Can they keep my deposit?

HELPDESK: From IF: I recently visited a main dealer car showroom as I was interested in upgrading my car. A sales person showed me a 2007 BMW and explained that it would needed to be serviced and some bodywork completed. The sales person was very good and we made a deposit of €500. I was assured that the car would be ready to pick up the following Saturday as during the week it would be serviced and the bodywork completed.

H owever, towards the end of the week I realised that the car had quite a lot of kms on it and that it was a company car for the last three years. I decided that I no longer wanted to proceed with the sale. I called the garage the day before I was due to pick up the car and explained that I did not want to proceed with the sale and requested my deposit back as I had not signed any documents at this point.

After several failed attempts to make contact with the person who was responsible, I was told that if I was not happy with the kms on the particular vehicle I had placed a deposit on, they were happy to allow me the €500 on another vehicle which had lower kms. I stated that I was not happy with this and had decided not to proceed with the purchase of any car. I then got a call to say that they were happy to hold the original deposit of €500 for me against any car that I might wish to purchase up until Christmas. Thereafter, they will donate my deposit to a charity.

The bottom line to this is that I cannot have my deposit of €500 back unless I buy a car from the dealership or they would donate my €500 to a charity. Either way I feel that I am backed into a corner here and that the dealership is not at a loss either way.

Is it legal for the dealership to hold onto my deposit if I change my mind about proceeding with a purchase - I did not sign any documentation while there?

We understand the dealer has now agreed to return the deposit but the case raises several important issues. For advice we turned to Dermot Jewell of the Consumer Association of Ireland. In this case, he says, the Law of Contract is being applied rigidly here until we get to the part where the deposit will be donated to charity. “If a consumer makes an offer to purchase an item, which is accepted by the seller and the consumer then pays a sum of money they have both then formed a potentially legally binding contract – for both sides. In the event of a change of heart, as in this case, the seller can refuse to return the deposit.

“Verbal contracts are binding, especially with deposits attaching to them. In addition, as with any contract, you are contracting to pay the balance.”

While we were not party to the conversation with the salesman and the buyer, there are indications that a deal was done and the reader is fortunate that the garage is not insisting upon completion.

According to Jewell, in such circumstances it would be usual for most retailers to refuse to refund deposits – certainly, in full. “Consumers must realise that deposits are down-payments and, generally, non-refundable.”

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