a car and have a profit in his pocket.
I suspect you are wrong.
But in that case "the position he should have been in" - would be to force the completion of the contract?I suspect you are wrong.
As I understand it, the dealer has an obligation to minimise losses, but could seek to recover some of the costs.
In reality and saving everyone grief, asking for 50% back would probably indicate good will on both sides, save court costs and time and let everyone get on with things... although other options of course would be open.
Just an aside but I purchased a car (placed a deposit that afternoon) and was told the next day the car had been sold by a different main dealer location a couple of hours before I put my deposit down.
Luckily as it was a main dealer they had another sufficient replacement but if it had gotten messy I wonder where that would have left the deposit.
One rule for some and one rule for the rest?
Luckily as it was a main dealer they had another sufficient replacement but if it had gotten messy I wonder where that would have left the deposit.
One rule for some and one rule for the rest?
PurpleMoonlight said:
The deposit is just a part payment for goods or services and part of a contract for such. If the contract is cancelled, the aggrieved party is entitled to compensation for any losses incurred in that cancellation. The deposit can be used as part or all of that loss.
Despite what any contract may state, the deposit is not sacrosanct to be retained by the dealer regardless of the loss incurred. Any clause that says they can is unlawful and therefore unenforceable.
This is the Law, anything else is immaterial including 'manning up!'.
I agree with the first sentence of this, but not with the rest of your analysis. I think you (and the other posters who seem to be thinking about enforceability of penalty clauses) might be barking up the wrong tree.Despite what any contract may state, the deposit is not sacrosanct to be retained by the dealer regardless of the loss incurred. Any clause that says they can is unlawful and therefore unenforceable.
This is the Law, anything else is immaterial including 'manning up!'.
The payment of the deposit was a contractual obligation on the OP. Now the OP has made it known that he will not be paying the remainder of the purchase monies or taking delivery (in the legal sense) of the goods. This is an anticipatory repudiatory breach on the OP's part. It means that the trader is entitled to treat the contract as at an end, and both parties are released from their future obligations. Note they're released from future obligations. It doesn't mean that that obligations already performed (i.e. the payment of the deposit) have to be reversed.
The trader can, as has already been pointed out, sue for his losses too. Let's say that he obtains the best price for the car but it's on his forecourt for a couple of months before he does, and that price is £26,000. Broadly, he'd be entitled to sue the OP for £500. As long as he'd taken reasonable steps to to sell the thing, he would have discharged is duty to mitigate losses.
Even if my analysis above is incorrect, in any case, the various statements earlier about the trader keeping the deposit being a penalty and therefore being unenforceable at law are over-simplified at best. It's true that penalty clauses are unenforceable, but liquidated damages clauses are. I don't think a court would even get as far as thinking about applying the relevant tests to the clause regarding retention of deposit, but if it did, it may well consider it to be a liquidated damages clause (i.e. a genuine attempt to pre-estimate the loss caused by an event, as judged at the time of formation of the contract) and therefore enforceable. The amount of actual loss incurred would not be relevant.
My advice OP: treat the £500 as gone. TBH, I'd say that's fair, too. Contrary to a common misconception, there's no general right for a customer to change his mind after they've entered a contract for the sale of goods. Cross your fingers that he manages to sell the car for at least £26,500 (or doesn't pursue you for his losses).
The only other option I see is to try to appeal to the trader's better nature and try to agree a compromise. Perhaps explain the (unforeseen) reason why you're having to back out again and make sure you make it clear that you'll be telling all your friends about how understanding the dealer was, and he even gave you (e.g.) half your deposit back.
Edited by belly2002 on Monday 1st June 16:34
DBSV8 said:
andy_s said:
Refusing to refund a deposit for a new car made to order I can understand, but for something already sitting in the lot...?
The dealers lost bugger all really. Non-refundable deposits are used to close a sale there and then and prevent people changing their mind overnight more than anything I suspect.
The dealers lost bugger all really. Non-refundable deposits are used to close a sale there and then and prevent people changing their mind overnight more than anything I suspect.
this
belly2002 said:
The trader can, as has already been pointed out, sue for his losses too. Let's say that he obtains the best price for the car but it's on his forecourt for a couple of months before he does, and that price is £26,000. Broadly, he'd be entitled to sue the OP for £500. As long as he'd taken reasonable steps to to sell the thing, he would have discharged is duty to mitigate losses.
I am not convinced the dealer can carry forward their losses to the eventual sale of the car to someone else (if any).When the contract is cancelled the dealer still has the car which is arguably still worth the same as it was the day the customer agreed to purchase it. The dealer has suffered no loss on this front at the point of cancellation.
Where they may have suffered loss is the preparation of the car for that customer which they would have to do again for another customer, eg a valet (especially if undertaken by a third party).
PurpleMoonlight said:
I am not convinced the dealer can carry forward their losses to the eventual sale of the car to someone else (if any).
When the contract is cancelled the dealer still has the car which is arguably still worth the same as it was the day the customer agreed to purchase it. The dealer has suffered no loss on this front at the point of cancellation.
Where they may have suffered loss is the preparation of the car for that customer which they would have to do again for another customer, eg a valet (especially if undertaken by a third party).
Exactly. The dealer being a pig can keep all the deposit but if you could be bothered to take them to court they would have to quantify their losses which at a rough guess would be around 100-250.If it was me I'd go for a 250 split and if they played stubborn I'd take it to court.When the contract is cancelled the dealer still has the car which is arguably still worth the same as it was the day the customer agreed to purchase it. The dealer has suffered no loss on this front at the point of cancellation.
Where they may have suffered loss is the preparation of the car for that customer which they would have to do again for another customer, eg a valet (especially if undertaken by a third party).
k is a deposit for then?DBSV8 said:
years ago I advertised a 3000 gxl capri on ebay . the car was kept in storage which I paid monthly .
during the time the car was on ebay it had 20 bidders , however it had not reached its reserved 4 days from the end date. then I got a call from a chap begging me to remove the car from auction as he wanted it so badly , ok I said if you send me half the reserve as a deposit.
the chap paid , I removed the ad and waited for the chap to turn up to buy the car .
he did not turn up for 6 weeks !!! he sent a mechanic round who proceeded to tyre kick and suck his teeth , after he was sent packing , the chap phoned me to ask for his deposit back .
I thought good luck with that mate , chap was almost in tears over the phone , ok I hate timewasters , but it was a fair chunk of cash , so I told him I was going to deduct my losses the 6 weeks storage costs , ebay fees , relisting fees, and for being messed about £50.
the rest was returned
during the time the car was on ebay it had 20 bidders , however it had not reached its reserved 4 days from the end date. then I got a call from a chap begging me to remove the car from auction as he wanted it so badly , ok I said if you send me half the reserve as a deposit.
the chap paid , I removed the ad and waited for the chap to turn up to buy the car .
he did not turn up for 6 weeks !!! he sent a mechanic round who proceeded to tyre kick and suck his teeth , after he was sent packing , the chap phoned me to ask for his deposit back .
I thought good luck with that mate , chap was almost in tears over the phone , ok I hate timewasters , but it was a fair chunk of cash , so I told him I was going to deduct my losses the 6 weeks storage costs , ebay fees , relisting fees, and for being messed about £50.
the rest was returned
This is exactly as I think it should be done. Any expenses incurred in the sale AFTER the deposit is paid are deducted from the deposit, the remainder belongs to the buyer until the sale is completed or terminated.
Funkycoldribena said:
And another.I think some posters are under the impression this car is brand new and being ordered in pink.All this crap about dealer suing for losses under 27k-what a load of tosh-try and get that to stand up in court.
The aim of damages in contract are to put the innocent party in the position that he would have been had the contract been properly performed. If the contract here and been properly performed, the dealer would have £27,000 in his bank account (and no car on his forecourt). If, when he does manage to sell the car, it's sold for less then (subject to remoteness of damage/duty to mitigate), he is entitled to the difference.
And it would stand up in court (subject to remoteness/mitigation). If you think differently then fair enough but I'm going with the 167 years of legal authority starting with Robinson v Harman.
PurpleMoonlight said:
I am not convinced the dealer can carry forward their losses to the eventual sale of the car to someone else (if any).
When the contract is cancelled the dealer still has the car which is arguably still worth the same as it was the day the customer agreed to purchase it. The dealer has suffered no loss on this front at the point of cancellation.
Where they may have suffered loss is the preparation of the car for that customer which they would have to do again for another customer, eg a valet (especially if undertaken by a third party).
As above, I'm afraid. Damages are awarded on an expectation loss in contract. If the contract had been properly performed, the dealer would have the cash, not the car.When the contract is cancelled the dealer still has the car which is arguably still worth the same as it was the day the customer agreed to purchase it. The dealer has suffered no loss on this front at the point of cancellation.
Where they may have suffered loss is the preparation of the car for that customer which they would have to do again for another customer, eg a valet (especially if undertaken by a third party).
I could understand your point if damages were awarded on the tortious basis (looking backwards rather than forwards, but they wouldn't be here; it's a clear breach.
You're correct that he still has a car that he can sell. However, saying that he has suffered no loss on account of that fact is not correct. Whilst the car remains unsold, he just won't know how much his loss is going to be (or if he will suffer one at all).
maurauth said:
Just an aside but I purchased a car (placed a deposit that afternoon) and was told the next day the car had been sold by a different main dealer location a couple of hours before I put my deposit down.
Luckily as it was a main dealer they had another sufficient replacement but if it had gotten messy I wonder where that would have left the deposit.
One rule for some and one rule for the rest?
Of course there is. Plenty of stories of this happening and the dealers just think they don't have to refund as you'll cheerfully switch to another car.Luckily as it was a main dealer they had another sufficient replacement but if it had gotten messy I wonder where that would have left the deposit.
One rule for some and one rule for the rest?
PurpleMoonlight said:
... the dealer still has the car which is arguably still worth the same as it was the day the customer agreed to purchase it...
It's also arguably now just worth the trade value that the dealer paid for it, less any depreciation. As opposed to the £27K value which it was worth to the dealer while the contract was in place.I can't believe any sane person would go legal on this, or even threaten it. Roll over, play the "poor, poor me" and the "I'll tell my friends how nice you've been" cards and see what you can negotiate. Don't threaten, and remember whose foot the boot is on now, and the risk of coming away with nothing, or worse.
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