Distance selling regulations - Car Refund in full, or can they keep money

Exodi

As @Grumpy_chap mentions, deposits/reservation fees/etc (whatever you want to call them) are commonplace.

If @Okell and @ThumbRemote are completely correct (as they insist they are) then taking a deposit seems a totally pointless exercise by car dealers, since it would be fully refundable in any event.

Checking the motor ombudsman also suggests the money isn't refundable if a contract is formed (which I think we're all generally agreeing it has?):

Motor Ombudsman said:

If you have simply changed your mind, or even if there is nothing wrong with the car being purchased, this is not a sufficient reason to have your deposit returned.

Of course regardless of peoples interpretation of the regulations, if the dealer is unwilling to back down, the next stage would be issuing court proceedings on the dealer (as the ball is currently in the dealers court - it is within their gift to just unilaterally issue the refund less £500).

Okell said:

@Exodi -  why do you think the OP is being unreasonable (or a tad harsh) for exercising their statutory right to cancel for a full refund of all payments he has made?

I know we have our consumer hats on here, but I'd think it's pretty obvious why it could be considered 'a tad harsh' on the dealer...

OP agrees to purchase on the 17th March and pays a deposit, then on the 18th of March receives the formal order form and pays the balance. A collection date of the 28th of March is agreed.

Fast forward a week and then in the same week collection is due, the OP simply changes their mind and cancels. The dealer inevitably incurred cost moving the car to the OP's local branch, admin cost processing the order and (as the OP says) removed a car from sale for a week that needs to be registered by the 31st March.

Of course we can all stick our noses in the air and insist "not the OP's problem" (though the problem was certainly caused by the OP) as the OP clearly has - but I don't think it's hard to understand why I think it's 'a tad harsh' on the dealer.

the_lunatic_is_in_my_head

Penguin_ said:

If it has cost the dealer that to get the car there then surely if the OP has cancelled after a contract is formed, they are ok to get the costs incurred back?

Under which part of the regs is this surely?  

Grumpy_chap said:

the_lunatic_is_in_my_head said:

if the car is £32k and OP has paid £32k I'm not sure that applies and if it did why would they be talking about costs of moving the car about.
. 

When I was looking for a new car a couple of years back, some of the larger multi-site Dealer networks did have a system where they would bring the car to your local Dealer for your inspection / test drive. 
A fairly typical way things were worded was that you pay a fee for the car to be transported (and around the £500 mark seem common) and, if you then completed the purchase of the car, the fee for the car to be transported was refunded back / discounted off the price of the car, so making that fee almost like a deposit on the car.

I did wonder about something like this, if the reservation fee is a completely separate contract then cancelling the wouldn't affect that separate contract but the dealer would need paperwork showing the car was sold to OP for £31,500 (or £32k minus a £500 discount of some kind).

If the reservation fee is a completely separate contract it would come with it's own cancellation rights, which has additional requirement for services, and depending upon what information was given the extended cancellation period could apply.  

I think OP should keep it simple, they've cancelled, they are due a full refund as per the regs, if the company has other reasons as to why they don't have to refund OP should come back for more advice. 

Penguin_

the_lunatic_is_in_my_head said:

Penguin_ said:

If it has cost the dealer that to get the car there then surely if the OP has cancelled after a contract is formed, they are ok to get the costs incurred back?

Under which part of the regs is this surely?  

So I could call up a Ferrari dealership in West Wales (ok lets pretend we have one) & say I'd like x model which is worth £150k" & they say "No problem, we can get one transported here - could you pay £500 deposit?" Then send me the order forms with the Ts&Cs & I sign & pay. 

Next day I cancel & they aren't allowed to recover the costs for transporting a car from another dealership, regardless of it being 'in group' or from a external dealer?

I'm fairly certain the issue here is when is the contract formed as its the customer who is cancelling the contract. If they have signed the order form (which from when I worked for a VW dealership was the formation of the contract) then the dealership may be allowed to keep the deposit to cover costs incurred. 

Jenni_D

Okell said:

*I'm often surprised here and on the Motoring board that many people seem to think that consumer protection legislation only partially applies to car sales.

Well, in a way it does ... when exercising your right to reject (Initial, or Final within 6 months) you are entitled to a full refund on pretty much all products, but when it comes to vehicles the seller can reduce the refund amount to account for the reduction in value due to the number of miles added since purchase. This caveat is probably what drives other misconceptions.  

Okell

Exodi said:

... Checking the motor ombudsman also suggests the money isn't refundable if a contract is formed (which I think we're all generally agreeing it has?):

Motor Ombudsman said:

If you have simply changed your mind, or even if there is nothing wrong with the car being purchased, this is not a sufficient reason to have your deposit returned.

I'll address your other points later, but for now I'll ask you a question regarding the above: that link doesn't apply to distance contracts, does it, which is what we are discussing here?  It only relates to showroom sales doesn't it?

[Edit:  In fact shouldn't you really have linked to here:  Can I get a deposit refund for a car bought at a distance (i.e. online or over the phone)? - The Motor Ombudsman

"For sales at a distance (i.e. when a car is sold over the phone or internet without the customer ever visiting a business’ premises), then the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 say that you have the right to a 14-day cooling off period and to have your deposit back during this time if you decide to cancel for any reason – you are not obliged to give a reason when asking for a refund in this scenario." (my bold for emphasis)]

Okell

Penguin_ said:

the_lunatic_is_in_my_head said:

Penguin_ said:

If it has cost the dealer that to get the car there then surely if the OP has cancelled after a contract is formed, they are ok to get the costs incurred back?

Under which part of the regs is this surely?  

So I could call up a Ferrari dealership in West Wales (ok lets pretend we have one) & say I'd like x model which is worth £150k" & they say "No problem, we can get one transported here - could you pay £500 deposit?" Then send me the order forms with the Ts&Cs & I sign & pay. 

Next day I cancel & they aren't allowed to recover the costs for transporting a car from another dealership, regardless of it being 'in group' or from a external dealer?

I'm fairly certain the issue here is when is the contract formed as its the customer who is cancelling the contract. If they have signed the order form (which from when I worked for a VW dealership was the formation of the contract) then the dealership may be allowed to keep the deposit to cover costs incurred. 

If you look at the link I've given to @Exodi you will see that the Motor Ombudsman - which I believe is a trade body and not a consumer one - says that the dealer must refund all amounts including a deposit.

See;  Can I get a deposit refund for a car bought at a distance (i.e. online or over the phone)? - The Motor Ombudsman

"For sales at a distance (i.e. when a car is sold over the phone or internet without the customer ever visiting a business’ premises), then the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 say that you have the right to a 14-day cooling off period and to have your deposit back during this time if you decide to cancel for any reason – you are not obliged to give a reason when asking for a refund in this scenario." (my bold for emphasis)

The regulations are also clear: see para 34

"34.—(1) The trader must reimburse all payments, other than payments for delivery, received from the consumer, subject to paragraph (10).

(2) The trader must reimburse any payment for delivery received from the consumer, unless the consumer expressly chose a kind of delivery costing more than the least expensive common and generally acceptable kind of delivery offered by the trader."

If the dealer had to transport the car from showroom A to showroom B for the OP to collect, that's just an internal transfer for the dealer, and not delivery to the customer.  If the dealer wants to sell the car to the OP they're going to have to transport it between A and B anyway.  It's not, as I see it, something extra that has been expressly chosen by the customer.  All distance sellers have to absorb the costs of getting their goods to wherever they are distributed or collected from.

You and Exodi might think that's unfair on the seller - and FWIW so do I actually - but what you and I think is irrelevant if the regulations say something different.  It's quite clear that the distance selling regulations are often unfair on sellers.  But businesses don't have to go into distance sales if they don't want to.  They should go in with their eyes open to all the pros and cons especially the cons.

But I'm not a lawyer so I might be completely wrong.  All I can do is read the regulations and try to understand them.  In my opinion the Regs say the OP is entitled to a full refund, including the £500 whether the dealer says the £500 is a deposit or is transport costs.  (And I think the Motor Ombudsman agrees)

Okell

Jenni_D said:

Okell said:

*I'm often surprised here and on the Motoring board that many people seem to think that consumer protection legislation only partially applies to car sales.

Well, in a way it does ... when exercising your right to reject (Initial, or Final within 6 months) you are entitled to a full refund on pretty much all products, but when it comes to vehicles the seller can reduce the refund amount to account for the reduction in value due to the number of miles added since purchase. This caveat is probably what drives other misconceptions.  

True - but in that case it's the law itself that distinguishes between cars and other goods, and not people thinking only selected bits of consumer law applies to cars.

Okell

the_lunatic_is_in_my_head said:

Penguin_ said:

If it has cost the dealer that to get the car there then surely if the OP has cancelled after a contract is formed, they are ok to get the costs incurred back?

Under which part of the regs is this surely?  

Grumpy_chap said:

the_lunatic_is_in_my_head said:

if the car is £32k and OP has paid £32k I'm not sure that applies and if it did why would they be talking about costs of moving the car about.
. 

When I was looking for a new car a couple of years back, some of the larger multi-site Dealer networks did have a system where they would bring the car to your local Dealer for your inspection / test drive. 
A fairly typical way things were worded was that you pay a fee for the car to be transported (and around the £500 mark seem common) and, if you then completed the purchase of the car, the fee for the car to be transported was refunded back / discounted off the price of the car, so making that fee almost like a deposit on the car.

I did wonder about something like this, if the reservation fee is a completely separate contract then cancelling the wouldn't affect that separate contract but the dealer would need paperwork showing the car was sold to OP for £31,500 (or £32k minus a £500 discount of some kind).

If the reservation fee is a completely separate contract it would come with it's own cancellation rights, which has additional requirement for services, and depending upon what information was given the extended cancellation period could apply.  

I think OP should keep it simple, they've cancelled, they are due a full refund as per the regs, if the company has other reasons as to why they don't have to refund OP should come back for more advice. 

I agree with your last paragraph.  So far as I can see the only reasons the dealer has so far put forward for witholding the £500 are not valid reasons under the Regs (eg transport costs, deposit, loss of value) so the OP should just keep arguing for a full refund unless the dealer comes up with a better argument.

I'm in two minds about the reservation fee - as you say if the dealer argues it's a separate contract it would be interesting to see the associated paperwork about cancellation rights and whether those were made clear.  (I suspect the OP was simply asked to pay £500 and got no T&Cs or paperwork)

Grumpy_chap

Exodi said:

As @Grumpy_chap mentions, deposits/reservation fees/etc (whatever you want to call them) are commonplace.

the_lunatic_is_in_my_head said:

Grumpy_chap said:

the_lunatic_is_in_my_head said:

if the car is £32k and OP has paid £32k I'm not sure that applies and if it did why would they be talking about costs of moving the car about.
. 

When I was looking for a new car a couple of years back, some of the larger multi-site Dealer networks did have a system where they would bring the car to your local Dealer for your inspection / test drive. 
A fairly typical way things were worded was that you pay a fee for the car to be transported (and around the £500 mark seem common) and, if you then completed the purchase of the car, the fee for the car to be transported was refunded back / discounted off the price of the car, so making that fee almost like a deposit on the car.

I did wonder about something like this, if the reservation fee is a completely separate contract then cancelling the wouldn't affect that separate contract but the dealer would need paperwork showing the car was sold to OP for £31,500 (or £32k minus a £500 discount of some kind).

If the reservation fee is a completely separate contract it would come with it's own cancellation rights, which has additional requirement for services, and depending upon what information was given the extended cancellation period could apply.  

The devil is in the detail.

There are various ways that different dealers operate.
When I was looking for a car a couple of years back, the common one seemed to be that Dealers would list far more cars than their forecourt could display.  So that would be group stock and either on display at another branch or available from a central warehouse.
You would contact the local branch and they would offer "move me local" for a fee of, typically, £500.  That was a price for the car to be brought to the local site for you to view.  It seemed to be that the way things were structured was then "if you buy the car, the move-me-local charge would be refunded."
With that way of working, the "move me local" contract has effectively been cancelled, the car has still cost £32k.  It would not show the £32k car costing £31.5k.
That "move-me-local" being a separate contract would, as you say, have separate cancellation rights.

I think the main reason the Dealers have this type of thing with a fee is to prevent jokers picking a car in the Outer Hebrides for transfer to the tip of Cornwall...

I was only mentioning that type of possibility for the OP's reference and to encourage them to check any terms and conditions that applied to that original £500 paid and whether it was a "move-me-local" charge, or a refundable reservation fee, or a deposit on the car (which would imply the contract to buy the car had already been entered into at that point), or something else.  
I am sure there are many ways these initial £500 payments are treated in legal terms.  It can make a difference to the refund rights.

beno2k7

Thanks for the advice so far.

The dealer is not budging. Personally, I understand I have created an inconvenience for them, but the exact deposit amount being the exact amount they retain seems odd, they also said they could retain more, but that is absolutely against the order form.

For any dealership people, they are saying this is an "Adopted unit"

---
"In regards to the car, we have actually transferred it to another dealer who had a customer for it and as it was what we call an adopted unit when we sourced it for you, we had to pay for the car in full, so were keen to get our monies back, however we have still incurred the cost of transport so will still have to retain the £500, which I understand you are not happy with but we should not be liable for any of the cost’s incurred."
---

I should add I had not opted for any other options etc, this was a stock car, moved from one location to the dealership. (This was not delivered to me). This was in the sales manager's words, him buying the car into his stock, for him to subsequently sell to me.

Ultimately, I am at fault here (I get it). But am I liable for the delivery fee to their branch, when they bought it for thier branch?

But it doesn't discount the fact that I should be able to recoup as much of my money, provided it is fair and legal to do so, whether I am right or wrong for cancelling, whether or not I have caused the inconvenience.

I'm not sure it is correct that I should incur this delivery fee, as it wasn't delivered to me (The branch bought it for them, to sell to me)