[Big Fred]

Have you guys ever heard of someone putting a deposit down to save a spot in line for a BMW i8 ($5,000) and then, if he changes his mind (or, in my case, I ended up buying an i8 from a guy who sold me his spot in line with another dealer), have the sales guy suggest that the deposit MIGHT NOT BE REFUNDABLE?

This issue has just arisen for me and I covet your comments.

Note: no actual car was ever ordered as my spot in line has not actually come up yet -- I'm just the next in line with this (original) dealer and he's thinking an allocation for an i8 may come up any day now. I'm worried sick about this!! I just want the deposit back because the dealership has spent no money, ordered me no car, and suffered no damages.

[Louv]

I've never heard of any Dealer (in the US) fail to give back a deposit.

I assume, when you gave him $5000, there was some kind of written agreement that went with it? Even an email is sufficient. But even a receipt, or a canceled check should be enough.

That said, I'm pretty sure that most dealers will not let you sell your place in line to someone else. They'll give you back your deposit, and the next person in line gets that allocation. Unless, of course, there was some written guarantee that you were allowed to do that.

[mystopolis]

You would have to sign paperwork stating that the deposit is non-refundable in the same manner when ordering. They shouldn't have any legal right to not refund it to you. Then again hopefully you had some receipt of what the deposit was for which would strengthen your argument why it should be refunded.

I would keep calling (or go in person) and asking for the manager every day for a week or so hopefully breaking him down to refund it back. Otherwise this should be something easy for a lawer to fix.

[MalibuBimmer]

If the purpose of a deposit is to reserve a place in line (essentially an option) why would it be refundable? I realize it would be applied to the price of the car, but that's what a deposit is for -- to reserve your place.

Of course, most dealers will give you back your deposit. But it depends precisely on the nature of the transaction and what was written between customer and dealer. If there is no writing and no oral understanding, the parties would revert to the Uniform Commercial Code. (E.g., Does the deposit create a firm offer obligating the dealer to sell? U.C.C. sec. 2-105.)

Getting answers from a bunch of anonymous, well-meaning posters on a public Internet board will usually get you the answer you want to hear, because everyone is sympathetic. But the answer you want to hear is often wrong.

Sorry to bring you and all the posters here back to reality. You may carry on now.

[Epirali]

Originally Posted by MalibuBimmer

If the purpose of a deposit is to reserve a place in line (essentially an option) why would it be refundable? I realize it would be applied to the price of the car, but that's what a deposit is for -- to reserve your place.

Of course, most dealers will give you back your deposit. But it depends precisely on the nature of the transaction and what was written between customer and dealer. If there is no writing and no oral understanding, the parties would revert to the Uniform Commercial Code. (E.g., Does the deposit create a firm offer obligating the dealer to sell? U.C.C. sec. 2-105.)

Getting answers from a bunch of anonymous, well-meaning posters on a public Internet board will usually get you the answer you want to hear, because everyone is sympathetic. But the answer you want to hear is often wrong.

Sorry to bring you and all the posters here back to reality. You may carry on now.

Actually UNTIL you have a written sales agreement on a specific car I believe you are not correct. A deposit to hold a car may also be covered by various state laws.

You can also refuse a car on delivery if something is not up to par.

[ericsi]

In the uk, your deposit is fully refundible unless the car has gone into production. Simples, i extensively discussed this with the dealer.

[JasH]

Originally Posted by ericsi

In the uk, your deposit is fully refundible unless the car has gone into production.

Agreed, true

But sadly, OP is not in the UK.

[Carac]

I've been told by many dealers in many states that they can't hold a deposit. I've offered to put a refundable deposit on a couple cars and was flatly refused. They put my name on the list and said they can't legally keep a deposit anyway, so making a established customer put money down would be pointless.

[MalibuBimmer]

Originally Posted by Epirali

Actually UNTIL you have a written sales agreement on a specific car I believe you are not correct. A deposit to hold a car may also be covered by various state laws.

You can also refuse a car on delivery if something is not up to par.

Upon what is your belief based? Mine is based on a reading of applicable provisions of the UCC and my general knowledge of contract law.

[Epirali]

Originally Posted by MalibuBimmer

Upon what is your belief based? Mine is based on a reading of applicable provisions of the UCC and my general knowledge of contract law.

What part of contract law states a deposit is non refundable by default for a non specific item unless an agreement says something else? Serious question.are you saying if a dealer can not deliver item for 50 years the deposit is forfeit?

If I go to a dealer and the front half of the car is missing you are claiming I am still obligated to finish the transaction although the dealer has not met the condition of sale?

I understand ONCE I have placed a specific order it may not be refundable but what you say goes against everything I know. Every car I have held has been with refundable deposit UNTIL contract signing. Only exception have been stated as an explicit condition (like some Tesla preorders).

In Maryland verbal contracts are valid, so if the dealer says "this deposit is non refundable" that would be a condition I have agreed to. If not stated what part of contract law gives the dealers interpretation force?

[MalibuBimmer]

I'll ignore the examples that don't reflect the situation presented here.

The purpose of a deposit is to buy a place in line for a car. When the dealer is able to deliver that car, your deposit has served its purpose and the dealer has earned the deposit. I don't understand why that's so difficult to understand.

The fact that many -- if not most -- dealers will as a matter of good will waive their right to keep the deposit doesn't mean they are obligated to do so. It was my understanding that the original poster was asking what the dealer could legally do.

Think of another large purchase -- a home. There's a good faith deposit put down there, too. If you decide to back out because you've found another house or just decide not to proceed, you know what happens to that deposit. Same is true here.

[Epirali]

Originally Posted by MalibuBimmer

I'll ignore the examples that don't reflect the situation presented here.

The purpose of a deposit is to buy a place in line for a car. When the dealer is able to deliver that car, your deposit has served its purpose and the dealer has earned the deposit. I don't understand why that's so difficult to understand.

The fact that many -- if not most -- dealers will as a matter of good will waive their right to keep the deposit doesn't mean they are obligated to do so. It was my understanding that the original poster was asking what the dealer could legally do.

Think of another large purchase -- a home. There's a good faith deposit put down there, too. If you decide to back out because you've found another house or just decide not to proceed, you know what happens to that deposit. Same is true here.

Let's simplify this: where is the contract, written or oral, on a deposit? The home example has a written contract with specific conditions. When I hand the dealer $10k for a SPOT in their allocation (not $10k for a SPECIFIC car) without any written document or final sale contract how am I obligated?

[MalibuBimmer]

Yeah, you're right. How foolish of me. There's no contract when you hand $5000 to a dealer to reserve a spot for you for an automobile that is in high demand. In fact, handing over the $5000 is just to show that you can hand over a check for $5000.

[Epirali]

Originally Posted by MalibuBimmer

Yeah, you're right. How foolish of me. There's no contract when you hand $5000 to a dealer to reserve a spot for you for an automobile that is in high demand. In fact, handing over the $5000 is just to show that you can hand over a check for $5000.

Listen if you are not interested in a civil conversation we don't have to have one. I am trying to explore the idea, but I am not sure what the point of this reply is.

I am not a lawyer, but I do a lot of contracts because of what I do. I always defer to lawyers knowledge, but I have also won a lot of conflicted items that I was told by lawyers to be "just the way it is."

This is a fight I am pretty confident I could win with any dealer UNLESS I had agreed it was non refundable OR signed a specific contract of sales.

[MalibuBimmer]

Good luck. I'm done.

[Epirali]

Originally Posted by MalibuBimmer

Good luck. I'm done.

Agreed.

[kip1]

Sorry guys,no offense, but I have to agree with MalibuBimmer. No way I would get my deposit back unless there is a specific equipment that cannot ne retrofitted missing on the car.

I also understand a deposit to be money that you lose if you back out of a deal:

"a sum payable as a first instalment on the purchase of something or as a pledge for a contract, the balance being payable later.
"we've saved enough for a deposit on a house""

[Epirali]

Originally Posted by kip1

Sorry guys,no offense, but I have to agree with MalibuBimmer. No way I would get my deposit back unless there is a specific equipment that cannot ne retrofitted missing on the car.

I also understand a deposit to be money that you lose if you back out of a deal...

Nothing offensive we were trying to have a civil conversation. But I am curious: are you talking about on delivery or if you are just holding a reservation spot?

I have actually not taken delivery before on a car because of cosmetic damage. I guess I am lucky.

[Epirali]

So here is one interesting read I found. In my case I did not sign any paperwork that stated deposit was non refundable, and I had verbal and email communication that it was.

http://www.consumerlawgroup.com/blog...-deposit.shtml

[kip1]

Originally Posted by Epirali

Nothing offensive we were trying to have a civil conversation. But I am curious: are you talking about on delivery or if you are just holding a reservation spot?

I have actually not taken delivery before on a car because of cosmetic damage. I guess I am lucky.

I have no idea what holding a reservation spot means. In Germany and Finland you order the car, pay a deposit and the car comes after a few months. If you cancel or dont take the car you lose the deposit and up to 10% of the cars price.

EDIT: and it is clearly said in the contract...

[Epirali]

Originally Posted by kip1

I have no idea what holding a reservation spot means. In Germany and Finland you order the car, pay a deposit and the car comes after a few months. If you cancel or dont take the car you lose the deposit and up to 10% of the cars price.

EDIT: and it is clearly said in the contract...

Thanks that makes perfect sense. The contract is explicit. In my case it was just a reservation for a spot, with only condition was sake at MSRP depending on final configuration and pricing by manufacturer. Sounds like yours was an actual sales order, and I assume you specified options, features, and had an end date by which car would be delivered?

[ddk632]

I had a deposit down for an i8 and gave up my slot (after the car was built and delivered to the dealer, in fact) due to circumstances. My deposit was refunded to me.

I had a deposit contract (one page) which did not state anything regarding the deposit being refundable or not. It was essentially just a receipt.

The laws are going to vary state by state, but if just talking to the dealer GM about it doesn't have them budge and refund the deposit, I would consult an attorney specializing in such matters as to what your rights are.

Technically speaking a deposit is for the option (first right of refusal) to purchase a vehicle. If that option is not exercised, it makes sense the deposit should be refundable.

Again, there are likely some sort of laws about it and often filing a lawsuit will get them to settle and just hand over the money, unless the law is clearly on their side.

I will also add that the particular dealer I was working with are a classy place, top-notch folks, who do not BS and are not criminals. Can't say that for all dealers. Your mileage may vary