We get a lot of questions on our forum and in the comments sections of our articles from car buyers who have given a car dealer a deposit for a car and now – for whatever reason – want it back.

Quite often, buyers will be told that a deposit is refundable if they change their mind, only to subsequently change their minds and be told they can’t have their deposit back after all.

Usually there is no legal right for you to change your mind after buying a car from a dealer. There are no grounds to terminate the contract on medical grounds, compassionate grounds, loss of job or anything else. Once you hand over your cash, it’s gone. Trying to get your deposit back again involves negotiating the agreement of the dealer to refund your money, and is usually entirely up to them to decide to do so or not.

It should be noted that there are legal arguments about how much deposit a dealer is entitled to keep based on their reasonable costs and losses of income from a cancelled order. However, if it gets to the point where you are taking the dealer to court to argue about getting some or all of your deposit back, you are probably spending much more than whatever the deposit was anyway.

So what are the rules regarding deposits and when should you be able to have your deposit refunded?

When is a deposit not really a deposit?

The first problem is the word itself. Most people think of a deposit as a refundable bond or temporary holding payment, but in car sales that isn’t generally true. When you give a car dealer a deposit, it is almost always considered an upfront or initial payment on a car.  As a rule, it is not refundable unless specific circumstances apply.

When buying a car from a dealership, the dealer will want two things: a signed contract and/or a deposit. Having both is better, but one or the other will do if necessary to consider a car sold. If you sign an order form or give a car dealer a deposit on a vehicle, you are buying that car. The deposit is a form of security to hold the car until you are ready to pay the rest of the money and collect the vehicle. If you change your mind, you lose the deposit. Simple enough in most cases.

This is entirely fair enough. Car dealers exist to sell cars. If you walk in and say “I want to buy this car right here”, but you are not prepared to sign an order form and are not prepared to put down a deposit, then you’re not serious about buying the car.

A dealer is not going to hold that car for you without some kind of guarantee that you are actually going to come back with the rest of the money. A signed order is nice, but if you try to back out of it then there’s not a lot they can do unless they want to take you to court. So they take a deposit – the amount may vary, but it has to be significant enough that you won’t simply vanish if you change your mind. You will want that money back and they will be able to either fight you for it or use it as an opportunity to keep you from cancelling your order.

Taking a deposit is also a tactical ploy from the salesperson. Once you have pulled out your wallet, you are making a psychological commitment to buying that car and you are less likely to change your mind or keep looking around for a better deal.

Giving a car dealer a cash deposit on a carBut the salesman told me that my deposit was refundable!

If a dealer tells you that a deposit is fully refundable if you change your mind, do not believe them unless they are prepared to put that in writing. This means getting them to email you to spell out the conditions for refunding your deposit, and/or noting on your receipt (always get a receipt) to say that the money paid is refundable if you choose not to continue with the purchase.

Most dealers will not be prepared to put the above in writing. Why not? Because deposits are not usually refundable unless it is the dealer who is cancelling the order.

Always remember that a verbal promise from a car dealer is worth nothing. If someone promises you something, get it in writing in an official document (email is fine, as it will show sender, email address and date) or else the promise does not really exist. It’s Rule Eight of our Ten Golden Rules.

So when is a deposit refundable?

Generally, there is no cooling-off period when you buy a car from a dealership. If you visit the dealer and buy a car that you have seen at the dealership, even if the actual sale takes place off-premises, then you have bought that car and there is no legal basis to cancel your order and get your deposit back.

However, if the entirety of the sale takes place off-premises (so you are buying a car without ever visiting the dealership), then you have 14 days to change your mind – even after paying for the car and taking delivery. In this case, you are entitled to a full refund of any monies paid (some conditions do apply, though).

If the dealer cancels the order for whatever reason, such as the car no longer being available (it happens a lot, particularly in large multi-site operations), then you are entitled to your money back.

If the contract is voided for any reason, such as the factory not being able to supply the vehicle (production may have ended or halted, or the specification may have changed), then you are entitled to have your deposit back and are not obliged to take another vehicle.

If your finance application is declined, most dealers will refund your deposit without question. Technically, they could hold you to the contract and oblige you to find funding elsewhere, but in reality this doesn’t happen and you can get your money back.

Never give a car dealer money unless you are 100% comfortable with buying the car

This is one of The Car Expert’s Ten Golden Rules of buying a car. Only hand over your cash or credit card once you are completely comfortable with buying that exact car for that exact amount of money (whether cash or finance). If you’re still hoping to get a better deal, or you’re not sure about your job circumstances, or you’re not fully convinced about the colour, or you haven’t discussed it with your significant other or accountant, or any other reason at all, then don’t put a deposit down on the car. It is always much more hassle to get your money back again than it is to not spend it in the first place.


 

74 COMMENTS

  1. Hi Stuart.

    Thank you for this informative article. I wonder if you don’t mind answering a personal query on this: I put down a £300 deposit on a car from a dealership and the entirety of the sale took place over the phone and not on premises. A couple of days after putting down the deposit over the phone i did not go ahead with the order. I did not sign any sort of order form etc. As per your article above i believe i am entitled to this money back but the salesman told me that they had to bring in another car from a dealership etc and therefore incurred costs so i cannot have this deposit back. None of this i was ever aware of. They even mentioned that they can hold this deposit in case i wanted to buy a car from them in the future. I have tried contacting them again to request my refund back but have now received no communication back from them and i am wondering a) if i am entitled to my deposit back and b) how to approach the situation?…

    Any help would be most appreciated.

    Thanks

    Matthew

  2. Hello, a £255 deposit was put down on a used car. My son returned the car within the 30 day, under the consumer protection act, as it was not ” fit for purpose”. The company had it back and cancelled the credit agreement, however the deposit had not been returned. Where do we stand.
    Thank you

    • Hi Sandra. Yes, if the car has been rejected under the Consumer Rights Act 2015, the full invoice amount of the vehicle is refundable.

      The finance agreement is separate from the deposit paid to the dealer. You will need to keep chasing the dealership until it is repaid.

  3. Hi. I wonder if you could help please? I’ve recently placed a £1000 deposit on a used approved car from a main dealership. This has all been done over the phone and I was due to complete the sale in person in a few days. I haven’t signed any contracts or seen and T&Cs. I’ve now looked properly at my finances and I am unable to proceed with the deal. At the time I paid the deposit I wanted some time to think about it, but was talked into placing the deposit. Will I be able to get my deposit back and walk away from the deal?

    Any help would be greatly appreciated.

  4. Hi. I test drove a car and left the dealership with no purchase etc. A few days later I decided to buy the car and paid £1000 deposit over the phone. I have signed no paperwork and can now no longer proceed with the purchase. Because I had test driven the car does this mean that although I have signed nothing and paid the deposit over the phone that I am not entitled to my deposit back?

    • Hi Judith. The dealer may be happy to refund your £1,000 or they may want to argue the matter.

      If they want to argue with you, it is likely to depend on how much discussion went on at the dealership, and whether they provided you with a quotation. If you were paying a deposit based on a quotation provided on-site, they are likely to argue that the sale was largely inducted on the premises and that your deposit was confirmation of your acceptance of their offer.

      If you keep arguing, you will probably get it back eventually.

  5. I have seen and enquired about a car online. I agreed a price over the phone and paid a £200 deposit. The dealership has now got back to me and says the picture is a ‘library’ image and that the car has lots of extras on it which has increased the price by about £400. I can stand the extra cost but one of these extras is a red ‘touch’ package. I was under the impression I had orderd a black car only to find out its black and red. Should I be able to get my deposit back?

    • Hi Kate. You are absolutely entitled to your deposit back. The car is not as described so you can withdraw from your purchase and get your money back. The dealer may try and cajole you into buying the car anyway, or transferring your deposit to another car they have for sale, but you do not have to accept any alternative option.

      • Thank you for your advice. I have been to the dealer this morning and told them I did not want the car as it wasn’t the car I had agreed to put a deposit on. They said it was fine and I could get my deposit back and they would call me in the afternoon once a manager could process it. Surprise surprise the phone call never happened and when I called back the sales person I have dealt with was either busy or had gone home. I will try again tomorrow and this time if they don’t return my call I will go again in person and wait at the dealership until a manager becomes available.

  6. Hi there. Thanks for all the advice above. A friend has just phoned and falls in the middle of many of the discussions above.
    He did visit the dealership to test drive the car, but then paid £500 deposit over the phone by debit card.
    He has not seen or signed any paperwork.
    He now wants to cancel the order – but more than 14 days have passed since he paid the £500.
    The dealer says it won’t refund the money because he’s taken longer than 14 days to tell them.
    Any advice would be a great help.
    Thanks
    Dave
    London

  7. I have seen car on auto trader with trader seller, put down 200 deposit to reserve car, but once visited showroom car did not match description of add, I have requested refund which trader has refused. All dealings has been done over phone or sms prior to visit when found out car does not match description. Can I get deposit back, if, so how? Thanks for advice.

    • Hi Sunny. Yes, you are entitled to your deposit back. Firstly, the deposit was placed without you setting foot in the dealership, so you are covered by the Consumer Contracts Regulations 2013. You can cancel your purchase and get a full refund. Secondly, the car is not as advertised, therefore you have the right to cancel your purchase under the Consumer Rights Act 2015.

    • Read this article about changing your mind after buying a car
    • Read this article about the Consumer Rights Act and rejecting a car
    • If the dealer refuses to give you your money back, you will need to take action against him. He is probably assuming that you will give up rather than pursuing this, since the cost of engaging a lawyer is going to be more than £200.

      I would suggest you write to him, pointing out your rights in law, and then keep hassling him every day until he refunds you the money. If he realises that you are not going to give up, he will eventually pay you to make you go away.

  8. Hi I recently but a £500 deposit down on a I haven’t seen the car as they said they would have to bring it from another garage. I haven’t signed anything but when I’ve looked into it I can’t afford it. I phoned to cancel it, bearing in mind it’s not even at the garage yet and they said i can’t have my deposit back. Is this right?

  9. My wife has put a £200 deposit down on a car based on a quote using a friends and family discount. However it turns out the discount was family only and so not valid which has increased monthly cost by £50. Is she entitled to her deposit back? The deposit being put down and increase in price occurred over 4 days.

    • Hi Michael. It will depend on whether or not the policy changed in that time, or if you were simply wrongly advised about how the discount works.

      If the policy changed so that she was no longer eligible, you would be entitled to cancel the contract and get your deposit back. If the policy never allowed it and you were mistaken, you’re probably not entitled to your money back – unless you can show that you have been incorrectly advised in writing (verbally doesn’t count).

  10. Hi Stuart,

    I have recently put a deposit down for a vehicle and was offered an extended warranty. The warranty is due to start when the manufactures warranty lapses on 31.10.2017. Having read the fine print of the warranty I will still purchase the vehicle but won’t be taking out the warranty. How do I stand legally regarding the whole of the deposit.

    • Hi Derek. The dealer probably won’t be happy (they get a nice kick-back from the warranty company), but you are well within your rights to cancel the extended warranty.

  11. Hi Stuart,

    I’m looking at buying a car from the local Ford dealer. They are requesting that I pay a £500 deposit before the car is moved over from another branch in Oxfordshire and that this is normal practice. Does this consitute an off-premises sale? I’m just wondering where I’d stand if there was a fault with the car or I wasn’t happy with what it looked like when it arrived.

    • Hi Nick. If you’re in the dealership, it’s not an off-premises sale – regardless of where the car is.

      Make sure you have a suitably-written comment in the contract which says something along the lines of “Contract subject to customer’s inspection of vehicle”. If you’re not satisfied, the contract is void.

  12. Hello. I recently put a £500 deposit on a vehicle that I saw on the internet. I called the dealer and asked questions including if the car has been HPI checked which he said it had which he now denies. I have checked the car myself which showed that it is a Cat D write off. I have decided that because of this I no longer want the car and I have asked for my money back. The dealer is being difficult and said that I should have checked it before giving them the deposit. There is no mention on their website or advert Goethe car. Please could I have some advice SD to where I stand. Many thanks.

    • Hi Mat. A dealer is oblige to declare if the car is a Cat C or Cat D write-off. It’s very unlikely that the dealer would not have done an HPI check; it’s standard practice.

      Saying that you should have checked is unacceptable, and you should be able to cancel your order and get your deposit back.

  13. Hi there, I bought a van online with an initial £500 deposit. After delivered I found a wide array of faults making it not fit for purpose. All within 7 days. After the dealer finally agreed to take it back he emailed me saying he sees the faults and will offer refund or replacement. I said refund and after weeks of him going on holiday and ignoring me he finally sent me an email saying the money will be in my account within 2-3 days, minus the deposit. Its been a week and nothing has gone in yet.

    Can he really hold a deposit for a faulty car? How do I fight this?
    Please help!

    Regards, Nicole.

    • Hi Nicole. If it’s a work vehicle (and vans usually are), then you are not covered by the Consumer Rights Act as you would be for a personal use vehicle.

      Morally, if the dealer has accepted that the vehicle is faulty and agreed to refund you, it should be 100% without holding anything back (assuming the vehicle is in the same condition as when you bought it). However, legally is not the same as morally, so you may have to fight to get your final £500 back.

  14. Hi Stuart. I started a discussion over the phone with a private dealership to purchase a one owner car with a full main dealer service history. I used the cars registration on AutoTrader website to get model spec (listed as ‘Exec’ version) information and a guide price for the car I wanted to purchase. The dealer advert on Auto Trader included a video walk around of the car, showing and stating, amongst other things, that a full set of original documentation was present with the car.

    I then visited the dealership on Saturday to look at and test drive the car. During the visit I enquired about an engine repair item that I knew the car required. The sales person said this had now been completed by the main dealer, however did not produce any paperwork to that effect.

    In the course of our discussions I was told that the service book was not available with the car (contrary to the video advert), but that the main dealer would validate the full service history and provide a new service book. I then asked about the last service that fell due in 2016, which should have been a major service based on the age and mileage of the vehicle. The sales person went away to call the main dealer and then came back to tell me that only a minor service had been done in 2016 and not the required major service. The private dealer said they could not do the major service on the vehicle for me, but might be able to get a trade price for me on the major service work, however they could not put that in writing.

    I left the dealership not having paid any deposit, saying that I needed to think about it all before proceeding.

    Later that day, in a follow conversation with the dealer, the salesman told me that they had other people wanting to see the vehicle and that I couldn’t really wait overnight to make a decision, but they could ‘take it off sale’ while the outstanding issues (engine repair confirmation, new validated service book and trade price for major service) were being sorted out, if i left a £1,500 deposit. I reluctantly agreed to do this, thinking that the deposit would be refundable in the event the we could not resolve the outstanding issues and paid the deposit over the phone with a credit card

    Later on Saturday evening, more from a peace of mind point of view than anything else, I ran an Auto Trader Experian Vehicle check on the car. On checking the results, I was surprised to find that the car was listed as the ‘base’ version and not the Exec version. This was a new concern, as I knew that one feature which I was particularly interested in having (rear seat heating) was standard in the Exec spec’d car, but only an option in the “base’ model.

    On Sunday morning I called the dealership to find out about the spec anomaly and to check the car did have rear seat heating. The sales person who I was working with was not in, but another sales person went to physically look at the car and came back to inform me that it did not have heated rear seats!

    Reflecting on all of this on Sunday, I came to the conclusion that there were now just too many issues with the deal for me to continue and that it would be better for me to pull out before completing the purchase.

    I e-mailed the sales person I had been dealing with, explained the situation as outlined above and suggested that they put the car back on sale immediately, while we agree how best to conclude our business. When I spoke with the sales person on Monday afternoon, I was met with a fairly frosty response, saying essentially that they were legally entitled to keep my deposit and that I should consider that carefully if I choose to now pull out of the purchase.

    Needless to say, I don’t feel that the vehicle I thought I buying, is the one thats being offered and there are now too many questions in my mind about service and maintenance history for my comfort. Moreover, I have lost trust in the relationship, which prior to my visit to the dealership I felt was ok. I would really just like to get my deposit back and walk away at this point.

    How would you advise me to proceed?

    Many thanks

    Chris

  15. Hi Stuart, I put down a £300 deposit as part of a PCP deal on a new VW and cancelled the next day before the car was ordered. Will I be entitled to a deposit?
    Cheers, Pete

  16. Hi Stuart. My daughter and son in law recently agreed to by a 7 year old Vauxhall Meriva from a garage and put down a deposit agreeing to collect the car a few days later. They were told the paperwork was at there other garage and it would be ready when they collected the car.
    However the day before the collection they were phoned to say that there wasn’t a V5 as the previous owner had it and they would have to fill out a V62?
    I advised them that the garage should get the V5 before they should buy it, but nothing has happened 2 weeks on.
    They have since found another car, but the previous garage is refusing to refund the deposit. Do they have any legal rights as the garage didn’t say up front that the 5 was lost, and what should they do? Thanks

    • Hi Mark. You are quite right to insist that the car has a valid V5C certificate before purchasing the vehicle. Otherwise there is the risk that the original owner could claim the car back and it could get messy (there are scams involving this sort of behaviour, although they are not common).

      If the dealer is refusing to refund their deposit, they will probably have to call in a solicitor to take (or at least threaten) legal action.

  17. Hi. I put a deposit down of £500 on a car after the dealer agreed it would be fully refundable if I decided not to proceed with the car. There was some body work repairs that needed doing that the dealer said he would be doing away but if I left a deposit he would get the work done quicker. I would then view the car to decide if I was happy to proceed any buy the car. A few days later, on reflection I decided that I didn’t want to consider the car being repaired and asked or my deposit back. The dealer is not refusing to pay my deposit back as he is saying he has spend out to put the car right. This was work he would of had to do anyway so I am
    Not happy that he keeps my deposit. I honestly don’t think he has had any real out of pocket expenses. The cat was even still being advertised! Do I have a right to my deposit back?

    • Hi Henry. Unless you have a written guarantee from the dealer that your deposit is refundable, then you’re probably not going to get it back – unless you kick and scream long and hard enough that they give you the money back to make you go away.

  18. Hi Stuart, I put a £300 deposit on a new personal lease car. Two days before the car was due to be delivered the lease company phoned to say the car had been damaged in the dealership and needed repairs. They were unable to confirm when the car would be delivered, offered no apology or made any attempt to compensate for consequential losses. Not sure I now want a new car which has been damaged even before I get it. If I cancel the order, will I be entitled to a refund of deposit.

    • Hi Keith. It all depends on the extent of the damage. Problem is, no-one is likely to want to give you too much info about exactly how bad it is, as neither the dealer/manufacturer or the leasing company will want you to walk away from the deal.

  19. Hi, wondering if you can offer some advice. I visited my local Audi dealership to view a car, which turned out to be unsuitable. While I was there the salesman looked through their database and told me they had a different car (higher engine size, automatic, different colour) at a different branch, and they could get it up for me to look at. I said I’d look but wasn’t sure about it. After leaving the dealership I received an email asking if I’d pay a £500 deposit to have the car brought up to view. They did state that if I decided it wasn’t for me, I’d get my deposit back. I then received an email from the business manager with finance quotes, and congratulating me on purchasing a car…which obviously got me worried. I’ve decided that the car isn’t for me, it’s not what I originally set out to buy, however the car is now at the local dealership and is awaiting me to test drive it. I’ve agreed to go today but already know I have no intention of buying this particular car. I’m worried they are going to try to pressure me or argue over refunding my deposit. Do you have any advice I can follow?

    Thanks!

    • Hi Kay. Stick to your guns and insist on getting your money back. If they try and pressure you, insist on making a complaint to the general manager about their sales tactics. If they are being completely objectionable, throw a massive hissy fit in the middle of the showroom in full earshot of other customers – that usually works…

  20. Hi Stuart,

    I wonder if you could help here. I went to a car dealer and test drove the managers car which is the model i wanted. I was told the actual car I would receive is being shipped and not going to arrive until about 3 weeks. I put down a deposit of £1000 so they can direct the car to be delivered to them. I signed some pre-contract agreement form. After 2 weeks, I’ve changed my mind as the car is “not fit for purpose”. We need a 7 seater now, not a 5 seater. Can I get my deposite back?

    Cheers

    • Hi Donald. I don’t see that the dealer would be obliged to refund your money. You can’t argue that the car is not fit for purpose when it hasn’t even arrived and you have changed the requirements after buying it.

  21. Hi Stuart,

    The managers car I drove was the exact model I wanted. However, later realising that a 7 seater would be more suitable. Any chance I could get a partial refund?

    Cheers

  22. I went to a dealership and put a $500 deposit on a car that they said I was approved for with intentions of paying the rest and getting the car only to find out the very next day that the dealership approved me for the loan but it had not yet been approved thru any bank. Am I entitled to get my deposit back and shop elsewhere?

  23. I asked about a car and was persuaded to put down a deposit over the phone and I said I would come to look at it and if all ok purchase the car. I then called back two days later to say I didnt want to go ahead. the dealer was rude and hung up on me. I then emailed him to confirm my conversation, He said that he put new tyres on the car as good will gesture and I will have part of deposit back minus the cost of tyres. I said that this was not discussed so I dont have to pay to make his cars road legal. I want my deposit back. He has refused to send me policy on terms and conditions. I didnt sign anything and he has now sold the car?. what can i do ?

  24. Hi. I ordered a new Hyundai i10 in April 2017 for delivery on 1st September. The car is white and I specified I wanted a red interior (choice was black, blue or red). I have now found out that the car is no longer made with a red interior and that I will be supplied with a black interior instead. I did not want a black interior in April and I still don’t want it, so am I entitled to a refund of the £1000 deposit? Although the car will function in exactly the same way, I consider this to be a fundamental change to my specification, which is written on the order form. Thanks…Ian

  25. Hi Stuart, It has been fascinating reading your article and the comments. I put down a £1,000 deposit on a car in early March. I had test-driven the car and visited the dealership twice, but the contracts and the majority of discussions were done via email. At the time I was told by the salesman that delivery would be expected to be in June, which was fine as we had a driving holiday booked in early July and we would need the new car by then. Upon the order being placed, I was then informed that delivery was now scheduled to be at the end of July/early August but that in practice this would move forward, so I was hopeful all would work out ok.

    The salesman then left the dealership in May and a new sales person was appointed and I asked about the status of delivery and was informed that it was now pushed to late August (nearly 6 months after the order was made). We kept asking for updates over the last few weeks with no real help from the dealership and I made the decision to cancel the order as I needed to source another vehicle quickly that would arrive in time for my driving holiday. I was assured by them that it was an issue with the manufacturer and that the delivery date could not be changed. I then emailed to cancel the order and proceeded to purchase a used vehicle that could be delivered within 2 weeks from another manufacturer and surprise surprise, the dealer came back to say that delivery could now be moved to 17 July(!), however it was too late as I had already paid a £2000 deposit on another car. Despite the car not being built yet, they are still saying I am liable for the entire £1,000 deposit. Is there anything I can do or is this lost now?

    Many thanks in advance for your advice. Prad

    • Hi Prad. It will probably depend on whether you have anything in writing (contract, emails) that specifically says that the expected delivery date is in June (prior to approx. 19 June). If the car is not deliverable with 28 days of the promised date, you can cancel and get your deposit back. It should be in the T&Cs of your contract.

      If you don’t have anything in writing, you’re not going to be able to prove anything.

  26. Hi Stuart

    I looked at a car on Auto trader and I really wanted to buy the car. I called the dealer I was willing to pay £100 as a deposit but the salesman insisted that £100 did not show my intent to buy the car and £500 would reserve it. So I unwillingly paid £500 and asked him to hold it for 1 day. and I would come the next day and if I like the car I would buy it. The entire transaction took place over the phone.

    When I went there the next day, I did not like the car as it looked very aged, not as the pics showed it. I refused to buy the car. The dealer said he was not happy and I had declined other the opportunity to buy this car. I only held that car for 1 day. He said he would not refund my deposit.

    I have then emailed him to request my deposit back.
    And he has emailed the following response
    **
    Mr Soni

    Thank you for your recent email the contents of which I note.

    My view of this position is that we entered into contract with you in relation to the BMW X5 when you willing placed a £500 deposit on the BMW X5 over the telephone.

    It is worthy of note that we declined, on no less than two occasions, to take your deposit, explaining that you should view the car in the first instance before making a commitment to buy. However, you didn’t listen to my suggestion and you we particularly insistent on placing a deposit, and therefore entering into a verbal agreement/contact with Oakwoods Group Limited in relation to the purchase of the black BMW X5 at a ‘three day sale event price’ which main stipulation was collection and payment of the goods by 17.00 hrs Saturday 24th June 2017. The only stipulation you set was that the car was to ‘drive well’, and you were accepting of age related wear and tear. A contract was entered into by both parties and agreed with those terms.

    As a result of your actions XX Limited were legally bound by the terms of that verbal contract and advised other interested parties that the X5 had been sold and we removed the X5 from our website and other third party advertising sites. The car was made ready for your collection on the aforementioned Saturday.

    Your reason for wanting to break the contract to purchase were nothing to do with they way the vehicle drove and were all condition related issue which you were happy to accept when placing your initial deposit on the BMW X5.

    XX Limited verbally agreed to release you from your contractual obligations in relation to the outright purchase of the BMW X5 but didn’t agree to return you initial deposit.

    Having had time to consider the position in relation to your deposit I have decided to retain that £500 deposit but you appeared to be more than happy to purchase a car from us in the future, so with that firmly in the forefront of my mind, I will be happy to apply your £500 deposit to any vehicle you purchase from XX.

    XXXXXXXXXXXXXXXXXXX

    PLease advise if this is even valid

    And what option do I have.

    • Hi Sunny. Your deposit is refundable as it was taken over the phone. He cannot withhold it or make you buy a different car. He may well have lost two other customers, but that’s the way the law works.

  27. Good morning. I was wondering if you can help me with my problem I found advert on AutoTrader and I have rang to car dealer to ask if the car is still available. I been told that if I want to reserve a car I need to pay 500 pounds deposit which I did on the same day. After a week a have went to car dealer to see the car. I noticed that there are few issues with car like scratches on alloy and a few scratches all over the car and seat cover was peeling off. I been told by the sales mam that the car is manufactured approved and they will change alloy,fix all paintwork and prepere a car for me to be in excellent condition. This car is almost brand new 2016 plate. After that I paid a additional 2500 deposit for the car as I wanted to choose hp finance with initial payment of 3000 pounds. I been told that they will prepare the car they will do all works and they will deliverto my home. Two days later I received a finance documents by email which I signed and I send them back via email. When they come to deliver the car I noticed that car have even more scratches and dents and I refused the delivery-car went back to a dealer. They rang me to apologise and promised to fix everything and deliver the car within the next few days. Car is with the dealer now. Can I cancel my hire purchase contract and get deposit back? Please help

    • Hi Carol. Yes, you can cancel your finance agreement within 14 days, but this does not cancel the vehicle purchase – it simply means you have to find another way to fund the car. If the dealer agrees to you rejecting the vehicle, that won’t be a problem, but it is unlikely to happen for light cosmetic damage that should be easily repairable.

  28. Ok thank you for the response. Whats if I do not want to buy this car anymore?Its possible to cancel purchase?

  29. Hi stuart

    I called about a car I had seen
    The advert read as though it had everything I wanted
    I called and asked some questions
    Negotiated a price and the dealer said i could come up and collect would have to pay deposit
    I paid deposit over phone using my husbands card as mine had expired and new one not come through
    I hadn’t seen car
    I then reread ad called back as wasn’t convinced about Bluetooth
    There was a photo that made it look like was Bluetooth but it wasn’t mentioned in description
    I was told yes he was sure it had it and would double check
    This was 10 mins after my initial call
    I said it had to have it or I didn’t want car

    They said would call back

    He called back 30 mins later said no it doesn’t
    I said wanted to cancel it then
    He said no can’t have deposit back
    I said about distance selling and he said no
    He had marked it as sold – it was literally 10 mins

    After much calling I spoke to director that evening who offered £220 (deposit was £440) this was if I didn’t go to trading standards
    I said no

    I have asked bank to stop payment they won’t

    I called consumer helpline and they told me to write to them
    I have sent letter advising I want a refund under distance selling cancellation
    But they haven’t replied

    • Hi Marie. Yes, you are entitled to your deposit back in full. For more information, read our article about buying a car then changing your mind.

      Unfortunately, the dealer in this case seems to think that he doesn’t have to co-operate. I suggest visiting the excellent forum at legalbeagles.info, as a legal expert there may be able to give you some advice. Failing that, you may need to get paid legal assistance to bring any action against the dealer – and he’s probably counting that you won’t bother.

  30. Hi Stuart. Hope you can help. I.paid a £300 deposit for a car the other day a local small car sales, they said that they would put the car through a new MOT, it was advertised as having one. Today the salesman called me to say that it failed due to needing too much work. I asked about a refund and was told to call to the garage as they couldn’t do it over the phone. Went after work to be told that the person who deals with the refunds has left and then they tried to sell me a new car. I said I wasn’t interested and wanted the refund to be told to call in tomorrow. Do I have grounds for a refund please?

    • Hi Michael. Yes, absolutely. If the dealer cannot complete the contract, you are entitled to your deposit back. If you are clear (without being rude), they shouldn’t fight you too hard on this as they are the ones in breach of the contract.

  31. Hi Stuart, on Sunday I saw an advert for a car, phoned the dealer and gave a £250 reservation payment on my credit card to “hold” the car till I could travel to see it. The dealer said that in the mean time he would get the car mot’d and ready to go should I want to drive it away. On checking the ad and other information and consequently recontacting the dealer I have found that although described as having a sat nav, it doesn’t, that it’s failed it’s mot and that there’s outstanding finance on the vehicle taken out a couple of days before it went on sale plus I’ve not been able to contact the dealer since. Not surprisingly, I don’t have a good feeling about this, could I get my money back, thanks Simon

    • Hi Simon. If the car is not as advertised (satnav), then it’s pretty simple and you should be able to get your money back without hassle. Doesn’t mean that the dealer will play along happily, though…

      The MOT failure isn’t a reason to cancel the purchase if the failures are repaired before delivery. A car can fail its MOT for very minor reasons, so you should ask to see the MOT failure report and judge for yourself that the fix is acceptable. For example, if the car failed its MOT because of a worn tyre, you should insist that the dealer fits a new tyre that matches the other three rather than fitting a used tyre that doesn’t match. It’s still legal, but you should expect better.

      The finance issue is almost certainly dealer finance. Very few car dealers own their stock outright as they don’t have the cash, so all of their cars are under finance from specialist providers. This is perfectly normal, but you should still double-check that and ensure that the vehicle data is updated ASAP to show that the finance company no longer has any interest in the vehicle.

  32. Help please, I’ve put a deposit down on a car at a well known dealers but unable to go through with sale as have been poorly and have to wait for a reply from dvla to clarify whether I can drive or not. Have I lost deposit?

  33. Hi Stuart, I paid a 2k deposit on a car at an Audi dealership in person today without seriously considering my financial situation, in other words I’ve bought it on a whim and now I’m having doubts about actually going through with the purchase. I only signed a credit check agreement form and all I was given was a cash receipt form. I haven’t signed any HP agreements or anything. Am I likely to get the deposit refunded if I tell them my financial status isn’t as healthy as I thought it was?

    • Hi Rob. If your finance application is rejected then you should get your deposit back without any hassle. If the application is accepted but you choose to cancel, you’ll probably lose your deposit.

  34. Hi Stuart,

    We left a £250 deposit on a used car and was told that the dealer would touch in the scratches and stone chips. When we went to collect the car on the agreed date, the work was of a poor standard. The sales person admitted it looked worse than before and advised they would rectify it. Unfortunately I have lost faith in the dealership and no longer want the vehicle. I asked for our deposit back but they’ve refused. Am I likely to get the full refund back if they have breached the contract by not having the car ready on the agreed date?

    • Hi Olivia. It would depend on the dealership agreeing that they have breached the contract, and it’s a difficult argument for you to win. The contract presumably does not specify the standard of repair required, so the dealer can argue that the contract has not been breached.

  35. Hi Stuart

    I have paid £300 deposit for my PCP agreement, I have signed all the documents etc. but the car was in different branch, around 40 miles away. They have told me that it will take them around 2/3 days to deliver and than I would complete the purchase. Unfortunately after a week and little communication from their side I called and ask about the car which still was not assigned to be transferred. I have told them that I want to cancel my order. Moreover I have asked to get my money back and they said it will not be a problem. It was almost two months ago and I still didn’t get my money back. Am i entitled to get my money back?
    Oh, and I got the call next day and they have told me that the car is ready for collection. Again I told them that I dont want it and I just want my money back.

    • Hi Mike. Legally, they probably don’t have to refund your money. The T&Cs on your vehicle contract probably makes reference to you being able to cancel if the dealer cannot deliver within 28 days of the indicated delivery date, so a week’s delay isn’t enough to trigger that.
      If you complain to the sales manager or dealer principal, you may eventually get a refund and an apology. But you probably can’t demand it from a legal point of view.

What are your thoughts? Let us know below.