Can a used car dealer keep a down payment on a car that was never sold?

UPDATED: Dec 28, 2010

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Can a used car dealer keep a down payment on a car that was never sold?

My 19 year-old son put $500 down on a vehicle and 2 days later decided that he didn’t want the car. The dealer is reluctant to give us back the money. My son never had possession of the car.

Asked on December 28, 2010 under General Practice, New Mexico


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

The purpose of the deposit is to get the seller to hold the vehicle by giving him the ability to keep the deposit if the buyer changes his mind, attempts to walk away from the sale, etc. This is exactly the sort of situation where a deposit would normally be kept, unless it was actually stated that the deposit would be refundable or there was some period during which your son could change his mind without consequence. It is very possible or even likely that the dealer has no obligation to return a deposit if your son, without any wrongdoing by the dealer, simply decided that he does not want this car. If you son wants *some* car from this dealer, perhaps you can get the dealer to roll the deposit, or at least most of it, onto another vehicle.

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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