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My Salesperson Misled Me

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Comments

  • madmanmoomadmanmoo Member Posts: 2,039
    Apparently a lot of businesses do operate that way!

    That wasn't the question though. :) My question was, would you run a business that way? Just because everyone else might do something, doesn't make it right.

    -moo
  • mackabeemackabee Member Posts: 4,709
    I've never believed in "non-refundable deposits". Maybe in the old, old, old days when jipster and jmonroe were growing up and cars used to be built to customer's specs.
    Today just about every manufacturer offers "cookie cutter" models that are nothing special. Take Honda, Toyota, Nissan, all their vehicles can be found at all dealerships with the same options on one car or another. Now a Nissan GT-R for example would be one where the "no refund on deposit" would be used although if the car is as hot as it's been said it is I'm sure they won't have trouble finding another buyer if one backs out. We are having the same thing happen with Prius right now.
    When I did a short stint at another Toyota store they would stamp the buyer's order with the words. "This is a special order. Customer agrees to forfeit thier deposit." preceded by big letters :Non-refundable deposit". I told one of the sales manager that it wasn't legal and he got all bent out of shape. "If a customer pushes the issue I bet you will refund their deposit." I told him and he just didn't say a word.
    :shades:
  • tidestertidester Member Posts: 10,059
    That wasn't the question though.

    I think you could infer from what I said that I'd follow the lead of successful businesses and businessmen like Isell - and Mackabee. They make very abundant sense from my perspective. :shades:

    tidester, host
    SUVs and Smart Shopper
  • madmanmoomadmanmoo Member Posts: 2,039
    Wow, if that isn't an underhanded insult..... Now I'm inferring that you don't think I'm a successful businessman. ;)

    I stick by what I said. I think most of the guys agree too. The situation dictates the outcome. No money lost? Refund back. Money lost? Stick by the agreement.

    -moo
  • tidestertidester Member Posts: 10,059
    Now I'm inferring that you don't think I'm a successful businessman.

    I would have to say that you are a successful businessman -- AS FAR AS I KNOW! :P :P

    Just kidding, of course, but I do think we're all on the same page.

    tidester, host
    SUVs and Smart Shopper
  • saablcpsaablcp Member Posts: 195
    Keeping a deposit when no actual merchandise changes hands is virtually never enforceable.If you have customized the vehicle,e.g added a spoiler,swapped out wheels etc.,you can hold the money UNTIL the vehicle is sold and you recoup your investment. Ever had a coat or a garment lost or stolen in an establishment which prominently displays a sign denying any liability for your items.The non-refundable deposit has just about as much legal weight. You'll keep it only if the customer chooses not to pursue it legally.
  • british_roverbritish_rover Member Posts: 8,502
    deposits for dealer trades when the customer backs out but that is the only time I have ever held a deposit.

    Have only done it twice IIRC as well.
  • mattandimattandi Member Posts: 588
    I realize it is a technicality, but if the language is on a document signed by someone, the argument of "I wasn't told" doesn't really hold up outside of anything suggesting there was some coercion or anything deceptive. Every document like this usually has language that says the signer has read and understands and agrees to all the terms in the document.

    The term "draft" is bothersome. At least suggests something less than binding. Hope the OP comes back. I'd love to know how this works out.
  • madmanmoomadmanmoo Member Posts: 2,039
    So you're saying a signed contract is not binding?

    ......

    Read my earlier post about holding money. We do it every day.

    Last month a customer gave me $1,000 to hold a vehicle until the rest of his money came in. The dealership passed on two deals that were interested in the the same vehicle and then he backed out. We kept the money.

    Our customers understand there is a cost to doing business. It appears that many other people need to learn this.
  • saablcpsaablcp Member Posts: 195
    The legal mumbo jumbo on the back of this document,in my opinion,has nothing to do with a vehicle being brought in via dealer trade for a client,rather a car that was traded by the prospective buyer as part of the transaction prior to final payment,hence protecting the dealer from potentially having to unwind two deals.At least thats how I read it.
  • volvomaxvolvomax Member Posts: 5,238
    Today just about every manufacturer offers "cookie cutter" models that are nothing special. Take Honda, Toyota, Nissan, all their vehicles can be found at all dealerships with the same options on one car or another.

    Not with us.
    You can build some really wierd saleproof Volvo's.
  • madmanmoomadmanmoo Member Posts: 2,039
    Ditto on Porsche.
  • saablcpsaablcp Member Posts: 195
    Please don't take offense ...but you were able to keep the money only because the client did not seek legal advice.You passed on two deals,okay.......does that mean you are going to have to return the car to the factory as unsaleable? Will you send it to the crusher?My only point is,right wrong or indifferent,if the customer pursues it he will almost inevitably win.
  • madmanmoomadmanmoo Member Posts: 2,039
    No offense being taken. We kept the money and the customer understood. He didn't pursue legal action because he realized what he had done.

    Legal action? How could a client possibly win in court if he signed an agreement that says his money is non-refundable? The document outlines the conditions. That's a contract. We had our attorney draw up the contract for people to sign. Yes, we're covered.

    Do you think that people get their earnest money back on a house when they don't fulfill their obligations as outlined in their contract?
  • british_roverbritish_rover Member Posts: 8,502
    Same for Land Rover although they have reduced the chance of it happening over the last few years. It used to be there were no restrictions at all for the top spec Range Rvoers so you could order any exterior color with any interior color or wood choice.

    Want a gold range Rover with green and ivory leather interior and black grand piano wood? You can have it just check these boxes here and hand over a 10,000 dollar non-refundable depost please.

    I think it is a Euro thing.
  • mattandimattandi Member Posts: 588
    I agree with your point on this, but I can see how if someone pushed the point how the holder of such a deposit could decide that it just isn't worth fighting so they return the deposit. That would depend to a large extent on how large the deposit is and how much the dealer has already invested in the deal.
  • madmanmoomadmanmoo Member Posts: 2,039
    I agree with your point as well. The sticking points come for us when someone orders a vehicle that is very personalized. Like the Land Rover post, Porsche has no restrictions on any of their vehicles. You can build a Speed Yellow vehicle, put dark wood, mix it with some carbon fiber, put green leather with purple stitching and then find the buyer has backed out. The vehicle is saleproof.

    We've just built a $100k vehicle and it will sit on our lot forever. Actually, in that case, we'd require 50% down non-refundable. :P

    -moo
  • boomchekboomchek Member Posts: 5,516
    We had some weird requests at Honda. One person ordered a Civic Hybrid with ORANGE aftermarket leather, of all colors.

    The dip was non refundable, and imo the car would have been saleproof.

    2016 Audi A7 3.0T S Line, 2021 Subaru WRX

  • jmonroejmonroe Member Posts: 8,989
    In the event you find one that's not painted, don't paint the mirror itself. Only the housing.

    Now how am I going to do that? :confuse:

    I can tell you haven't used a spray can for a while. Those things ain't made to spray with pin point accuracy, they have a pretty wide spray pattern. :P

    jmonroe

    '15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl

  • tidestertidester Member Posts: 10,059
    So you're saying a signed contract is not binding?

    I think the qualifier here is that the "contract" was allegedly a draft. Is a draft contract(signed or not) legally binding?

    Speaking of which, have any of you ever had a situation where you took a deposit but sold the car out from under the person who made the deposit? Just curious.

    tidester, host
    SUVs and Smart Shopper
  • isellhondasisellhondas Member Posts: 20,342
    Different story. If a customer is dumb enough to order a car like that he should pay half up front and have that be non-refundable.

    Honda won't built oddball cars but even honda makes some cars that appeal to very few people. Especially cars with 5 speeds few people want.
  • volvomaxvolvomax Member Posts: 5,238
    I think the qualifier here is that the "contract" was allegedly a draft. Is a draft contract(signed or not) legally binding?


    Not if it isn't signed.
    Otherwise, it is an agreement between buyer and seller and is legally binding.
  • jipsterjipster Member Posts: 6,296
    Speaking of which, have any of you ever had a situation where you took a deposit but sold the car out from under the person who made the deposit? Just curious.

    tidester, you're kind of asking our salespeople to admit they are slimeballs, which I don't think will happen. For selling a car out from someone, who had put a deposit down, would put them in the category of sleazy salesperson (IMO)... which I don't think we have are.
    2021 Honda Passport EX-L, 2020 Honda Accord EX-L, 2011 Hyundai Veracruz, 2010 Mercury Milan Premiere.
  • tidestertidester Member Posts: 10,059
    you're kind of asking our salespeople to admit they are slimeballs

    That was definitely not my intent. I was merely trying to explore how far the concept of "binding agreement" goes by exploring the obverse of the issue. It's quite possible there would be good reasons for a dealer to back out of a deal just as there are good reasons for a customer to back out of a deal.

    tidester, host
    SUVs and Smart Shopper
  • boomchekboomchek Member Posts: 5,516
    If we have a dip on a specific unit, anbd someone else comes in and also wants it we do one of two things (which I would think most dealers do):

    Do a backup deal, in which we get a deposit from the second party should the first one fall through

    OR/AND

    Call the first party and see what the status of their decision is. This is done more if there are SUBJECTS on the worksheet/writeup such as Subject to financing/selling own car/wife asking/borhter in law inspecting etc.................

    These are mostly done on used cars or hard to find new units

    2016 Audi A7 3.0T S Line, 2021 Subaru WRX

  • british_roverbritish_rover Member Posts: 8,502
    We take second deposits all the time. I have taken third deposits on hot cars before.
  • snakeweaselsnakeweasel Member Posts: 19,592
    Ever had a coat or a garment lost or stolen in an establishment which prominently displays a sign denying any liability for your items.

    Unless the establishment takes physical control of your garment they are not liable. Example: if you drop your coat off at the dry cleaner and it disappears then they are responsible, but if you hang your coat up at the local diner and someone walks off with it they are not.

    Now most times its cheaper for the place to replace the lost item than fight it in court but that doesn't mean that they are legally responsible.

    You'll keep it only if the customer chooses not to pursue it legally.

    Depending on how the contract is written and the laws of the particular state a non refundable deposit is just that, non refundable.

    2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D

  • snakeweaselsnakeweasel Member Posts: 19,592
    Please don't take offense ...but you were able to keep the money only because the client did not seek legal advice.

    I will have to agree with Moo here, as long as it is spelled out that it is a non refundable deposit it is non refundable (different state laws may affect that but thats pretty much the case).

    You passed on two deals,okay.......does that mean you are going to have to return the car to the factory as unsaleable?

    As with any business that has an inventory how fast that inventory turns is the key. The faster inventory turns the more you make, the longer it sits there he less you make. Since they had an opportunity to sell the car at least once before the deal fell through they in effect lost profit.

    2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D

  • snakeweaselsnakeweasel Member Posts: 19,592
    Many years ago we were looking at Honda CR-V's he showed me one in the back lot that had been majorly personalized (think riced out big time) and offered it to me a big big discount (something like 25+% off sticker). My response was "If thats what you're going to give me to take it off your hands its not enough".

    2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D

  • boomchekboomchek Member Posts: 5,516
    This is a touchy subject from both points of view (dealership and customer) and I am actually sort of in the middle of a situation with a $5000 deposit (my customer's):

    The details of the story here were told to me by customers I am trying to work with.

    Customers went to a local dealer and put a $5k dip on a new Jeep with specific options and colors.

    They were told the vehicle would arrive within a week or so. When they were called to come in the dealer tried to switch them to a higher model they told me, and of different color.

    They didn't want to pay more and they didn't like the color, and they left ticked off. They returned a week later only to be faced with the same thing: dealer tried to switch them to a higer model , different color, because the one they wanted was not available anywhere in our region.

    So they see my ad in a community paper, and since they are from the same country as me and speak same language, they come in and see me. I do a search and the car they want is available, and quite a few of them actually. The other dealer probably couldn't get one because they have bad relations with most other dealers, and nobody is willing to dealer trade with them.

    I told them straight up that I can get the car they want, but it be best for them to go back to the original dealer and get their deposit back.

    Fast forward about a month now and they're still fighting to get their $5k back. The dealer keeps telling them that the GM/Sales Manager is not in, or they need auth. from back east etc.... basically dragging the whole situation.

    In this case, if no product exchanged hands, and the product they ordered is not available, then they should get their money back. I think it will end up in courts.

    I just want them to get the dip back so that I can get a deal done for them. But right now I think they're so choked that they're starting to get turned off Jeep altogether. :mad: I'd be too if I were them.

    Now the story is based on what my customers told me, so there could be some variances, but

    2016 Audi A7 3.0T S Line, 2021 Subaru WRX

  • snakeweaselsnakeweasel Member Posts: 19,592
    In a situation where the dealer is unwilling/unable to complete the terms of the contract then the deposit should be refunded. Don't think there is any court that would let them keep the deposit in that situation.

    2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D

  • mattandimattandi Member Posts: 588
    Sounds like a rotten deal.

    Is it common in this kind of situation that the dealer would promise to deliver the car within a certain time frame, say a week or so?

    Do they have an attorney friend who could give the dealer a call?
  • mattandimattandi Member Posts: 588
    Sounds like the dealer is dragging this out. Needs a push.
  • boomchekboomchek Member Posts: 5,516
    I want to give them a call and raise heck. It's not that common that is escalaltes to courts, as most dealers try to avoid hassles and court time adn bad reputation.

    Acutally I am delivering a van right now to customer that had a dip at another dealer, that came to me after and asked me for a better deal. I told him I'd give him a better deal but I won't work any numbers until he gets his deposit back. So he did, and got it back no problems, and did a deal with me.

    If the situation would be reversed (me holding a dip and not having a car) I'd just refund the damn thing and move on to the next deal instead of facing courts, bad rep, and ticking customers off, as it's not in my nature anyways to tick people off.

    2016 Audi A7 3.0T S Line, 2021 Subaru WRX

  • mattandimattandi Member Posts: 588
    Doesn't sound like there's any need for court, yet. Just a push. Customer could raise a stink on their own, but they are already getting jerked around it seems. Just thought a call from an attorney friend couldn't hurt. 5 grand is not a small amount of money.
  • boomchekboomchek Member Posts: 5,516
    5 grand is not a small amount of money.

    No it isn't. It's prolly abouyt 5 car deals for them. Another salesguy toild me his customer is in the same situation over $300 with the same dealer.

    Maybe if they got away with it before they think they'll get away with it again. Who knows. I should call me people tomorrow and see what's up. They're elderly and I feel bad for them too.

    2016 Audi A7 3.0T S Line, 2021 Subaru WRX

  • dapupsterdapupster Member Posts: 5
    Just to clarify...the car was already on the lot. It was a demo. car. The salesperson was using it earlier that week to pick up his kids.
  • mackabeemackabee Member Posts: 4,709
    "Now how am I going to do that? "
    And make sure the mirror assembly is NOT on the car when you paint it. We don't want to get over spray on the rest of the car.

    ;)
  • mackabeemackabee Member Posts: 4,709
    Slimeballs and sleazy are pretty strong words to throw around carelessly. Mistakes do happen.

    Back in the 2004 when I was running our internet department we had a lady that wanted a particular Tacoma with a certain package and it had to be Impulse red. So we agreed on the price as it was an incoming unit. The day the truck came in I told my assistant to put a sold sign on it and get it pdi'd and state inspected. We then called the customer and she was ecstatic. This was a friday afternoon and she would pick up the truck on sunday as she works in DC and comes home to the beach on the weekends. So I thought all was well but lo and behold my assistant didn't follow instructions to good. Usually happens with young kids that are still wet behind the ears.

    Next day, Saturday was just another normal sales day and we were rocking and rolling. I left at 5pm and went home.

    When I come in on monday the excrement hits the rotating fan blade.! My colleague (not assistant) has just gotten off the phone with the lady that we were holding the truck for. She was mad as heck and wasn't going to take it anymore! :P Seems like Saturday evening her truck was sold by a floor salesman to another customer. My assistant never put a sold sign on it or took the keys to it after it was pdi'd and inspected. We did have another exact truck coming in and she was nice enough to wait for this one. It went without a hitch.

    My rookie assistant messed up a few more times and big time. We had a customer call from New York about an Echo. He told the customer the car was available for sale. The customer drove all the way from New York to VA to find out the car was not available for sale but it didn't exist.! Lucky for me this happened while I was convalescing from my colon surgery and recovering at home. I heard about it when I went back to work. The guys on the floor hated the kid. He is pretty intelligent but has no common sense. But again, common sense is not that common! ;)
  • mackabeemackabee Member Posts: 4,709
    "if no product exchanged hands" these my friends are the key words. If I remember back to my college days and my criminal justice classes that were taught by one of our illustrious attorneys I remember discussing contract law. I will have to look back through my books and see what the real story is so we can put this baby to bed.

    image
  • mackabeemackabee Member Posts: 4,709
    Ok, so it was a demo car. The customer knew it was a demo car. So what is wrong here? I may have missed something. Demos are the hardest cars to sell since they have tons of miles and been smoked in, drank in, eaten in, and some other x-rated stuff that I won't get into at this family forum. :blush:
  • bolivarbolivar Member Posts: 2,316
    I'm no lawyer, but I thought it has been discussed previously that the 'law' does not like to have money taken for nothing. Non-refundable contracts are not enforcable. Now if there was actual expenses incurred, the money probably can be kept until the money was recouped.

    Personal experience - someone backed out on a home sale. There was a 'deposit', or as it is called in real estate, 'earnest money'. And the person backing out wanted the 'earnest money' back. We consulted an attorney. First thing he wanted to know was 'What are your damages?' We had no damages. As a matter of fact, mainly because the deal involved about 5 weeks of waiting before closing, we were going to refund the earnest money, because we already had another full listed price offer on the house. We only went to the lawyer wanting to know if we could sue and keep the earnest money, without waiting 5 or 6 weeks, having the first buyer not go to closing, etc.

    When the lawyer heard that another contract, for full price, was going to go in place, he again asked 'What are your damages?' Without some actual damages, you really are not going to be able to hold a deposit, no matter what the contract says. And this was a multipage real estate offer, signed contract, with all kinds of terms about the earnest money, and even said that the listing agent got half of it and the seller got half.

    So, car dealers, give the deposits back.
  • bolivarbolivar Member Posts: 2,316
    And, come on salesmen, admit to what we have all read on these forums.

    The hot, hot, new car is coming soon. Or some exotic car has a multi-month or year waiting period.

    Dealers take huge deposits on these cars.

    Then later, the buyer (hopeful buyer) gets the call 'Come in and pick up your deposit'. With the obvious - the dealer has found someone else willing to pay more for that poor buyers car, the car that he thought was his, because he had a big deposit down, with some signed paperwork from the dealer.

    Dealers want to have it both ways. Keep someones deposit, and also give back someones deposit.
  • tedebeartedebear Member Posts: 832
    And make sure the mirror assembly is NOT on the car when you paint it. We don't want to get over spray on the rest of the car.

    Or just use lots of masking/painters tape and newspaper to mask off the areas that shouldn't be painted. Painters tape also works great on the mirror surface.
  • snakeweaselsnakeweasel Member Posts: 19,592
    Actually non refundable deposits are just that (depending on your state law and contract wording) and are enforceable especially if there is some consideration given by the seller.

    A dealer special orders a car it incurs a cost that it would not incur if someone didn't order it. So why shouldn't they recoup that cost?

    2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D

  • snakeweaselsnakeweasel Member Posts: 19,592
    In that case the dealer has the legal obligation to sell the car to the one who made the deposit.

    2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D

  • jipsterjipster Member Posts: 6,296
    Slimeballs and sleazy are pretty strong words to throw around carelessly. Mistakes do happen.

    Not thrown around carelessly at all. If you intentional sell a car out from under someone, who has put a deposit down, you're a slimeball. IMO. I don't think we were talking about "mistakes"... at least I wasn't. Unfortunately they (mistakes) are all to common in the automotive sales industry.

    Nothing wrong with taking a second deposit in case first potential buyer drops out.
    2021 Honda Passport EX-L, 2020 Honda Accord EX-L, 2011 Hyundai Veracruz, 2010 Mercury Milan Premiere.
  • madmanmoomadmanmoo Member Posts: 2,039
    No, Tide. We don't do that. We live by our agreements and we expect the customers too as well. The dealership I work for now is awesome. They are some of the straightest shooters I've ever worked for.

    -moo
  • madmanmoomadmanmoo Member Posts: 2,039
    Thanks for the clarification. In that scenario, there should be no reason why a dealer would hold onto your money. Even if you did sign a non-refundable agreement, the bad publicity would not be worth it and they have not lost any money.
  • madmanmoomadmanmoo Member Posts: 2,039
    Bolivar,

    Completely different scenario. I suppose I should use the terminology on this forum that we use at work.

    Deposits are for "hot" new cars that are coming onto our lot. Those give the owner first right of refusal on a vehicle. No damages occur if they don't want the vehicle because there is a line behind them waiting to buy. It merely holds a place for them and they can say yes or no to buying the car.

    Partial payments are non-refundable because they are used to order a specific car or to bring a car onto our lot in a dealer trade. Why are they non-refundable? Because the dealership is incurring expenses and we want to make sure that the customer is committed and our expenses covered.

    Very different scenarios.
This discussion has been closed.