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My deposit was not returned after I bought another car - is this legitimate?

Could you advise what justification a used car company has for keeping a deposit, please? This money (£500) was paid by me at their request to take a BMW 5 Series off sale for four days as I could not visit their premises immediately. This was done by phone and nothing was signed. When I asked what implications there were for me they said they would give it back if I did not like the car. Unfortunately for the salesman I then decided to buy another car during the four days and duly advised him. He responded by saying that while the £500 was transferable, it was not returnable. Can you advise please?

Asked on 12 January 2013 by AS, via email

Answered by Honest John
Unfortunately, you broke your contract with the dealer. The agreement was they would hold the car for four days to give you the opportunity to go and see the car. Instead, you bought another car. Had you gone to see the car and decided you did not like it, then, under the terms of your contract, your deposit would have been refundable. But you broke the terms of your contract, so it wasn't.

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