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Ben Jones
Ben Jones, UK Lawyer
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I have just been to a car dealership and put down a £500 deposit

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I have just been to a car dealership and put down a £500 deposit on a car. The deal is for PCP and i gave them my bank/employer details for the credit agreement check with Barclays. They were busy and they said they would send the order form in the post. They actually sent it via email a few hours later. I have now changed my mind and not wanting to go ahead. The point is I haven't signed an order form (just had it emailed to me) or signed any finance agreement. Can i legally cancel and get my deposit back?
Hello, my name is***** am a solicitor on this site and it is my pleasure to assist you with your question today.
Generally, when a person places an order for something and pays a deposit they enter into a legally enforceable contract with the seller. It is implied that the seller has accepted the deposit as security and as proof that the buyer wants to proceed with the contract. You may not have signed anything for the finance but you have still signified your willingness to purchase the car, hence why the deposit was paid.
Unless the seller subsequently commits a serious breach of contract, or there was a cancellation clause, the buyer would have no legal right to cancel the agreement and if they do so they will be acting in breach of contract and risk losing their deposit.
However, If this was a business seller, they will be subject to certain consumer rules and regulations. For example, you will have some protection under Schedule 2, Regulation 1(d) of the Unfair Terms in Consumer Contracts Regulations 1999. It states that if the contract has been cancelled after a deposit has been placed you are entitled to have the deposit returned in full, unless the seller has spent time, effort and money, in which case they can deduct reasonable expenses. Even if some expenses have been incurred, if these are subsequently recovered, for example by selling the item to someone else, the deposit should still be returned in full. It follows that a blanket non-refundable clause that entitles the seller to keep the deposit in all circumstances is most likely going to be unfair and unlawful.
If you are having difficulties in recovering the deposit when you believe you are entitled to have it returned, advise the seller that you will not hesitate reporting them to the Office of Fair Trading and, if necessary, pursue the matter further through the county court. Exerting such pressure could often work in changing the seller's position in this matter.
I trust this has answered your query. I would be grateful if you could please take a second to leave a positive rating (selecting 3, 4 or 5 starts at the top of the page). If for any reason you are unhappy with my response or if you need me to clarify anything before you go - please get back to me on here and I will assist further as best as I can. Thank you
Customer: replied 2 years ago.

The car was from a dealership not a private seller. So in theory I can inform them of my intent to not go ahead and then negotiate how much deposit they are willing to return (if any) depending on how much time they have invested from their end. Either way I can decide not to go ahead and get my deposit back or not get it back but without any further legal issues?

At this early stage it is very unlikely they would have incurred major expenses and the worst is that they would keep the full deposit, although as mentioned you still have a right to try and get some or all of it back, depending on what losses they have incurred. But you cannot be forced to take the car or go ahead with the purchase. Hope this clarifies?
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Customer: replied 2 years ago.


You are welcome all the best