Without naming names I'm going to tell you about the misadventures of a car buyer who came to Winston Auto Group seeking help in the hope that it might save you some of the grief that this unfortunate person is now dealing with.
Person X wanted a new car. X had in mind what X wanted and went to a large and popular dealership to try and purchase said vehicle. The salesperson she spoke to informed her that if she settled for lower model they would be able to finance her at 2.5% . Because X was concerned that her credit wasn't great she agreed to purchase something other than her desired car in order to not only get financed but get financed at a great rate.
One week later Person X returned to the dealership to take deliver of said vehicle. As any of you who have purchased a new vehicle will know this moment is full of emotion, often anxiety and lots of excitement. While in this state Person X went to the Business Office and signed all the paper work upon the completion of which the Business Manager informed her "oh by the way we could only get 13.5% interest rate for you."
X was taken aback but wasn't thinking too clearly. X made minor attempts to start back peddling out the deal but was informed that the vehicle was brought in for X so X had to buy it. So, having signed all the documents X took delivery of the car and drove it home.
The next day with a clearer head X attempted to return the vehicle with what X felt was just cause. X was paying $600/month for a basic car with an interest rate of 13.5% which was supposed to be 2.5%. The owner of this dealership greeted X with hostility and intimidation.
X called around to other dealers to see they could help: no one could.
X contacted Winston Auto Group last week after hearing that we offer help to people trying to understand an often confusing buying process.
Winston spent quite a lot of time with X on the phone and further learned that not only was X financed with a high interest rate but X's loan was for $30,000 and that X really hated this new car. X's desire was to find some way to get out of this car and into something else. When Winston called around to dealerships of the same manufacturer the most he could get them to offer to buy the car back was $13,000.
Sadly, Winston Auto Group was not able to help X out much other than to suggest paying that loan down as fast as possible to create some equity in the vehicle.
There are so many places in this story that the dealership in question acted questionably and in our opinion unethically. But they key place that X made a mistake was in taking delivery of that new car.
Most cars being purchased take place in two stages. The customer comes and looks at the car and decides they want to buy it. They then leave a deposit with the dealership and sign a deal agreement that has subjects. These subjects can include anything the buyer and seller want and agree to. Winston Auto Group has signed deal agreements with subjects ranging from"acceptable financing" "my wife liking it" "x repair completed" and more. This agreement is binding on both parties. If all subjects are met and the buyer walks away they forfeit their deposit (whether a dealer should actually insist on keeping the deposit is their PR decision). If the subjects are not met the dealer must return the deposit and the deal is dead.
The first thing that should have happened when X walked into that Business Office is the Business Manager should have reviewed all the financial aspects of the deal which would include discussing whether or not the financing terms were acceptable. Because X was told financing could be found at 2.5% and it came in at 13.5% that would constitute a change in the agreement thus breaking the deal. X could have walked away without repercussion and if the dealer had insisted on keeping her deposit a call to the Vehicle Sales Authority would like have seen it quickly returned.
Deposits are an important aspect of vehicle sales. They show commitment on behalf of the buyer to actually buy they car and they lock the seller into the deal so that they can not turn around and try and sell the vehicle to someone willing to pay more. The Agreement associated with these deposits are equally important as they dictate the terms of the sale and how and when a buyer can get their deposit back. When you purchase a vehicle don't be afraid to leave a deposit if you want to buy the car and don't be afraid to stipulate the terms that make you comfortable. Deposits and their associated Agreements are there for the buyers protection as much as they are for the sellers.
If you have any questions about how deposits work or what you could or should look for or ask for feel free to email me at galinthecarbiz (at) winstonautogroup.com.
Until next time
Happy Driving
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