Deposit: Should they cash it or hold it?

[nikkiusaf]

I have put in orders at four dealers- some with a $500 deposit and one with a $1000 deposit. Before writing a check, I asked if this deposit is refundable. Every dealer said it will be refunded if I do not buy a car from them (which will happen with three dealers, of course.) They ALSO said they would HOLD THE CHECKS until the car came. This is good because otherwise I'd be actually throwing thousands of dollars around, y'know?

Well, three of those dealers have CASHED my checks.

Has this been others' experience? Will these checks be refunded or am I out $2000? And if they renege and say "the deposit is non-refundable," which they certainly can (read: will) say since I didn't get the agreement in writing, what would be my course of action?

Ever pessimistic,
NIKKI

[Ken Cooper]

On asking my salesperson the same question regarding return of deposit, I was told that consumer protection law requires that the refunds be returned by the dealerships.

When I ordered my car in November, my dealer cashed my $1000 deposit (received the car in March). I asked on this forum if this was the norm. Virtually everybody answered then that their deposits were $500 and that their deposits were NOT cashed by the dealerships.

You might want to check with the BBB to see what their expectations are with regard to cashing deposit checks, especially with the very long waiting periods these days. I was about to do that myself but I didn't want to do anything that could possibly screw up my order.

[jchu]

Walser Toyota who treated us quite well during our first Prius purchase in March (their TRAC car) never asked for a deposit. With our second Prius order, this one new, told $500 deposit, guaranteed MSRP, 12-18 month wait, and they did cash the deposit. However, they have been otherwise so good to deal with so far, we haven't complained.

Jon

[tag]

My dealer required $1000 up front. I used a credit card which they immediately tapped. They did, however, indicate that my deposit was refundable. I'm certainly glad it never came to that because the sales order indicated otherwise.

[DicksieLee]

I had visited two dealerships in trying to buy a Prius. At one, I used a $1000 credit card charge as a deposit. When it became clear that I needed to explore other options, I returned to that dealership and had them specifically write on my sales agreement that the deposit was "fully refundable". Having obtained that, I went to a second dealership and gave them a $1000 check as a deposit. They told me they would not cash it, and they did not. I would be wary of a dealership that did not call you to tell you that they were, indeed, cashing your check. I bought from the dealership who held my check, and received a full refund from the one who charged my credit card.

[shocker]

My dealer stated that the 1000 deposit was refundable but the sales slip stated that it wasn't so I made them change that before I left the dealership. They stated to me that they would "hold" my deposit until they had a car. They immediately cashed my deposit. I was going to make a stink but as I was weighing the pros and cons a car arrived and I took ownership.

[daniel]

I paid my $500 deposit by credit card, which was charged to my account immediately, and then deducted from the amount due when I took possession of the car. All I got was a receipt saying that I had given them the $500. No mention of whether it was refundable or not.

It is perfectly legitimate for a dealer to cash the check. But if he told you he would not cash it, and then did cash it, he has committed a breach of promise, which may be actionable in court.

Legally, they are bound by their promise to refund the deposit. If they deny having made such a promise, you could get other people to testify they were told the same thing. If you establish a pattern, that they always told people the deposits were refundable, you have a good case.

[Danny]

Welcome back, Daniel - how was vacation?

[TonyPSchaefer]

I could understand that the dealer would immediately hit the credit card. After all, their intent is to financially tie us to our order and separate us from the people who aren't really serious. When I put my deposit on my Discover card, he ran it through on the spot and I got cash back.

On a later visit, I asked out of curiosity how I was doing on the list. The guy pulled file folders out of the "Prius" drawer and there were credit card receipts and uncashed checks paper clipped to the respective folders. I think I would be ticked if they promised to not cash the check and then turned around and cashed it.

I actually signed a purchase order priced "at current MSRP at time of delivery" and a special note that the $500 was put down and fully refundable upon request and removal from the waiting list. Though I did have to ask for the latter to be written. This was not anticipating that I would lose interest in the Prius, but in case of an accident or break-down requiring immediate car purchase. Ambitious salesman, though, said that I could apply that down-payment to any car purchased from them; the Scion tC looks fun.

All this, by the way, has been with Libertyville Toyota in Libertyville, IL a Northern suburb of Chicago. I have been very pleased with the service I've received, from all the salespeople I've ever spoken with. They even let me come in every other month or so and "test drive" their showroom Prius just to let me get my fix from time to time. When I get good service, I try to spread the word.