Hefty deposit?

  cara 21:56 16 Feb 2004

Okay, not strictly computer related, (I am talking about purchasing a car), but forgive me and pretend its a computer.

I am buying this (car) from a dealer. It will cost around £12,000. Amongst other things I am selling some shares which is underway, but it will be into next week before the cheque is cleared I think. Meanwhile, the dealer, unless the (car) is picked up this week, requires a £1000 holding fee. Less the £200 deposit we have already paid.

Is this the norm, to request such a large deposit? I am very reluctant to pay this upfront with nothing to show for it.

Any comments welcome. Again sorry for the slight departure from topic, but I guess it could apply to someone buying a computer!

  Starfox 22:17 16 Feb 2004

Or to be more precise they're frightened of you going elsewhere and them loosing the sale.
If it's a very good deal and you don't think you can better it elsewhere then you may consider that you would like to pay it.
Personnaly I would tell them that it's not something you are prepared to do and see what they say.
Regards Starfox

  Starfox 22:19 16 Feb 2004

Sorry,that should read can't better it

  spuds 22:29 16 Feb 2004

You have paid a £200 deposit, and that should be sufficient for them to hold the car for a couple of weeks, I would have thought.Have another word with them, suggesting that you will take your trade elsewhere, if they insist on a 'holding'fee.Is the car really that important for you to try and raise one twelth of the cars value for 'storage'. When people start asking me for large possibly non-refundable deposits, I start to get a little concerned.

  cara 22:33 16 Feb 2004

Thanks. I am just aware that business can go broke overnight and I wonder why he is so determined on such a large deposit?

  cara 22:41 16 Feb 2004

Following on from my other thread - I was hoping that I could get special clearance on the cheque and convert it into a Bankers draft in a day. Barclays seem to think not? Am I misinformed?

  Forum Editor 23:16 16 Feb 2004

Banks will normally take two days to do a special clearance on a cheque, and they'll make a charge for the service. Once the funds are cleared into your account you can get a bankers' draft on demand over the counter.

My own advice is similar to the others - I can see no good reason why a car dealer should need such a large sum of money - you've signalled your intention to purchase by paying £200, so let him /them wait for the rest. They may well try to frighten you by saying they'll sell to someone else in the meantime - to which my reply would be "go ahead, and give me my £200 back right now - there are plenty of other cars for sale".

  cara 23:27 16 Feb 2004


All good advice. Back onto Barclays tomorrow I think!

Never knew buying a car could be so stressful.

  helmetshine 02:15 17 Feb 2004

I've worked as a car salesman for many years and can see the other side of this arguement.I've lost count of the number of times customers have ordered a vehicle,signed an order and left a deposit..the dealer removes the car from sale....a day or two before it's due to be picked up the customer phones and just cancels.Now there's no saying that the dealer WOULD have sold that car to someone else but they MAY have done.So all the dealer has gained from the non sale is a car off sale for maybe 2 weeks and a non customer demanding their money back when,if it's a deal in which the dealer hasn't arranged finance they have no right to.
Thats why the dealer is asking for a larger deposit...so if you do still go shopping around,which you shouldn't as you have entered into a contract with this dealer,and find a cheaper car...you better make sure it's a least a £1000 cheaper because they will certainly try to keep your deposit
Maybe if customers always honoured their side of the contract dealers wouldn't ask for larger deposits...and i know not all dealers are angels but...trust me on this...for every bad dealer there's 100 bad customers
Moral of the story...do ALL your shopping around before you even think of putting pen to paper

  helmetshine 02:22 17 Feb 2004

Forgot to add....don't give him the extra money...he WILL hold it for the £200....if he doesn't then he wasn't worth buying a car off anyway

"...he WILL hold it for the £200"

Depending on the terms of the contract he will have to hold the car for £200.

The thing is this, the deposit that you have paid is "valuable consideration" and will suffice to create a legally binding contract between you and the dealer - neither of you can pull out of the deal without being liable to damages as a consequence.

Now, the actual terms of the contract may be a little vauge but unless it is in writing then it is going to be 6 of one and half a dozen of the other as to how long he said he will hold the car for. If it is usual practice in the trade to hold it for a week then you will have a battle to prove that it was a term of the contract that he holds it for longer.

On the other hand, the courts seem to be rather biased against car dealers (and estate agents and credit firms, but that is another issue) and will usually give effect to what the "reasonable" customer would expect.

Certainly a £1,000 deposit is not legally necessary as you have already paid the £200. If the £200 deposit has "expired" then there is no reason why another £200 would suffice (making a total of £400 to be taken of the final invoice amount).

Best to check the written reciept for your deposit to see what is says.

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