Can a car dealership cancel my order

MalMonroe

I'm with Grumpy_chap on this. 

You obviously signed to say that you accepted their T&Cs but did those T&Cs say anything about them cancelling the whole thing if THEY made an error? I doubt it.

But what you signed wasn't simply an order form, it's a legally binding contract. (Their words, not mine.)

So yes, I'd definitely pursue this one. "forgot the VAT on the car" just isn't good enough. Nor is it professional. 

You DO have rights under the Consumer Rights Act 2015 - contact Citizens Advice about this, and here's their link

https://www.citizensadvice.org.uk/about-us/our-work/citizens-advice-consumer-work/the-consumer-rights-act-2015/

Which has some info about 'unfair contract terms' and their website link is here (scroll to the bottom) -

https://www.which.co.uk/consumer-rights/regulation/consumer-rights-act-aKJYx8n5KiSl

In the first instance, I would write to this dealership to let them know that you intend to pursue this as a case of misrepresentation and that you will be seeking compensation. 

You can try. And you may well succeed. All you have to do is spend a bit of time reading up about your rights and writing a letter. I'd give it a good go myself, anyway.

user1977

MalMonroe said:

But what you signed wasn't simply an order form, it's a legally binding contract. (Their words, not mine.)

It's an offer to enter into one. The OP hasn't answered the question of whether the dealer accepted the offer.

Teme9

Grumpy_chap said:

So the garage have not accepted the order.  A contract requires offer (by the OP) and acceptance by the garage.  Without acceptance, there is no contract and the rest of the Ts&Cs are irrelevant.

Was this a new car?  VAT-payable in full.
Was this a very nearly new car?  Pre-reg?  Demo?  Likely that VAT payable in full.
Was this a used car?  Unlikely that VAT-payable in full - it will be on the margin scheme.

Exactly how was the car advertised?

It was a used car - i'm not aware of margin scheme, I will look into it.

Was advertised on the Mercedes benz website.

Teme9

user1977 said:

MalMonroe said:

But what you signed wasn't simply an order form, it's a legally binding contract. (Their words, not mine.)

It's an offer to enter into one. The OP hasn't answered the question of whether the dealer accepted the offer.

dealer had been the one to send it but I had not received anything in return to say the countersign had taken place.

bris

The law allows for obvious pricing errors, so does contract law, with intension being the key factor here.

Forgetting to add the VAT is a obvious mistake and they never intended to sell the car without charging the VAT.

Grumpy_chap

Teme9 said:

It was a used car - i'm not aware of margin scheme, I will look into it.

Was advertised on the Mercedes benz website.

How old was the used car and was the car VAT-qualifying?

This is important in determining the impact of the VAT being left out of the price offer.

If you buy a new car, say £25k + VAT that makes the retail price £30k.  VAT is 20% of the pre-VAT price or 16.7% of the VAT-inclusive retail price.  This VAT is only paid by the original purchaser.

VAT on used cars is rather more complicated.

If the car is nearly new, so simply pre-registered, the car is not deemed as having been sold the first time for VAT purposes.  So, you buy the car that was £25k + VAT = £30k, but that is discounted to reflect the pre-registered status and you pay £22k + VAT = £26.4k.  VAT is still 16.7% of the VAT-inclusive price.

If the car is older, so was genuinely sold to a consumer the first time around, then the car is not VAT-qualifying when the dealer buys it.  The Dealer then adds value by servicing the car, warranty, valet etc. and sells the car for a higher price than purchased, the gross profit (or margin).  The VAT is only payable on the margin.  So, you buy a used car that cost the Dealer £12k (no VAT) but they sell it to you for £15k plus VAT.  The VAT is only on the margin (£15k - £12k = £3k) at the rate of 20% making the VAT £600.  So, you pat=y £15,600.  In this case, first the error is not so large as to be obvious to you and, second, if they asked you to pay the £600, you might agree (or might do a deal in the middle).

There are further complications around used cars that were owned by some VAT-registered businesses, which changes things a bit but this is not the place to go into all that - the tax saving board would be more appropriate.

So, again, how old was the car?
Was the price obviously under by around 15%?

None of this affects whether you have a contract as you don't - you only had offer but no acceptance.  It may affect the strength of your bargaining position if you want to negotiate.

Finally, is the car still listed on the MB website?  At what price?  Could you simply buy online?

user1977

Teme9 said:

user1977 said:

MalMonroe said:

But what you signed wasn't simply an order form, it's a legally binding contract. (Their words, not mine.)

It's an offer to enter into one. The OP hasn't answered the question of whether the dealer accepted the offer.

dealer had been the one to send it but I had not received anything in return to say the countersign had taken place.

Right, so there's no contract at all.

Grumpy_chap

MalMonroe said:

I'm with Grumpy_chap on this. 

You obviously signed to say that you accepted their T&Cs but did those T&Cs say anything about them cancelling the whole thing if THEY made an error? I doubt it.

But what you signed wasn't simply an order form, it's a legally binding contract. (Their words, not mine.)

So yes, I'd definitely pursue this one. "forgot the VAT on the car" just isn't good enough. Nor is it professional. 

Except, we are not entirely together.

The OP submitted the signed order form - that is the offer
MB did not return the acceptance as per clause 1.1

There is no contract without offer and acceptance.

I agree that the "forgot the VAT" is just not good enough.  This is hardly an amateur back-street garage.

Finally, I wonder how the garage would react if the OP had sent the order form, but not received the acceptance and then said "forget it, I can't go ahead, there is no contract yet and I rescind my offer"?

macman

Was not the contract formed here when the dealer received the deposit? Receipt of the order form alone is not sufficient, but once payment was accepted then there has been an exchange (agreement to supply car in return for £x)?

Teme9

Grumpy_chap said:

Teme9 said:

It was a used car - i'm not aware of margin scheme, I will look into it.

Was advertised on the Mercedes benz website.

How old was the used car and was the car VAT-qualifying?

This is important in determining the impact of the VAT being left out of the price offer.

If you buy a new car, say £25k + VAT that makes the retail price £30k.  VAT is 20% of the pre-VAT price or 16.7% of the VAT-inclusive retail price.  This VAT is only paid by the original purchaser.

VAT on used cars is rather more complicated.

If the car is nearly new, so simply pre-registered, the car is not deemed as having been sold the first time for VAT purposes.  So, you buy the car that was £25k + VAT = £30k, but that is discounted to reflect the pre-registered status and you pay £22k + VAT = £26.4k.  VAT is still 16.7% of the VAT-inclusive price.

If the car is older, so was genuinely sold to a consumer the first time around, then the car is not VAT-qualifying when the dealer buys it.  The Dealer then adds value by servicing the car, warranty, valet etc. and sells the car for a higher price than purchased, the gross profit (or margin).  The VAT is only payable on the margin.  So, you buy a used car that cost the Dealer £12k (no VAT) but they sell it to you for £15k plus VAT.  The VAT is only on the margin (£15k - £12k = £3k) at the rate of 20% making the VAT £600.  So, you pat=y £15,600.  In this case, first the error is not so large as to be obvious to you and, second, if they asked you to pay the £600, you might agree (or might do a deal in the middle).

There are further complications around used cars that were owned by some VAT-registered businesses, which changes things a bit but this is not the place to go into all that - the tax saving board would be more appropriate.

So, again, how old was the car?
Was the price obviously under by around 15%?

None of this affects whether you have a contract as you don't - you only had offer but no acceptance.  It may affect the strength of your bargaining position if you want to negotiate.

Finally, is the car still listed on the MB website?  At what price?  Could you simply buy online?

Car was 2019 March registered. Priced at 29.5K. Cars market value ranges from 30-34k but MB sales advisor said that they would sell the item at 35,550. 

Cars been taken off the website.

The thing is, if they had informed me from the get go then I wouldn’t have the disappointment but for a deposit to be sent, an order form to be signed on my end and then to be told sorry the VAT was forgotten so you either pay the full price or we refund you the deposit is really frustrating and disappointing.