Can the Dealership Keep My Deposit?

A

ADL

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I went to a Honda dealership the other day to buy my first bike, I've done my research and decided I wanted to get a Honda CBR 250 and they were having a 1.9% interest financing offer. I went in to the dealership and told them I wanted to buy the bike and they showed me a financing plan on the computer and then asked me to pay a $250 deposit. Being unfamiliar with the process of buying a new vehicle from a dealer I decided to pay the deposit.

Then they took me to the sales managers office and sat me down to sign the papers and send in the financing application. The manager tried getting me to buy an extended warranty and I said I didn't think I'd need it, then he tried getting me to pay an extra $1300 for loan insurance. I thought that was an appalling price to pay for such a thing, yet he kept trying to argue with me about how it was in my best interest to do so. Because of this I was then starting to distrust him and was carefully reading the agreement I was signing and he scoffed at me for doing so.. The whole thing has sort of given me cold feet and I kind of regret signing the papers. If I get the bike though I'm sure it will all be worth it in the end. However, if I don't get approved for financing, can the dealership legally keep my deposit?
 
Read your copy of the agreement you signed. It should be in there. Generally, a deposit is supposed to be a promise to go through with the agreement. Changing your mind is fine, but forfeiting the deposit is sometimes considered the penalty.
 
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I'm not changing my mind though, I wanted to know if I don't get approved by Honda for financing can they keep it? If I do get approved then that's awesome and I get the bike, but if not am I SOL and out $250?

Only part I could find in the contract that pertains to the deposit is "If you keep any part of my Deposit you will provide me with a written calculation and a brief explanation of your damages".
 
What dealership was this? I've heard a few rather discouraging things about a certain one as of late...
 
Go in and tell them you can't get insurance.
Did you use cash or credit?

Ask for the Sales Manager - let them know you can't get insurance that you have a bad record

If still no refund, tell them you will contact OMVIC or they can refund your money.
It's up to you but you can always go in on a busy day such as Saturday morning and start talking really loud. STOP TRYING TO SCAM ME, RETURN MY MONEY...just be LOUD

or just cower and let them keep it.
 
You SHOULD ALWAYS write your own disclaimer on the contract subject to financing, subject to insurance, subject to parking in your building, subject to whatever you want FULL REFUND to be made or by x date.

Just write subject to whatever you want and FULL IMMEDIATE REFUND.
ALWAYS use a credit card for deposits.
 
Legally they can keep it or a portion to cover costs they've incurred IF you change your mind. Should you not get financing, insurance I've personally never heard of a dealership keeping your deposit. They may drag their feet about it but I don't think it's worth for them to piss off a client and then have them spread the story online...bad mojo that way.
 
IV. said:
You SHOULD ALWAYS write your own disclaimer on the contract subject to financing, subject to insurance, subject to parking in your building, subject to whatever you want FULL REFUND to be made or by x date.

Just write subject to whatever you want and FULL IMMEDIATE REFUND.
ALWAYS use a credit card for deposits.
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Hmm, I wish I had known that before. I paid with debit, still have the receipt and all but I'm not sure if that will help.

I'm hoping they'll be nice about it and return my deposit if I'm denied financing, then I'd have to get a loan or something. Although I'm still hoping it will go through.

Thanks for the help guys, if I get the bike or not I'll let ya know!
 
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If your credit score if fine then you have nothing to worry about, but if it is less than good, you might be sol. Good luck and by the way when are they getting back to you? It does not take long for them to find out if you are approved or not. Usually just a couple of hours. Good luck though.
 
The dealership can keep some or all of your deposit, if they have incurred costs related to your deal. For instance, if they had a technician build/prep your vehicle, the vehicle detailed or readied for delivery to you, lein registrations or adminstration charges with the Ministry of Transportation, you are responsible for those costs. If they special ordered your machine, or bought it from another dealer at your request, you are in turn responsible for those costs as well. It can go beyond just your deposit. In most cases where the vehicle was at the dealership you were purchasing it from, you will get some of your deposit back.

Writing a fancy letter will not help, where you demand your deposit back in full - you signed on the bottom line, agreeing to a purchase, and you made consideration (the deposit) so you are contractually obligated to purhcase the vehicle. If anything, the dealership can pursue you to fullfill your part of the purchase contract, though most won't. Regarding a deposit via a Credit Card, it is fraudulent to contact your credit card to obtain a charge back for an unauthorised purchase (the only way to get the deposit back), and the fact that the dealer has not only your signature on the credit card slip, but a purchase agreement and a copy of your Identification futher will prove in favour of the dealer, and to your detriment if that method of payment and subsquent attempt to reverse the charge was made.

Ask nicely if you must to cancel the sale, and make up your mind quickly. The longer that goes on, the more the dealer goes out of pocket to prepare your vehicle for delivery.

Now, if you had done the contract, with it clearly written upon the face of the agreement, "conditional upon financing provided by Honda Canada at a rate of 1.9% interest" and the dealer representative (sales or business manager) signing beside the condition and yours as well, then this would be a completely different discussion.

As for all the extra stuff the dealer was trying to sell you, they make massive commissions from the sale of these insurances, extended warranties, add-ons etc, and it is very common for a dealer to try and hard sell (aggressively sell) these extra products.
 
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IV. said:
It's up to you but you can always go in on a busy day such as Saturday morning and start talking really loud. STOP TRYING TO SCAM ME, RETURN MY MONEY...just be LOUD
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:laughing9:
 
Grimmy said:
The dealership can keep some or all of your deposit, if they have incurred costs related to your deal. For instance, if they had a technician build/prep your vehicle, the vehicle detailed or readied for delivery to you, lein registrations or adminstration charges with the Ministry of Transportation, you are responsible for those costs. If they special ordered your machine, or bought it from another dealer at your request, you are in turn responsible for those costs as well. It can go beyond just your deposit. In most cases where the vehicle was at the dealership you were purchasing it from, you will get some of your deposit back.

Writing a fancy letter will not help, where you demand your deposit back in full - you signed on the bottom line, agreeing to a purchase, and you made consideration (the deposit) so you are contractually obligated to purhcase the vehicle. If anything, the dealership can pursue you to fullfill your part of the purchase contract, though most won't. Regarding a deposit via a Credit Card, it is fraudulent to contact your credit card to obtain a charge back for an unauthorised purchase (the only way to get the deposit back), and the fact that the dealer has not only your signature on the credit card slip, but a purchase agreement and a copy of your Identification futher will prove in favour of the dealer, and to your detriment if that method of payment and subsquent attempt to reverse the charge was made.

Ask nicely if you must to cancel the sale, and make up your mind quickly. The longer that goes on, the more the dealer goes out of pocket to prepare your vehicle for delivery.

Now, if you had done the contract, with it clearly written upon the face of the agreement, "conditional upon financing provided by Honda Canada at a rate of 1.9% interest" and the dealer representative (sales or business manager) signing beside the condition and yours as well, then this would be a completely different discussion.

As for all the extra stuff the dealer was trying to sell you, they make massive commissions from the sale of these insurances, extended warranties, add-ons etc, and it is very common for a dealer to try and hard sell (aggressively sell) these extra products.
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This is the best summary so far, along with the added diclaimer noted by IV. Presumable the contract you signed has the out-the-door-cost and that's all you have to pay. The contract should have everything important to you noted and if some clause(s) are in conflict with the Terms and Conditions on the reverse on the sales contract then these have to be struck out and intialed off by the shop. If they won't do this up front, then you are on notice and it's then your choice to actually sign the agreement and give them a deposit by cr. card. If the sales rep makes you feel like an idiot if you don't opt for more then he's a fool as he likely won't get repeat business or a referral from you. If you've imtimidated by him bring a friend along next time for moral (not physical) support.

Also, and excuse me please for saying this, but with all the resources available on this and other boards I'd be doing a bit more up front research on buying my first bike and making what is presumably your first significant financial commitment with your hard earned cash.
 
You didn't mention if you fell for the $1300 loan insurance. That sounds like a BS charge to me, it adds more than 20% to the cost! You might as well buy the bike on your credit card. At least you could get some airmiles that way.

Warranty good by the way for the cbr250. I know I've gotten value out of mine many times over.

And what dealer is this? You have to rip out your calculator the whole time you are talking to them and make sure they know that you know what they are saying makes no sense.

ADL said:
I went to a Honda dealership the other day to buy my first bike, I've done my research and decided I wanted to get a Honda CBR 250 and they were having a 1.9% interest financing offer. I went in to the dealership and told them I wanted to buy the bike and they showed me a financing plan on the computer and then asked me to pay a $250 deposit. Being unfamiliar with the process of buying a new vehicle from a dealer I decided to pay the deposit.

Then they took me to the sales managers office and sat me down to sign the papers and send in the financing application. The manager tried getting me to buy an extended warranty and I said I didn't think I'd need it, then he tried getting me to pay an extra $1300 for loan insurance. I thought that was an appalling price to pay for such a thing, yet he kept trying to argue with me about how it was in my best interest to do so. Because of this I was then starting to distrust him and was carefully reading the agreement I was signing and he scoffed at me for doing so.. The whole thing has sort of given me cold feet and I kind of regret signing the papers. If I get the bike though I'm sure it will all be worth it in the end. However, if I don't get approved for financing, can the dealership legally keep my deposit?
Click to expand...
 
The job of the sales manager is to boost profit. They don't make that much on a bike but add ons can be 100% markups or more. Some adders are pure bogus. How many people keep a starter bike long enough to justify extended warrantees that aren't transferable?

My take would be to go in and say tear up the deposit and lets start all over again without the supersize me BS. Walk out if they don't agree. If you lose the $250 you might end up better off dealing elsewhere now that you have (Hopefully) got your head on straight.

If I'm reading this right you are dealing with scumballs. They will continue to be scumballs for service, warrantees etc. Every time you go in to their joint you will be asking yourself "How are they going to screw me this time". Biking should be fun. Save the "Watch your back" moments for traffic where you have no control.
 
I don't see ANYWHERE in the OP's post that the dealer is a 'scumball' or has done anything wrong.. of course they tried to up-sell on the extended warranty and inssurance - it's their job. It's up to the buyer to do his/her own research and decided whether or not to accept. I'm not saying I would have bought them, but you can't blame the dealer for trying. As for the deposit, he also doesn't say anywhere that they are trying to keep it.. it sounds like he is just worried he may not get approved for financing and didn't ask the right questions before signing.. In all likely hood, if HE tried to cancel the sale they would want to keep it, but if he made a fuss they probably still would give it back.. it's only 250 bucks.... IF he doesn't get approved.. they will likely call him very apologetic, offer his deposit back upfront, and tell him to please come back if he fixes his credit or finds another form of financing.

IF the OP gets denied for financing AND they then choose to be overly technical about their legal right to the deposit.. THEN that's another conversation.. but as of right now, the likely outcome is that they will give it back voluntarily and there is no reason to assume otherwise... to go into the dealer making a scene.. or to assume they are scumballs..
 
ADL said:
I went to a Honda dealership the other day to buy my first bike, I've done my research and decided I wanted to get a Honda CBR 250 and they were having a 1.9% interest financing offer. I went in to the dealership and told them I wanted to buy the bike and they showed me a financing plan on the computer and then asked me to pay a $250 deposit. Being unfamiliar with the process of buying a new vehicle from a dealer I decided to pay the deposit. Then they took me to the sales managers office and sat me down to sign the papers and send in the financing application. The manager tried getting me to buy an extended warranty and I said I didn't think I'd need it, then he tried getting me to pay an extra $1300 for loan insurance. I thought that was an appalling price to pay for such a thing, yet he kept trying to argue with me about how it was in my best interest to do so. Because of this I was then starting to distrust him and was carefully reading the agreement I was signing and he scoffed at me for doing so.. The whole thing has sort of given me cold feet and I kind of regret signing the papers. If I get the bike though I'm sure it will all be worth it in the end. However, if I don't get approved for financing, can the dealership legally keep my deposit?
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" Being unfamiliar with the process of buying a new vehicle from a dealer I decided to pay the deposit."

This is on you.

"yet he kept trying to argue with me about how it was in my best interest to do so."

This is on them. Total ripoff! If you were a risky loan, you wouldn't *get* the loan.

"was then starting to distrust him and was carefully reading the agreement I was signing and he scoffed at me for doing so"

This is on them.

"However, if I don't get approved for financing, can the dealership legally keep my deposit?"

As has been stated, write in your OWN additional conditions above where you sign your name and have him initial them. The most common condition on a sales contract is subject to financing. If this is a reputable dealer, they will ensure financing goes through before incurring ANY other costs like prepping bike etc. Only thieves would not return a deposit if you couldn't get financing, claiming that they already prepped the bike. They will sell that bike to someone next day or week and you think they would then tell that purchaser "we waived the prep charges cuz we burned the last guy for 'em who couldn't get financed". No, they'll charge twice.

just_luc said:
I don't see ANYWHERE in the OP's post that the dealer is a 'scumball' or has done anything wrong.. of course they tried to up-sell on the extended warranty and inssurance - it's their job. It's up to the buyer to do his/her own research and decided whether or not to accept. I'm not saying I would have bought them, but you can't blame the dealer for trying. As for the deposit, he also doesn't say anywhere that they are trying to keep it.. it sounds like he is just worried he may not get approved for financing and didn't ask the right questions before signing.. In all likely hood, if HE tried to cancel the sale they would want to keep it, but if he made a fuss they probably still would give it back.. it's only 250 bucks.... IF he doesn't get approved.. they will likely call him very apologetic, offer his deposit back upfront, and tell him to please come back if he fixes his credit or finds another form of financing.IF the OP gets denied for financing AND they then choose to be overly technical about their legal right to the deposit.. THEN that's another conversation.. but as of right now, the likely outcome is that they will give it back voluntarily and there is no reason to assume otherwise... to go into the dealer making a scene.. or to assume they are scumballs..
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"of course they tried to up-sell on the extended warranty and inssurance - it's their job. "

But it is not their job to scoff at him for reading and trying to understand the contract. Buying a bike should be a cool experience and the success of this is primarily in the dealer's hands.

"but you can't blame the dealer for trying."

Yes you can! They were argumentative, forceful and degrading, (and probably impatient since they were scoffing).

"IF he doesn't get approved.. they will likely call him very apologetic"

Somehow I don't think so, lol. Apologetic..really? Are we discussing more than one dealer here? Salesmen who scoff, don't apologize.

"and tell him to please come back if he fixes his credit or finds another form of financing."

*Please* come back?, lol ya...only if they managed to finagle the THIRTEEN HUNDRED!!! frig dollar loan insurance dig outta him. On only a $5500 purchase...gimme a break..You have had other far more credible posts, IMO, than this one.

To OP, PLEASE TELL US WHO THIS DEALER IS! You've been asked a number of times. You owe it to all the *rest* of the Honda dealers to inform us.It's not like they are scum but there are better experiences to be had than this, so far.. believe me.
 
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TekNinja81 said:
What dealership was this? I've heard a few rather discouraging things about a certain one as of late...
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Brampton powersports? lol.

Be careful with the financing, if you don't agree to the "loan protection" they'll come back and insist that Honda told them they won't finance you unless you sign up for the $30/month life insurance! I called Honda directly, they have no such clause on their financing!!!

And make sure they don't charge you more than $15 for gas, if they won't reduce it to $15 tell them take it off the invoice and when they are ready for PDI you'll bring them a gas can. Worked for me, got it reduced from $30 to $12 :)

cbr250_promo.jpg


R.I.P. CBR 250 :(

gaby_cbr250_accident1.jpg


-Jamie M.
 
When i was buying my 1st car as a n00b (looking for an RSX) i ended up putting 2 deposits of a 1000$ each on 2 cars in money draft form, telling the dealer id be back to him within 48 hours with an answer, if not DO I GET MY DEPOSIT BACK? he said yes. of course nothing signed as i was a n00b. Then i get really caught up and cant get back to him within business hours so i call him up 72 hours later (knowing that i didnt respect my part...) and tell him that im going with the other car...had gotten it inspected and it didnt have rust like the 1st, leather wasnt all scratched up, etc etc.

He said i wouldnt get it back. He lost business opportunity bla bla bla (kinda makes sense..) but i wasnt just gonna give him 1000$ for his pretty russian face. I went down there with my sis (for moral support ;) ) and my sis never saw me mad like that, i was going italian on him with my hands moving everywhere, even called up the other dealer i had been dealing with telling me to threaten him with OMVIC lol. There was no written agreement so it wouldve been a he said/she said battle.
He said "his partner" had already gone to cash the money draft and "his partner" didnt want to bla bla. So i'm thinking okay fine, ill get out of there, right to the bank to cancel the money draft. 10 minutes after i left, im in the line up at the bank... he calls me back saying "his partner" brought it back, so i go back there and he pulls it out of a little drawer (where it probably was already).
Im thinking it was a way to try and sell the car since i was going to lose that 1000$.
And he had the balls to say, 'since i might have lost another sale with you, you better refer me some other people'

RIGHHHHHHHTT
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