Vauxhall Astra Coupe/Convertible - Garage stating negative equity payment was deposit

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Thu 2 Feb 2017 22:38
Vauxhall Astra Coupe/Convertible - Garage stating negative equity payment was deposit - Fleabie36

Any advice welcome please. Close friend saw a second hand car they liked and were trading theirs in. Their car had £200 negative equity which the garage stated would be paid to the finance company. The week they were due to pick up the car it was not ready due to too many things wrong with it. Friend then decided not to go ahead with the new finance and cancelled.purchasing the car. The garage then said the £200 was actually a.deposit and to visit citizen advice. So the finance company haven't been paid and my friend is £200 down. Can the garage do this? Or should the money be paid back?

Does my friend have any legal rights? Thank you

Edited by Fleabie36 on 02/02/2017 at 22:39

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Thu 2 Feb 2017 22:49
Vauxhall Astra Coupe/Convertible - Garage stating negative equity payment was deposit - bathtub tom

I'd ask, does the friend have anything in writing?

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Thu 2 Feb 2017 23:08
Vauxhall Astra Coupe/Convertible - Garage stating negative equity payment was deposit - SLO76
It would be highly unusual for a dealer to conclude a deal and take a car off sale then process paperwork and spend money prepping the car without a deposit of some sort.

If the £200 wasn't a deposit why was it required up front when the deal was signed? I suspect your friend has misunderstood this and suggest they look at their copy of the order form to see how this money has been recorded.

As for cancelling the deal. What was wrong with the car that spooked them? Is it not a plus point that the garage was willing to spend money making the car right? As a home trader I prep cars before putting them up for sale so they're ready to go but as a salesman for a large dealer most cars were only mechanically prepped after being sold in case they didn't find a buyer and any deposit was strictly non-refundable and used to weed out timewasters and cover prep costs on cancelled orders.

I take £100 deposits but make it crystal clear that this money will not be returned if they change their mind. If this doesn't suit the customer then they are free to walk away. The only hope of a refund here is based on that order form. If the £200 is listed as a non-refundable deposit then it's gone.
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Fri 3 Feb 2017 07:05
Vauxhall Astra Coupe/Convertible - Garage stating negative equity payment was deposit - Fleabie36

Thank you for all the information, I have not been able to see what paperwork she has, but will make that a priority.

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Sat 4 Feb 2017 13:09
Vauxhall Astra Coupe/Convertible - Garage stating negative equity payment was deposit - Fleabie36

Ok, I have the full story after my friend has gotten over her embarrassment. She was actually declined finance on the car which was sought through the garage. The £200 written on the order form/sales invoice has DEPOSIT crossed out and ineligible writing above it. She was told it was to cover the costs of the m.o.t.

Conditions on the back one of which states - supplier is entitled to his opinion and on return of any deposit made by the hired to cancel this agreement should hirer be unacceptable to any Finance Company approached by supplier. I have no idea what this means in real English.

Garage have told her to see if she can get finance to cover the car and £200 will not be refunded.

Is she covered by the consumer act where the garage has not fulfilled finance?

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Sat 4 Feb 2017 13:18
Vauxhall Astra Coupe/Convertible - Garage stating negative equity payment was deposit - Fleabie36

I have just spotted another line stating if the purchaser has not paid and taken the car within 7 days of signing the agreement the deposit shall be taken and forfeited and ser against expense incurred of the transaction. Where hire purchase proposal is part of transaction the seller reserves the right to determine the sale void should the finance company refuse to finance the transaction.

I am taking this as no leg to stand on, although a finance check should only cost around 35.quid 5x more than the deposit and Amount given against the trade in proposed.

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Sat 4 Feb 2017 19:03
Vauxhall Astra Coupe/Convertible - Garage stating negative equity payment was deposit - SLO76
I'm actually not too sure where she stands on this legally as it's not a situation I've ever allowed. If we were arranging finance for a customer standard practice was to take a deposit but it would be refunded if we couldn't get them credit from one of the three major firms we dealt with. No prep work would be done until this was cleared and if all three failed the car went back on the lot with the customer left to find their own finance if possible.

Some sales staff would refuse to take a deposit or reserve the car until the credit had cleared as they were sick of people who had guff credit (and knew it) wasting time signing up for cars. 99% of people know if their credit is poor so I've little sympathy for those who waste sales staff time buying cars dependent on finance they know they won't get. Might be where this dealer is at in his thinking.

In my opinion he should give the deposit back purely as a matter of preserving his reputation. The customer paid the money for goods and finance facilities they couldn't supply at the end of the day so surely in the eyes of any rational person it should be returned. But it depends on whether your friend was honest about her credit situation. If she was then he won't have done any prep work on the car and is simply hoovering the £200 but if she didn't alert him then he might well have spent money on it so I sympathise with him.

Tell her to contact her local citizens advice office or trading standards who should be happy to advise and tell her NOT to pay a deposit before knowing she can pay for the goods.
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Sun 5 Feb 2017 09:50
Vauxhall Astra Coupe/Convertible - Garage stating negative equity payment was deposit - Fleabie36

thank you for your reply

Yes she was honest with him, he knew she had outstanding finance on her car she was trading in before he started and that there was £200 outstanding on what she was being offered for her car. I think your right that I need to contact TS and CAB for further information. No work has been completed on the car, m.o.t ran out 3 days ago , they also gave her a long list of things the car needed the day before being told no finance. I feel they have taken advantage of a young female with no knowledge of cars or financial commitments.

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Sun 5 Feb 2017 19:42
Vauxhall Astra Coupe/Convertible - Garage stating negative equity payment was deposit - SLO76
Has she spoken to her current finance co about funding? She has a relationship with them so it should be easy enough unless she's behind on payments. Not that I totally approve of this guy holding onto her deposit money in the circumstances but he was honest enough to tell her what was wrong with the car which means I assume he was intending on repairing these faults.

By honest I meant did she tell him about her poor credit? He might be seeing this all the time, I certainly did and while you don't mind trying to get credit for those who tell you up front before wasting half a day with them, you do get sick of people wasting your time when they already know they won't get finance.

The loan firms would usually call us to decline or accept, they would also tell us if they'd previously been declined elsewhere (often several in a few weeks, every garage in town) and sometimes terms were put on the loan such as PPI if they had a moderately bad credit history but that was wrongly now classed as misselling but now these borderline people just get turned down flat. It's actually the people the misselling regulations were designed to help who were hurt the most by them.

Of course if she currently has finance she possibly didn't know and has been turned down for some minor point but I don't understand why she hasn't sought credit elsewhere. If it's just a case of she doesn't want the car anymore then he's perfectly right to retain the deposit. But I've a funny feeling there's more to this story than you've been told. The telling of existent faults on the vehicle and a commitment to spend money fixing them don't sound to me like a dishonest trader but I may be wrong either way. Speak to TS and CAB for advice.

Edited by SLO76 on 05/02/2017 at 19:43

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