March 15, 2016
Dealer won't refund my deposit
Dear Consumer Ed:
I paid a car dealer $300 as a deposit to confirm that I was interested in buying a particular car. He assured me that the car had a clean title and had not been in any accidents. He also assured me that he would return my deposit if I found any problems with the car. I got the VIN number from him and found out from CARFAX that the car had been in an accident. I showed the CARFAX report to the dealer and asked him for my deposit back, but he refused to return it. What can I do?
Consumer Ed says:
While many consumers are under the impression that there is a law which entitles them to a refund for a car deposit if they choose not to buy the car, this is not the case. Usually, whether a deposit is refundable or non-refundable depends on what's written in a contract, on a receipt, or posted at the dealership. But if there’s nothing that states otherwise, or if you agreed with the dealer that the funds would be returned in the event that the car had previously been in an accident, then the dealer should be required to refund the money. In this case, if you believe that the dealer has no right to keep your deposit, you have several options. The first thing you should do is write a letter to the dealer requesting that your money be returned. Send the letter via “Certified Mail, Return Receipt Requested,” and pay the small additional fee to obtain proof of delivery. You should also submit a complaint to the Better Business Bureau (www.bbb.org), and ask their mediation department to contact the dealer to attempt to get your deposit back. You can also submit a complaint to the Georgia Attorney General’s Consumer Protection Division by calling 404-651-8600 or 1-800-869-1123 (outside metro Atlanta). If you used a credit card to pay the deposit, you should also consider disputing the charge with your credit card company. Even if you take this route, the assistance of the Better Business Bureau and the Georgia Attorney General's Consumer Protection Division described above may still be helpful. If none of the above options result in the return of your deposit, you may want to consult with an attorney who can help you explore other legal options you may have. To avoid such issues in the future, and to help you avoid doing business with companies that use deceptive tactics, make sure you select a reputable auto dealer before you begin shopping for a car. You can research dealerships through the Better Business Bureau’s website (www.bbb.org). In addition, make sure that before you give a deposit to a dealer, you require that he or she create a written document stating the purpose of the payment, and under what circumstances, if any, you are entitled to a partial or full refund. Finally, make certain that you read that document carefully and in its entirety before you sign it or hand over any money for a deposit.