Can a car dealer keep your deposit if you do not buy a car from him?

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Can a car dealer keep your deposit if you do not buy a car from him?

I gave a deposit to a car dealer. The dealer then told me that he wanted me to send him an e-mail stating that I understoond that if I do not buy the car the deposit is not refundable. Is this legal.?

Asked on April 6, 2012 under General Practice, Connecticut

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

This is legal as long as you and the dealer understand the deposit is not a deposit to be used as a downpayment but rather as an option. An option contract basically means you put money down to temporarily take the property or item (happens in real estate, for example, all the time) off the market only temporarily so you can decide whether you wish to purchase it. He cannot unilaterally do this and if you did not agree to it prior to giving him the money, then he has no recourse but to return it all to you. If he fails to return it, you need to file a complaint with the agency who regulates this dealership and sue for damages or theft.


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