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Tips on Buying Cars/Refund on Car Deposit of $1,000 without signing contract



I made a deposit of $1,000 on a used SUV pending approval from Bank for funding. I decided later that I don't want the SUV again and the dealer said I cannot get my refund back. Please what is my right on this deposit without signing a contract.



ANSWER: Hi Nikki sorry to hear about your problems,

A dealer is not allowed to keep a deposit on a vehicle the customer did not buy. You didn't say what state you're in but this rule applies to all 50 states. And it doesn't matter what the dealer tries to call the deposit i.e. an option to buy or a nonrefundable deposit... If you don't buy the car you get the deposit back.

If I were in your position I would find out whose name is on the dealer license by looking it up at your local DMV website and then I would follow up with a demand letter to the person named on the dealer license of the dealership where you didn't purchase the car... I would call the dealership and ask for that person's e-mail address and I would e-mail him the demand letter and follow it up with a hard copy in the US mail sent certified with return receipt requested. I would be more than glad to read your demand letter and make any necessary adjustments before you send it if you would like.

It does no good at all to go into the dealership and yell and scream for your money back to some sales manager who couldn't give it back to you anyway because he can't sign checks. Send the letter to the guy whose name is on the line and if you don't get a positive result in the proper timeframe which is 5 to 7 days then I would file in small claims against the dealer.

Make sure in your demand letter that you imply or suggest the very real likelihood that you will be posting the story of your experience on every car buying review website you can find. My personal e-mail is Send me your demand letter with the persons name address and name of his dealership I will make the necessary adjustments if any and get you your money back. Don't despair this money is coming back!

Roger The Car Guy

PS check out my blog for the answer to these types of questions and more at

---------- FOLLOW-UP ----------

QUESTION: Thanks for your answer Roger. I am from Calgary, Alberta in Canada. Does the same demand letter apply. I will so much like to write the demand letter.



Nikki I have been on vacation and just spotted this email in my que ...did you get your money back yet? please get back to me asap if you haven't and we will go after this POS and... my personal email is me there for fastest response thanks Roger

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Roger Alvey


I can answer any question about the car buying process. I am a recognized industry expert on all issues regarding auto finance, including sub prime and buy here pay here financing, I can answer questions about car lock out systems, GPS monitoring by your bank, and about auto recovery methods and defenses. I am a 20 yr car industry expert and can tell you what to look for in a used car, how to negotiate the deal, help with how to market your own car, and how to negotiate with the internet department of any car store. I can tell you every single way the dealer is set up to beat you and how to avoid those traps, I can discuss all aftermarket and extended service contract products you will be offered in the finance process, I have lectured extensively on "The Best Way to Buy a Car" to civic groups and university students. I am a credit expert and can tell you what the dealer and banks are looking for and the rate you can expect to pay. HERE IS THE LINK TO MY OTHER ALLEXPERTS CATEGORIES WHERE I HAVE ANSWERED LOTS OF QUESTIONS HERE IS A LINK TO MY BLOG


20 years industry experience in top management of dealerships and dealer groups. Recognized industry expert since 2004 in the Top 10 industry experts for The Gerson Lehrman Groups Auto Industry Council. I also do consulting work for Atheneum Partners, Expert 360, Expert Connect and Coleman Research. I have been a franchise owner and understand all facets of the auto industry from the time the car leaves the factory until it leaves the lot with it's new owner. I have written training materials for both the prime and the subprime sales and finance process.

NADA, OADA, NFIB, State Certified Used Car Appraiser

Special Finance Insider, Dealer, and Automotive News, Gerson Lehrman Group Auto Industry Council News (frequently)

Willamette University - Salem Oregon BA Economics Willamette University Graduate School of Business - Econometrics Statistics

Awards and Honors
GM's Award of (their most prestigious award) Given to Dealers who surpass their annual benchmark planning volume while also maintaining Top Box (top 5%) CSI

Past/Present Clients
Citadel Investment Group , Summit Partners US ,Broad Peak Investment Management, Nautic Partners, LLC, Hellman & Friedman Investors, L.P. and over 40 additional money managers, hedge funds and research groups

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