Protocol on deposit for car purchase?

[Shaun @ Tru6]

Originally Posted by greglepore

Best answer in the thread.

So what did you do?

Totally disagree.

Why take on this guy's baggage and make yourself less of a person? I don't get the vindictive theme running through this thread.

[MRM]

It's easy to tell what happened in this situation. Old Guy wanted to buy a new car. Wife gives him permission. Old Guy negotiates with Motion, comes to an agreement and puts up the deposit to hold the car. Wife gets cold feet and tells husband it's too much money for them and to pull out of the deal. Old Guy is now caught between his wife who is blaming Old Guy for going out of pocket the $1,000 and Motion who is holding the deposit. Old Guy is doing the best he can to justify backing out to Motion and seized upon color as the best pretext for backing out of the deal.

Have mercy on the guy and give him back the $1,000 deposit. His wife has already taken that much value out of his hide.

[Crowbob]

Are we sure there even is a wife?

[stomachmonkey]

Originally Posted by NotaBRG

Are we sure this isn't a scam?

Guy puts $1000 deposit on car through PayPal.
Backs out and gets big hearted sap (no offense intended ) to refund his money.
Original $1000 either never really was in PayPal or gets pulled.
Big hearted sap is now out $1000.

According to Richard funds were sent as Friends and Family cash.

No way to pull that back.

[pwd72s]

Originally Posted by MRM

It's easy to tell what happened in this situation. Old Guy wanted to buy a new car. Wife gives him permission. Old Guy negotiates with Motion, comes to an agreement and puts up the deposit to hold the car. Wife gets cold feet and tells husband it's too much money for them and to pull out of the deal. Old Guy is now caught between his wife who is blaming Old Guy for going out of pocket the $1,000 and Motion who is holding the deposit. Old Guy is doing the best he can to justify backing out to Motion and seized upon color as the best pretext for backing out of the deal.

Have mercy on the guy and give him back the $1,000 deposit. His wife has already taken that much value out of his hide.

My thinking exactly...Besides, Motion still has the car, should have no problem selling one this nice...

[motion]

The guy has dropped out of sight; no contact from him in 3 days. He made one feeble attempt at asking for his deposit back 3 days ago and seems to have dropped it. I will return all or most of it, depending on how long it takes me to undo the damage. Thanks for all the commentary

[speeder]

That sounds fair. This thread has reminded me of some odd experiences w deposits on vehicles. When I was selling my first diesel PU truck back in about 2008, I had a father and son come to look at it. It was a really good truck, I had bought it w a bad motor and rebuilt it from the crank out w full documentation, including a thread here.

They were nice guys and as solid as they come. They installed pools for a living up in Ojai where they lived, they showed up in the dad's new F-250 diesel. The son was a big guy, probably 6'2" and 220 but he looked small next to the dad, who looked like a retired NFL lineman. I let them take the truck for a test drive by themselves while I waited with his new truck. They came back 10 minutes later and told me that they wanted it.

It was a weekend and they needed to come back on Monday w the cash, ($15k?, can't remember), so the dad handed me $500 cash to hold it and not show it to others. No receipt, just a handshake and we had a deal.

Monday came and went, no word from them. In fact, I never heard from them again. I actually got really worried and scoured the news plus even called the CHP, I was starting to think they had a bad accident on the way home. I did not try to sell the truck to someone else for quite a while.

The CHP had no reports of a bad accident w a father and son in Santa Paula or any of the roads back to Ojai. I left a few messages on the cell number they called me from but never got a call back. I really think they found another truck they liked better and just didn't want to ask for the $$ back after shaking on a deal. I was completely willing to refund it, I don't like deposits and had no worries about selling the truck.

That was a weird one.

[RKDinOKC]

I put any downpayment in a car contract that accepts the downpayment as non-refundable and balance due for sale of car. Both parties sign the contract before any money exchanges hands. The contract also sets the sales date and price of the car.

Link to PDF of car sales contract

Just because it's in the contract doesn't mean I require it. But sometimes it makes the buyer feel more comfortable.

[javadog]

That contract could be a little more explicit about the deposit being non-refundable. In any case, this point should be mentioned by the seller and acknowledged by the buyer at the time that the contract is made. Seller often gloss over this, out of fear that they will kill the deal.

As for Motion's old man, just because he's been quiet does not mean he's not going to toss a turd into Motion's punch bowl. These sorts of guys have a habit of coming back, like a herpes outbreak.

JR

[javadog]

By the way, PayPal does not ordinarily involve themselves in disputes over vehicle sales. That will not stop them from investigating a claim and the first step in that is often freezing or reversing funds. It's not a bad idea to have two bank accounts, one tied to PayPal and the other not, and you ought to transfer any PayPal funds from one to the other, upon receipt.

Better yet, don't use PayPal for big transactions. I won't use PayPal for the sake of anything with a title.

JR

[greglepore]

@ Shaun-I get where you're coming from, and if the car sells again w/ no hassle, sure...but there is the hassle factor. Probably 2 or 3 hrs spent, and 3 sales missed. And if the car now (legitimately) sells for something less, then Richard lost the benefit of the bargain.

My take is either poop or get off the pot. If you're going to buy something, buy it. If you want the seller to take a vehicle or house or whatever off the the market while you talk to your wife or contemplate your navel, then ask for that, don't "buy" it by leaving a deposit and expecting it back-that's somewhat disingenuous.

But hey, reasonable minds can differ. I just thought that Gogar's solution was an appropriate middle ground-if no harm, no foul.

[sugarwood]

Originally Posted by Shaun @ Tru6

I don't get the vindictive theme running through this thread.

It's not so much vindictive as much as it's just adherence to logic.

What is the point of a deposit?
You are paying someone a reservation fee.
If you can get it back, then what's the incentive for the seller? None.
He can just hold the car for you with no deposit.
In fact, it's the exact same thing.

The vindictive theme is that the a refundable deposit transaction has no logical merit.
Just ask the seller to please not sell the car while you get the money, and then do a pinky shake or something.
Having him hold some money makes no sense. Why not have him hold your pet dog for a few days?

The point of a deposit transaction is that you are paying the seller to take his goods off the market.
In exchange for that, you are risking your deposit.
If you follow up, you get your money back, as it's applied to the sale.
If you back out, the deposit is the price you paid for the exclusive reservation.

In finance, this is called an option. And guess what, you pay for it!
And you don't get your premium back if you decide not to exercise the option.

Personally, I've never given or taken a deposit on a car in my life.

Do you put a deposit down on a loaf of bread?
No, you go to the store and buy it in full.

Deposits makes zero sense to me, and seem to be some insane anachronism from some other century where obtaining currency required horseback travel.

Deposit only makes sense in the scenario here (buyer gets a free call option with no premium, and can reserve cars at will, and decide if they are a good deal later.
Shoot first, think later. All at the seller's opportunity cost)

If I was ever offered a deposit on a car I was selling, I would simply tell the person,
"To buy something, you need all the money. Come back when you have all the money"

[motion]

I think the basic take away from this and other experiences with deposits, is that the purpose of the deposit serves to prevent the sale to another party. There needs to be some teeth behind that. I upheld my end of the deal and did not sell the car to anyone else. He needs to uphold his end of the deal. He did not. No apologies were given. Rather, he went on the offense and accused me of misrepresenting the color of the car.

[javadog]

Clearly, he's an idiot. Nothing new here, that describes most of the country, present company excluded.

Did you ever discuss the deposit being non-refundable? In actual words...

JR

[pwd72s]

Since it was a dealer trade deal when I bought the then new Mustang, I gave them a $2,000 deposit. But it was refundable pending my inspection. Had that in writing. When the car arrived, it was as promised, so I paid the balance due.

[speeder]

Originally Posted by pwd72s

Since it was a dealer trade deal when I bought the then new Mustang, I gave them a $2,000 deposit. But it was refundable pending my inspection. Had that in writing. When the car arrived, it was as promised, so I paid the balance due.

Buying a new car from a dealer is a completely different thing than this scenario. For starters, they cannot legally keep deposits if you do not buy the car. At least in CA., where the people in this OP live. Dealers sell hundreds of cars and actually have people calling them and walking in their door every day looking to buy the car you put a deposit on.

I can't believe that you don't understand the distinction. Or what was your point?

[Shaun @ Tru6]

Greg, I understand where you are coming from too. My expectation upfront in selling a car is that hassle is part of the experience and that people are idiots. If you re lucky to get a smooth transaction, that's just gravy. I have been extremely, knock on wood, lucky in selling cars, but I never expect it. Sort of like underpromise and overdeliver: If your expectations are low, you can only be pleasantly surprised.

I honestly just don't ever want to put myself in the position of punishing someone for bad behavior, especially if the effect on me is negligible, and I put backing out on a car purchase in that category. Even going past negligible, harboring negative feelings like retribution is just bad for the soul, and karma. Getting back at people is just not my thing, don't get it.

Originally Posted by greglepore

@ Shaun-I get where you're coming from, and if the car sells again w/ no hassle, sure...but there is the hassle factor. Probably 2 or 3 hrs spent, and 3 sales missed. And if the car now (legitimately) sells for something less, then Richard lost the benefit of the bargain.

My take is either poop or get off the pot. If you're going to buy something, buy it. If you want the seller to take a vehicle or house or whatever off the the market while you talk to your wife or contemplate your navel, then ask for that, don't "buy" it by leaving a deposit and expecting it back-that's somewhat disingenuous.

But hey, reasonable minds can differ. I just thought that Gogar's solution was an appropriate middle ground-if no harm, no foul.

[recycled sixtie]

To avoid misunderstandings and hard feelings it would make sense if there was any question about refund of the deposit then it should be in writing. Then in the case of the seller he can keep the deposit without the prospective buyer coming back at him. The bottom line most of the guys on this forum are gentlemen and would refund the deposit if the sale did not go through. Likely many of us are not detailed enough about refund of deposits and would do the gentlemanly thing. To me if I was the seller I would hand the deposit back if the sale did not go through. If you have a good vehicle it is going to sell anyway eventually.

[Shadetree930]

Originally Posted by cabmando

You keep the deposit... period.

Agree. That is the way a deposit works.

[cabmandone]

Originally Posted by recycled sixtie

If you have a good vehicle it is going to sell anyway eventually.

I agree completely. The issue is that a buyer gave you a deposit to hold the item so that they could complete the purchase. You are now out time that could have been used to sell the car to another buyer because the buyer got cold feet. I have had buyers get upset with me for not accepting deposits and explaining that if they want the machine the only way to secure it is to make full payment. I stopped holding machines for people on their word and by deposit because I have come to the realization that neither mean much in the world we live in. What's the point of taking a deposit if you're going to give it back? When I did take deposits I'd send them a full description of the machine along with high resolution pictures of it. I would explain that they would have to prove a defect or omission in order to receive a refund.