The Vehicle Sales Authority (VSA) is committed to ensuring a safe and reliable motor vehicle buying experience for consumers in British Columbia. As part of our mandate, we educate consumers on key terms and important considerations when purchasing a vehicle.
In this bulletin, weโll cover the essential “dos and donโts” to keep in mind before placing a deposit on your next vehicle.
A financial deposit is a significant commitment that indicates your intention to buy, so if you’re unsure about a purchase, itโs best not to leave one.
1. Get a Written Deposit Agreement
Before making a deposit on a vehicle, ask the dealer for a written deposit agreement. The agreement should include: what the deposit is for, the amount of the deposit, whether the deposit is refundable, and under what terms.
2. Understand the Purpose of the Deposit
Ensure you know exactlyย whyย the deposit is being taken. A deposit can serve multiple purposes: Holding a vehicle for a period of time, locating a vehicle from another dealer, bringing in a vehicle from the manufacturer, or arranging financing for a vehicle. If you intend to leave money as a partial payment, make sure you get in writing that the money you are leaving is a partial payment.
3. Clarify Deposit Refund Conditions
Clearly understand what circumstances the deposit will be refundable. A deposit may be kept by the motor dealer if the buyer does not carry through with the transaction as agreed.
4. Retain a Copy of the Deposit Agreement
Make sure you understand all the terms in the deposit agreement. Donโt forget to take a copy with you before you leave.
1. Don’t Leave a Deposit Without a Clear Intent to Purchase
Your deposit will be seen as your commitment to complete the transaction. If youโre unsure about going ahead with the purchase, avoid leaving a deposit.
2. Don’t Assume Verbal Agreements are Enough
Verbal agreements are hard to prove, and miscommunications happen. Always have the deposit terms and conditions in writing and take a copy to avoid misunderstandings.
3. Don’t Assume You Can Return the Vehicle
In BC, vehicle sale agreements completed at the dealership are binding and there is no legal right to return a vehicle for a refund. However, some dealers have return or exchange policies.ย
4. Understand Common Law Rules
If you donโt have a written deposit agreement, common law rules will apply. This means if you do not complete the transaction, the dealer can keep 100% of the deposit, even though they have suffered no damages. However, if the dealer does not complete the sale, you are entitled to a refund of the deposit.
The VSA offers information and a voluntary online dispute resolution process to help you try and resolve deposit disputes yourself. See theย My Self-Helpย link below.
If you cannot resolve the issue yourself, you may need the assistance of theย BC Courts or BC Civil Resolution Tribunalย who have the authority to settle contract disputes about deposits as well as apply the common law rules regarding deposits. Speak to a lawyer before pursuing legal action.
