Buyer’s Remorse is very common in the car industry. You have signed on the dotted line for a car – possibly rushing into it, maybe getting carried away at the showroom or perhaps buying one car and then spotting a better one advertised cheaper elsewhere – and now you have changed your mind. What can you do about it?
As an example, Chris asked on the TCE forums in August 2014: “I recently went to purchase a new vehicle & paid £250 deposit to ‘hold’ the vehicle. The following morning I no longer wished to purchase the vehicle as I had found a much better offer. I called them up, explained the situation and asked for my deposit back but they refused. Am I entitled to get my deposit back?”
Buying a car in the UK is generally different from most retail industries in that you don’t usually choose your car, pay for it and drive it home on the spot. Finance, insurance and registration requirements usually mean that there is a gap of up to a week before you collect your new pride and joy (or potentially much longer if you are ordering a new car from the factory rather than buying one in stock). This waiting period often leads to the buyer reflecting on the enormity of the money they are spending, and starting to question whether or not it is a good idea. Once these thoughts start creeping in, buyers often start looking for ways to get out of their new car purchase.
If this sounds like you, then what are your options and what rights do you have? The answer depends on whether you have bought the car from a dealership in person, bought it from a dealer via phone/internet (“distance selling”) or bought it privately.
Buying a car from a private seller
Let’s deal with the last one first. If you have bought the car privately, you basically have no rights and no protections. Simples. You can go back to the owner and try to get them to take the car back for a full refund, but this has probably never happened in the history of mankind.
Buying a car from a dealership
If you are buying a car from a dealership, your cancellation and refund rights are different if you are buying in person or buying via phone/online (distance selling). To buy a new or used car from a dealership, you generally need to do two things: 1) sign a vehicle order form (which is a binding contract), and 2) pay a deposit. Once you have done these two things, you are considered to have committed to buying the car. The dealer takes the car off sale so no-one else can buy it, and you arrange to make payment for the vehicle before taking possession of it.
When you sign a vehicle order form, you are signing a legal contract to buy that vehicle. You are committing to purchase the vehicle at the price shown, with any extras listed on the order and subject to any caveats listed on the order. If you are part-exchanging your old car, you are contracting to sell the car as presented to the dealer at the price listed.
Buying a car in person from a dealership
A vehicle order signed on the dealer’s premises has no cooling-off period. Once you sign it, you are legally committed to everything shown on the form. Obviously you have consumer rights to return a car which is faulty and get a full refund, but you don’t have the legal right to simply change your mind either before or after taking delivery. You have signed a contract and you are expected to fulfil it. A dealer may be prepared to negotiate changes to the contract in order to keep you from walking away, but they do have the moral high ground here as it’s you who wants to change the contract.
Buying a car at a distance or off-premises
If you are buying a car over the phone or online, which can be quite common if you are buying a car located in a different part of the country, then you do have more legal protection. The same applies if you are buying a car off-premises (eg – a dealer brings a car to your house and you sign a vehicle order there). In a nutshell, you have the right to cancel from the moment an order is placed until 14 days after taking delivery of the car. The dealer is required to provide you with details of their returns/cancellation policy and explain who pays for the cost of returning the car if you change your mind. Their policy may include charges for returning/collecting the vehicle, but they must provide you with this information up front. You are liable for any damage you cause to the car.
What is important with regard to Distance or Off-Premises Selling is that the specific act of sale must be done at a distance. This means that you have to sign and return a vehicle order form, and have the dealer sign it and provide you with a copy, without you setting foot on their premises. Many dealers will try and avoid this by taking a deposit to “hold” the vehicle for you, or sign a draft contract “subject to viewing the vehicle”, and the final contract is only signed when you trek over to collect the car. The new contract supercedes the old, and vehicle is technically sold on the premises rather than at a distance. Dealers often use this technique to try and avoid their cancellation obligations under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, which replaced the old Distance Selling Regulations.
What does this mean in the real world?
In reality, rather than legal theory, there is very little that a dealer is going to do if you walk away from the contract. They could try and take you to court to force you to pay for the car and take it, but that would cost them much more than the profit they would make on the sale. Which is the reason for…
Usually you will be expected to put down about 10% of the purchase price – or at least a reasonably hefty sum of money that you wouldn’t want to lose – when you sign the vehicle order. There is no legal requirement for this, but it is standard practice.
A dealer incurs costs in preparing a car for sale, processing paperwork and taxing the vehicle. They are not going to start spending money getting your car ready without a significant financial commitment from you when they know you can walk away from your contract without any real repercussions.
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.
A deposit is also used as a way of forcing a commitment from an undecided customer. If you are looking at a nice car at a dealership, but want time to think it over or get your finances in place, the dealer will often offer you the chance to put a deposit on the car to “hold” it while you finalise yourself. Don’t be fooled – once you give a car dealer your money, you will have to fight to ever get it back again.
Cancelling your order – what rights do you have?
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. But they can’t realistically force you to pay the remainder and take the car, so at worst you walk away having lost a few hundred or a couple of thousand pounds. You can fight them to try and get your money back, and if you battle long and hard enough you will probably get there, but it won’t be easy.
If you are buying at a distance or off-premises, then you are entitled to your full deposit back, regardless of your reasons or any money the dealer has spent.
If there is a clause in the contract that the dealer has not fulfilled, or the car is not as advertised, then you are entitled to cancel the contract and have your deposit returned. For example, the car is advertised as having 30,000 miles on it but turns out to actually have 60,000 miles on the clock when you get it, or the purchase was subject to any condition noted on the contract (usually for cars sold unseen).
If the contract cannot be completed so you are unable to take delivery of the car, then you are entitled to get your deposit back. This usually also applies if you fail a finance application. If a dealer takes a deposit from you before your finance has been approved, they will usually give you your money back with no problems if that application is rejected.
Basically, it’s very simple. Don’t sign a vehicle order or pay a deposit for a car if you are not 100% comfortable being held to it. If you are unsure about anything, or want to sleep on it, then do so before signing or paying a deposit. Even if a salesman promises that your deposit is fully refundable, you will probably still have a fight on your hands to get it back. Don’t be talked into signing or paying unless you are sure that it is what you want. Then once you have signed your life away, do yourself a favour and stop combing the internet looking for a better deal!
You should definitely read: The Car Expert’s ten golden rules for buying a car