Car dealer refuses to refund £500 deposit...
Discussion
SpeckledJim said:
You go to work today and at the end of the day, your boss says he isn't going to pay you.
Have you suffered a loss?
(yes)
There are lots of ;conceivable; scenarios, when you think of it.Have you suffered a loss?
(yes)
He may have committed to a new vehicle, that he now has still pay to collect but now has to store elsewhere, or pull out of that deal entirely, if the costs are too great.
He had one of his employees move and prepare the car for pickup (paperwork and visually), and now has to pay him again to put all the stickers back on and move it back into the for sale lot.
He has to spend time resubmitting and paying for new sales adverts, because he cancelled all of the other ones.
Agreed. some of these probably should be attributed to the cost of doing business, but he has a clause that says that such costs are suffered by the buyer, if he decides to change his mind.
iamed said:
Could someone explain how the dealer suffers a loss?
If the OP pulls out then the dealer ends in the same position as when they started before the OP entered the showroom - with an unsold car, that has a value that the dealer places on it, but no actual market value because no buyer has yet agreed a price.
If the dealer goes on to sell the car for only 26K then they haven't suffered a loss of 1K. The car was never valued by the market at 27K because the sale wasn't completed at that price.
Of course there may be costs suffered involved in preparing the car for sale (e.g. valeting), but I don't see how any loss can relate to the non-real 27K.
Okay, so there was a period when the car was withdrawn from sale (for a very short period in this case). The dealer would have to prove that they definitely lost a sale, and place a value on the losses suffered by missing that sale. Again, the 27K value is irrelevant to that.
You're absolutely right.Too many car dealers spouting nonsense of "what ifs".If the OP pulls out then the dealer ends in the same position as when they started before the OP entered the showroom - with an unsold car, that has a value that the dealer places on it, but no actual market value because no buyer has yet agreed a price.
If the dealer goes on to sell the car for only 26K then they haven't suffered a loss of 1K. The car was never valued by the market at 27K because the sale wasn't completed at that price.
Of course there may be costs suffered involved in preparing the car for sale (e.g. valeting), but I don't see how any loss can relate to the non-real 27K.
Okay, so there was a period when the car was withdrawn from sale (for a very short period in this case). The dealer would have to prove that they definitely lost a sale, and place a value on the losses suffered by missing that sale. Again, the 27K value is irrelevant to that.
Edited by iamed on Wednesday 3rd June 13:36
Heres the answer here-which is pretty much what you're saying, and me a few pages back.
http://www.thecarexpert.co.uk/bought-a-car-and-cha...
Funkycoldribena said:
You're absolutely right.Too many car dealers spouting nonsense of "what ifs".
Heres the answer here-which is pretty much what you're saying, and me a few pages back.
http://www.thecarexpert.co.uk/bought-a-car-and-cha...
Direct quotes from your link:Heres the answer here-which is pretty much what you're saying, and me a few pages back.
http://www.thecarexpert.co.uk/bought-a-car-and-cha...
"Once you pay a deposit on a car, you are committing yourself far more than simply signing a piece of paper. This deposit is usually non-refundable, so it is a way of holding you to your purchase if you start to waver."
"If you signed the vehicle order on premises and later change your mind, then the dealer is within their rights to keep your deposit – or at least any monies that they have spent on getting your car ready."
I do not think this links says what you think it says.
mattmurdock said:
Direct quotes from your link:
"Once you pay a deposit on a car, you are committing yourself far more than simply signing a piece of paper. This deposit is usually non-refundable, so it is a way of holding you to your purchase if you start to waver."
"If you signed the vehicle order on premises and later change your mind, then the dealer is within their rights to keep your deposit – or at least any monies that they have spent on getting your car ready."
I do not think this links says what you think it says.
What do you think it says?"Once you pay a deposit on a car, you are committing yourself far more than simply signing a piece of paper. This deposit is usually non-refundable, so it is a way of holding you to your purchase if you start to waver."
"If you signed the vehicle order on premises and later change your mind, then the dealer is within their rights to keep your deposit – or at least any monies that they have spent on getting your car ready."
I do not think this links says what you think it says.
Funkycoldribena said:
What do you think it says?
It says that signing the contract, on the premises, means you have legally brought the car for that price, and therefore if you don't pay that price you are in breach of contract. It points out that in the real world, whilst the dealer could take you to court for the whole cost of the car, the costs involved in doing that would be more than the profit in the sale and mean they couldn't realistically sell the car to someone else until the court case was decided. There would also be some interpretation over actions to minimize losses which means that they may not get the whole amount, thus making it even less worthwhile.
As a result, they ask for a deposit which can then be kept if you breach the contract.
I appreciate you were supporting the 'will not pursue losses in excess of the deposit amount' view i.e. they may find it hard to argue loss of the full sale if the car is a relatively common model which is likely to easy to sell to someone else, rather than the 'no right to keep the deposit at all' view.
However, there is little point in having legally binding contracts if people can just ignore them without penalty.
Funkycoldribena said:
mattmurdock said:
Direct quotes from your link:
"Once you pay a deposit on a car, you are committing yourself far more than simply signing a piece of paper. This deposit is usually non-refundable, so it is a way of holding you to your purchase if you start to waver."
"If you signed the vehicle order on premises and later change your mind, then the dealer is within their rights to keep your deposit – or at least any monies that they have spent on getting your car ready."
I do not think this links says what you think it says.
What do you think it says?"Once you pay a deposit on a car, you are committing yourself far more than simply signing a piece of paper. This deposit is usually non-refundable, so it is a way of holding you to your purchase if you start to waver."
"If you signed the vehicle order on premises and later change your mind, then the dealer is within their rights to keep your deposit – or at least any monies that they have spent on getting your car ready."
I do not think this links says what you think it says.
mattmurdock said:
It points out that in the real world, whilst the dealer could take you to court for the whole cost of the car, the costs involved in doing that would be more than the profit in the sale and mean they couldn't realistically sell the car to someone else until the court case was decided. There would also be some interpretation over actions to minimize losses which means that they may not get the whole amount, thus making it even less worthwhile.
As a result, they ask for a deposit which can then be kept if you breach the contract.
They can only claim losses for a breach of contract. If they don't want to go through the whole rigmarole of that and possibly having to prove the loss to a Judge, then they must return the deposit in full. They cannot retain the deposit as a penalty for the breach regardless of the loss.
iamed said:
Could someone explain how the dealer suffers a loss?
If the OP pulls out then the dealer ends in the same position as when they started before the OP entered the showroom - with an unsold car, that has a value that the dealer places on it, but no actual market value because no buyer has yet agreed a price.
If the dealer goes on to sell the car for only 26K then they haven't suffered a loss of 1K. The car was never valued by the market at 27K because the sale wasn't completed at that price.
To explain, firstly step back from the concept of a 'market value' as that has no relevance in this scenario. If the OP pulls out then the dealer ends in the same position as when they started before the OP entered the showroom - with an unsold car, that has a value that the dealer places on it, but no actual market value because no buyer has yet agreed a price.
If the dealer goes on to sell the car for only 26K then they haven't suffered a loss of 1K. The car was never valued by the market at 27K because the sale wasn't completed at that price.
It should be noted that one remedy for breach of contract is asking the court to enforce 'specific performance' - that means fulfilling the agreement. However, that is rare, and it would be highly unlikely to be awarded in this scenario, as the dealer has alternative options available such as simply reselling the car.
It should also be noted that the amount awarded as losses from a breach of contract can in theory far outweigh even the value of the contract itself.
The remedy for breach of contract is not to put the dealer in the same position as before he and the OP ever met - it is to put the dealer in the same position as if the contract had not been breached.
The moment before the OP gave notice that he wished to breach the contract, the car had been formally sold, at £27,000. If the car ends up being resold at £26,000, it takes £1000 to put the dealer back in the position he was when the OP gave notice that he was breaching the contract and would not be paying for the car he bought.
PurpleMoonlight said:
Sorry but the dealer cannot cherry pick parts of the law that suit them.
They can only claim losses for a breach of contract. If they don't want to go through the whole rigmarole of that and possibly having to prove the loss to a Judge, then they must return the deposit in full. They cannot retain the deposit as a penalty for the breach regardless of the loss.
So you strongly disagree with the linked article above?They can only claim losses for a breach of contract. If they don't want to go through the whole rigmarole of that and possibly having to prove the loss to a Judge, then they must return the deposit in full. They cannot retain the deposit as a penalty for the breach regardless of the loss.
If the contract contains a term which says the deposit is non-refundable, and the contract is for a sale and not for a service which has not yet happened (i.e. provision of wedding photos, catering etc.) then that term is binding unless there is good reasons for it not to be (i.e. breaches from the selling party).
In reality, the buyer would need to take the seller to court to prove otherwise (with the associated rigmarole you mention above). Unless the contract is extremely badly worded, it is likely the seller would win if they were taken to court. A non-refundable deposit clause is a standard business practice and a standard contractual term, so it would be difficult to argue that it was an onerous or unfair term for a consumer.
You seem to have a very strange view of contract law.
A lot of of posters are missing two of the main expenses.
We are now in another calendar month. The car may well now be subject to a write down due to a drop in the book value. It's also possible that the car is on a used stock car funding facility.
By the time the dealer finds another buyer he could, quite easily, be several thousand pounds worse off.
We are now in another calendar month. The car may well now be subject to a write down due to a drop in the book value. It's also possible that the car is on a used stock car funding facility.
By the time the dealer finds another buyer he could, quite easily, be several thousand pounds worse off.
Roo said:
A lot of of posters are missing two of the main expenses.
We are now in another calendar month. The car may well now be subject to a write down due to a drop in the book value. It's also possible that the car is on a used stock car funding facility.
By the time the dealer finds another buyer he could, quite easily, be several thousand pounds worse off.
And if a meteorite fell on his lot...anything else? Maybe he now cant afford the lottery ticket that would have won 12 million....We are now in another calendar month. The car may well now be subject to a write down due to a drop in the book value. It's also possible that the car is on a used stock car funding facility.
By the time the dealer finds another buyer he could, quite easily, be several thousand pounds worse off.
mattmurdock said:
So you strongly disagree with the linked article above?
If the contract contains a term which says the deposit is non-refundable, and the contract is for a sale and not for a service which has not yet happened (i.e. provision of wedding photos, catering etc.) then that term is binding unless there is good reasons for it not to be (i.e. breaches from the selling party).
In reality, the buyer would need to take the seller to court to prove otherwise (with the associated rigmarole you mention above). Unless the contract is extremely badly worded, it is likely the seller would win if they were taken to court. A non-refundable deposit clause is a standard business practice and a standard contractual term, so it would be difficult to argue that it was an onerous or unfair term for a consumer.
You seem to have a very strange view of contract law.
in a similar way you park in a supermarket car park , ( accept the parking contract terms )pay £1 for an hour over stay by 15 minutes and are hit for a £80 bill ............the loss would be the 25p loss in revenue to the car park by overstaying the 15 minutes !not £80 If the contract contains a term which says the deposit is non-refundable, and the contract is for a sale and not for a service which has not yet happened (i.e. provision of wedding photos, catering etc.) then that term is binding unless there is good reasons for it not to be (i.e. breaches from the selling party).
In reality, the buyer would need to take the seller to court to prove otherwise (with the associated rigmarole you mention above). Unless the contract is extremely badly worded, it is likely the seller would win if they were taken to court. A non-refundable deposit clause is a standard business practice and a standard contractual term, so it would be difficult to argue that it was an onerous or unfair term for a consumer.
You seem to have a very strange view of contract law.
Its all about financial loss , How much loss has the vendor made on the sale with in 24hrs on a car sat on the open forecourt ?
If this goes to court and it probably wont , within this short time frame (< 24hrs) how much of the outstanding deposit could the dealer justify in claiming for as a loss ?
the car will not have depreciated in 24hrs
mattmurdock said:
So you strongly disagree with the linked article above?
If the contract contains a term which says the deposit is non-refundable, and the contract is for a sale and not for a service which has not yet happened (i.e. provision of wedding photos, catering etc.) then that term is binding unless there is good reasons for it not to be (i.e. breaches from the selling party).
In reality, the buyer would need to take the seller to court to prove otherwise (with the associated rigmarole you mention above). Unless the contract is extremely badly worded, it is likely the seller would win if they were taken to court. A non-refundable deposit clause is a standard business practice and a standard contractual term, so it would be difficult to argue that it was an onerous or unfair term for a consumer.
You seem to have a very strange view of contract law.
Contract law is you can only claim losses and not levy a penalty.If the contract contains a term which says the deposit is non-refundable, and the contract is for a sale and not for a service which has not yet happened (i.e. provision of wedding photos, catering etc.) then that term is binding unless there is good reasons for it not to be (i.e. breaches from the selling party).
In reality, the buyer would need to take the seller to court to prove otherwise (with the associated rigmarole you mention above). Unless the contract is extremely badly worded, it is likely the seller would win if they were taken to court. A non-refundable deposit clause is a standard business practice and a standard contractual term, so it would be difficult to argue that it was an onerous or unfair term for a consumer.
You seem to have a very strange view of contract law.
The buyer would need to prove nothing. It is the dealer that would have to justify their losses.
If the dealer wants to retain the deposit to cover their losses they need to be prepared to justify those losses if sued for the return of the deposit. If they are not prepared to do that they should return the deposit in full.
DBSV8 said:
in a similar way you park in a supermarket car park , ( accept the parking contract terms )pay £1 for an hour over stay by 15 minutes and are hit for a £80 bill ............the loss would be the 25p loss in revenue to the car park by overstaying the 15 minutes !not £80
Its all about financial loss , How much loss has the vendor made on the sale with in 24hrs on a car sat on the open forecourt ?
If this goes to court and it probably wont , within this short time frame (< 24hrs) how much of the outstanding deposit could the dealer justify in claiming for as a loss ?
the car will not have depreciated in 24hrs
These are not materially similar events though. In one, a penalty is being proposed and contractual terms applied based on unwritten action. In that case, the court may assess loss and therefore claim the penalty is onerous and unenforceable.Its all about financial loss , How much loss has the vendor made on the sale with in 24hrs on a car sat on the open forecourt ?
If this goes to court and it probably wont , within this short time frame (< 24hrs) how much of the outstanding deposit could the dealer justify in claiming for as a loss ?
the car will not have depreciated in 24hrs
In the other, an actual sale has been agreed with a written contract, into which a term states that the deposit provided is towards that sale and is non-refundable in case of a breach of the sales contract. It is not a 'penalty' and neither is it an estimate of loss.
Funkycoldribena said:
Roo said:
A lot of of posters are missing two of the main expenses.
We are now in another calendar month. The car may well now be subject to a write down due to a drop in the book value. It's also possible that the car is on a used stock car funding facility.
By the time the dealer finds another buyer he could, quite easily, be several thousand pounds worse off.
And if a meteorite fell on his lot...anything else? Maybe he now cant afford the lottery ticket that would have won 12 million....We are now in another calendar month. The car may well now be subject to a write down due to a drop in the book value. It's also possible that the car is on a used stock car funding facility.
By the time the dealer finds another buyer he could, quite easily, be several thousand pounds worse off.
Especially considering that ROO works in that industry and hence has a better idea of the realities of the situation.
Hollywood Sci-Fi movie plots aside.
PurpleMoonlight said:
That's the nature of his business though, and not a direct consequence of the breach of contract by the buyer.
It is the nature of the business, however, if the OP had gone through with the purchase, the car would not now incur a book drop in value, which on a car of that value could be up to £1k. And as Roo said the dealer now needs to continue paying the stocking finance, advertising etc etc.Therefore the dealer clearly will have suffered loss.
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