Car finance refused - deposit back?

Bretonas

I recently wanted to buy a used car. It was over a rent to buy sceme. Basically 20% up front and payments over 24 months with 0% interest. It sounded good enough so I applied for it. When I first talked to the dealer I was told that they need a deposit so the car wouldn't be sold until the finance is approved and everything is sorted. I had no cash on me so I used my credit card. I got a recipe. It wasn't mentioned anywhere neither was I told that this might be non refundable. However, at that point I didn't even give him all the documents needed to apply for the whole deal. I brought them in the next day and was told I get an answer in the next days.

Which I did after 4 or 5 days. The original plan (24 months, no interest) was refused. I wasn't given a reason (which I think is normal), but was told a different financing is possible. This time over 3 years with quite and interest rate on it. It would have brought up the total price for the car by almost 20%. I told them on the phone I might still go ahead, but won't agree on the phone and would talk to my wife and ring back tomorrow. We decided against it and rang them. We were told that we probably won't get the deposit back or they would at least deduct some of it since they had to get it up and ready (repairs etc.)

At no point did I sign any kind of contract. Am I not in the right to get the full deposit back? I know I wouldn't if I had changed my mind after the first finance was accepted. But in this case the original plan was declined (by them) and I was offered a new one and I didn't agree with that. What options would I have here to get my money back? I already rang my credit card company and they told me that the money for the deposit (was around €250) was already taken before the finance was declined.

jor el

Deposits are generally non-refundable, that's the nature of a deposit. It signifies your intent to buy the product, and would normally only be refunded if the terms of your purchase contract allow it, or the retailer had some difficulty in following through with the sale.

In this case, you're at the mercy of what the retailer says. If there is no written contract, then the deposit rules can be taken as being the normal rules associate with them; i.e. non refundable.

I don't quite understand your emphasis on the last line. Obviously the deposit was charged to your card when you presented it. This is how deposits and credit cards work. They were hardly going to wait around for a week or two to take the deposit, when the whole point of a deposit is that it secures the product there and then.

James.

You should not get the deposit back.

A deposit is to stop people from pulling out of deals.

If the car dealer was just going to give the deposit back then what is the point of the deposit ?

Del2005

Bretonas wrote: »

I recently wanted to buy a used car. It was over a rent to buy sceme. Basically 20% up front and payments over 24 months with 0% interest. It sounded good enough so I applied for it. When I first talked to the dealer I was told that they need a deposit so the car wouldn't be sold until the finance is approved and everything is sorted. I had no cash on me so I used my credit card. I got a recipe. It wasn't mentioned anywhere neither was I told that this might be non refundable. However, at that point I didn't even give him all the documents needed to apply for the whole deal. I brought them in the next day and was told I get an answer in the next days.

Which I did after 4 or 5 days. The original plan (24 months, no interest) was refused. I wasn't given a reason (which I think is normal), but was told a different financing is possible. This time over 3 years with quite and interest rate on it. It would have brought up the total price for the car by almost 20%. I told them on the phone I might still go ahead, but won't agree on the phone and would talk to my wife and ring back tomorrow. We decided against it and rang them. We were told that we probably won't get the deposit back or they would at least deduct some of it since they had to get it up and ready (repairs etc.)

At no point did I sign any kind of contract. Am I not in the right to get the full deposit back? I know I wouldn't if I had changed my mind after the first finance was accepted. But in this case the original plan was declined (by them) and I was offered a new one and I didn't agree with that. What options would I have here to get my money back? I already rang my credit card company and they told me that the money for the deposit (was around €250) was already taken before the finance was declined.

The only option you have to is query why you where refused the first credit option. You should be able to get that through data protection. If any of the details are incorrect you may be able to get that and then buy the car.

my friend

if the deposit was contingent upon finance approval then you are entitled to your deposit back

simple as.

fasttalkerchat

James. wrote: »

You should not get the deposit back.

A deposit is to stop people from pulling out of deals.

But it was the dealer who pulled out of the deal!

BostonB

Seems a bit of a scam to me. The deposit was taken against the first deal not the second. Whats to stop the dealer never giving approval to the first plan and always taking the deposit, or forcing people to take the second more expensive deal.

Also if you can't get approval for the first plan, how can you get it for the second.

How does making the customer pay more, make them a better credit risk.

fasttalkerchat

BostonB wrote: »

Seems a bit of a scam to me. The deposit was taken against the first deal not the second. Whats to stop the dealer never giving approval to the first plan and always taking the deposit, or forcing people to take the second more expensive deal.

Also if you can't get approval for the first plan, how can you get it for the second.

How does making the customer pay more, make them a better credit risk.

Probably its with a different credit company so they take a percent.
I would fight for the deposit back then steer clear of them.

keithclancy

Not sure about Ireland but in the Netherlands this is illegal, you cannot take a deposit if you are acting as an Agent for the Finance company (for the Dealers own protection)

I.E.
You say you'll buy the car.
You pay a deposit with Finance being part of the deal (Contract is made when the money is handed over)
Suddenly the Interest rate goes up.

Over here the Dealer would be in major trouble and made to cover the finance themselves if the Customer pushed it.

Its a totally different issue if the op was sorting out Finance themselves, but in this case the dealer was offering it (and receiving a commission for it)

I'd contact Citizens advice op, but IMO the Dealer should offer a full refund.

Dealer has put themselves in an awful situation, taking a deposit was stupid, if it went to court you would simply just have to point out that applying for Finance via the Dealer was more than enough to guarantee you were going to purchase the car.

If the dealer was questioned "Why did you take the deposit when you did not know if the finance package you were offering would be approved"

They wouldn't have an answer.
Effectively the OP is being pressured into an alternative finance agreement on the basis that they will lose their deposit if they do not proceed.

dudara

There may not have been anything written down, but it appears from your description that the deposit was linked with the zero interest finance offer. Without the zero finance, the conditions on which you paid the deposit have changed. Therefore, I'd push hard to get the deposit back.

Also, I'd check out the finance company with the Central Bank of Ireland (supposed to regulate all finance in Ireland).

CIARAN_BOYLE

It sounds to me like the deposit was on the car and as far the dealer was concerned you agreed to buy the car and only the method of payment was in question.

Deposits are normally non refundable be very carefull when paying them in future.

BostonB wrote: »

Also if you can't get approval for the first plan, how can you get it for the second.

How does making the customer pay more, make them a better credit risk.

The higher rate compensates the lender for taking the risk since they go into it realising that the customer may not pay.

jimmymal

cheeky bastards! down to the small claims if you dont get anywhere!

BostonB

CIARAN_BOYLE wrote: »

...The higher rate compensates the lender for taking the risk since they go into it realising that the customer may not pay.

That suggests they are refusing the client a plan they are best able to pay, for one they are less able to pay. Setting them up to fail. If there was a valid reason to refuse them the first plan, its seems very odd that the same criteria doesn't apply to the second plan. Unless they make more money from the customer not keeping up on payments.

BostonB

The finance was through the dealer, regardless if it was through a 3rd party. So its the dealer refusing the deal, not the customer. The deposit can only be in reference to the first deal, as it was taken before the 2nd deal was put on the table.

That said you shouldn't put a deposit on anything unless you know the terms in which its refundable.

Personally I wouldn't make any deal with a dealer who doing business like this. I can only imagine the stunts they'd try to avoid their obligations on a warranty claim for example.

ntlbell

sounds like a complete scam.

Zab

CIARAN_BOYLE wrote: »

It sounds to me like the deposit was on the car and as far the dealer was concerned you agreed to buy the car and only the method of payment was in question.

Why does it sound like that to you?

Bretonas

CIARAN_BOYLE wrote: »

It sounds to me like the deposit was on the car and as far the dealer was concerned you agreed to buy the car and only the method of payment was in question.

The thing is, if the car is priced for lets say €9,000 and that's the same amout you would pay through the 2 year finance and than all of a sudden the criteria are changed and it's gonna cost a total of over €10,500 would you still pay for it?

I was on to the NCA today and I was told that since the dealer changed the terms of the agreement I'm entitled to get the money back.

AltAccount

Don't let them deduct anything for prep or repairs. No dealer, anywhere, will prep or repair a car for sale, beyond what they'd normally do, until they know they have the deal done.

CIARAN_BOYLE

Zab wrote: »

Why does it sound like that to you?

A friend of mine was interested in a car recently and like the op was asked to put down a deposit to hold the car while finance checks were going on. She asked questions about the deposit and if she would get it refunded if she was refused credit. She was told that she wouldn't be refunded and that the deposit was on the car itself rather than the finance deal so to be honest I assumed it was standard way of doing it.

OP if the NCA says you are entitled to a refund then push for it and the best of luck to you.

Pkiernan

James. wrote: »

You should not get the deposit back.

A deposit is to stop people from pulling out of deals.

If the car dealer was just going to give the deposit back then what is the point of the deposit ?

Based on the info offered by the OP in his first post, your post is reprehensibly irresponsible. Shame on you.