Can a car dealer keep your deposit if he sold the car before you were able to come up with your other half?

UPDATED: Mar 27, 2012

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Can a car dealer keep your deposit if he sold the car before you were able to come up with your other half?

I put $1,500 on a car. I told him that I was expecting my tax refund on the 17th of last month which didn’t happen because I owed the IRS some money. So they took longer than I thought. I contacted the dealer to let him know and he said we will wait until that date and if he decide to sell the car before than he would give me a call. However, he didn’t do that; the only away I found out is that I went to purchase the car and he told me he sold it. Now he just wants to give me half of my money back or put the $1,500 towards another car on his lot. I don’t even want to deal with him anymore.

Asked on March 27, 2012 under General Practice, North Carolina


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Yes the car dealer can keep your deposit if he sold your car before you were able to come up with the balance for it. However, keeping the deposit would be improper under the laws of all states in this country in that there is no such thing as a non-refundable deposit unless the deposit pertains to an "option" to buy.

I would demand that the car dealer return your money with accrued interest by a set date. If not, small claims court seems to be your option.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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