Getting Deposit Back Dodgy Sale

kaznelson

Hi,

I visited a larger Dealer with a view to purchase a new car.

I explained what I could afford and I wanted a PCP deal. The salesman was new and didn't seem to know much about the car or the finance etc. After keep disappearing to talk to his boss we came to a monthly figure that was suitable with a agreed deposit & trade in.

I hadn't planned on visiting the garage that day so didn't have a deposit on me. I phoned back a day later and made a payment of £200 via my husbands debit card.

At this stage alarm bells started to ring. The salesman was initially shocked that I, as a woman, had gone to purchase a car without my husband being present!!! He agreed he would send a receipt and the paperwork and I would send it back or I could meet him somewhere more local???. This never showed up and when I tried to arrange to visit the showroom to sign the papers, they had been lost.

Today I dropped in and found some errors in the figures. They had added £1000 to the list price of the car and they were £500 short on the part-ex. The Business Director said it was a "roll back" to avoid VAT??? and it wouldn't affect my payments?

All sounded very dodgy esp for a big dealership.

The question is am I entitled to my £200 deposit back??

maninthestreet

The mistake you made was to apparently agree to purchase a car based on a monthly repayment figure alone, and not the actual price for the car. What papers have been lost? It seems you may well be in a binding, legal contract, and may lose your deposit if you try to break this contract. Exactly what car have you bought, and now much have you agreed to pay for it?

Silk

Hi Kaz,
Is your decision to break the deal because of the way they are showing the figures on the paperwork ?
So long as you were happy with the final figure and payments does it matter that much how they show the working out ?
Regardless of how they show it do the figures match what the agreed outlay was ie the same deposit and the same payments ?

motorguy

Dealers will always discount back the invoice price of the car you're buying and then knock that discount off the paper price of your trade in. It will save them paying VAT on that amount.

If the figures remain the same, then i dont see the problem - other than you're seeing the true figures for your trade in.

Lemonade_Pockets

kaznelson wrote: »

Hi,
Today I dropped in and found some errors in the figures. They had added £1000 to the list price of the car and they were £500 short on the part-ex. The Business Director said it was a "roll back" to avoid VAT??? and it wouldn't affect my payments?

All sounded very dodgy esp for a big dealership.

The question is am I entitled to my £200 deposit back??

If you haven't signed anything then yes you have a strong arguement for getting your deposit back. However if you signed a order form you will probably find in the T+C's that the dealer retains the right to keep the deposit to cover any costs incurred.

The bit about the VAT doesn't make sense. They need to reduce the price of the new car to reduce their VAT liability.

In a simple example say you agreed a deal of £10,000 for the new car and £2000 for yours. They would drop the price of the new car to £9000 and the yours to £1000. This means that the balance to finance for you is still £8000 but they will be paying less VAT out. In your case it looks sounds like they have reduced the new car by £1000 and dropped your car by £500 but then put the interest rate up to keep your payments the same (this isn't a bad thing).

This is quiet common its just them trying to maximise their profit, doesn't really affect you financially just means they pay less to the tax man. (It is however a bit of a false economy for the dealership unless they think they valued your part ex to high to begin with.)

motorguy

Lemonade_Pockets wrote: »

(It is however a bit of a false economy for the dealership unless they think they valued your part ex to high to begin with.)

Dealers often use discount off the new car to bolster up the price of the trade in, giving the impression that they value the car at a more palletable amount.

However they will strip that back on the invoice to save on the vat, and that will then show the true trade in value.

Premier_2

kaznelson wrote: »

...The salesman was new and didn't seem to know much about the car or the finance etc. After keep disappearing to talk to his boss we came to a monthly figure that was suitable with a agreed deposit & trade in.

This isn't necessarily a sign of a new inexperienced salesperson; it's a technique many experienced sales people also use, and one some sales managers insist their salesmen use.
(but not one that I particularly like - the last time someone kept doing that to me I walked out the showroom when he went one too many times "to get approval from his sales manager" and I bought my car elsewhere.)

kaznelson wrote: »

...Today I dropped in and found some errors in the figures. They had added £1000 to the list price of the car and they were £500 short on the part-ex. The Business Director said it was a "roll back" to avoid VAT??? and it wouldn't affect my payments?

All sounded very dodgy esp for a big dealership.

The question is am I entitled to my £200 deposit back??

So you are getting a deal worth £1500 more than you thought for the same overall price/monthly payments?
Sounds like a bargain, and as long as you don't end up paying more in the long run, whats the problem?

If you wish to complain about a dodgy VAT receipt, do so here:

https://online.hmrc.gov.uk/shortforms/form/TEH_IRF?dept-name=TEH&sub-dept-name=&location=39&origin=http://www.hmrc.gov.uk

but I can't see that being a reason to breach the contract you've already agreed, especially as your suspicions have not yet been proven

Premier_2

Lemonade_Pockets wrote: »

If you haven't signed anything then yes you have a strong arguement for getting your deposit back. ...

The payment of a deposit by the OP is a strong indication of the existence of a contract between the OP & the dealer

Lemonade_Pockets

Premier wrote: »

The payment of a deposit by the OP is a strong indication of the existence of a contract between the OP & the dealer

I didn't say it wasn't. But unless they specifically discussed one anothers cancellation rights and retention of said deposit in each instance, i don't see how the dealership could legally retain it.

Anyway technically i don't think they can change the figures without first recinding the old contract (whether that be verbal or written).

kaznelson

Thanks for all your great replies

Just to clarify, the verbal PCP agreement

Car price £9200
Trade in £5000 (less £3500 finance owing)
Cash deposit £200
36 payments x £118
Final payment of £4500

The paperwork showed the following
Car price £10'200
Trade in £4500 (less £3500 finance owing)
Cash deposit £200 PLUS A FURTHER £1300 CASH DEPOSIT
36 payments x £118
Final payment £4500

Lemonade_Pockets

Sounds like someone's screwed up, the balance to finance figures are not even the same. If those are two sets of figures the second set will not reduce their VAT so thats b0llocks too!

Ring up and say you'd like to proceed with the deal that was agreed or could they return the deposit. E.g £200 deposit and £118 x 36 with a final payment of £4500......the rest of the figures are largely irrelevant.

Unless of course you'd like to shell out another £1300 which is effectively what those figures require you to do.