KENTWOOD, Mich. (WOOD) — If you’re going to put money down to hold a vehicle, make sure it’s refundable if there’s a chance you might decide not to buy it. In fact, you should get it clarified in writing before you pay.
Matt Finley learned that the hard way. He’s building a horse training business in Caledonia and had finally saved up enough from his retail job to buy a used truck to transport his horses to shows. When he spotted a Ford F-350 he liked at AA Auto Sales at 5740 S. Division Avenue in Kentwood, he agreed to pay $500 to hold it until he could get it inspected on his day off.
“I said, ‘I want a good truck. This money’s refundable, right?’” explained Finley to Target 8.
“‘Oh, yeah, it’s refundable, but you don’t want the money, you want the truck,'” he recalled the salesman saying.
But Finley says the inspection showed multiple problems and he no longer wanted to buy it. He asked for his deposit back, but says AA Auto refused to turn it over.
AA Auto Sales owner, Alan Anderson, refused to speak with Target 8 on camera, but did refer us to his attorney, Peter Bosch. Bosch pointed out that Finley had signed a purchase agreement when he paid the deposit and AA Auto had paid $440 to outfit the truck so it could pull a fifth wheel trailer to haul horses. Bosch said “common sense” says the dealership would not have invested that money if Finley had not officially agreed to purchase the vehicle.
Finley insists he never told AA Auto to do any work on the truck.
“I still have no truck and no money,” he said. “That’s 40 hours’ worth of work for me. I’m just a middle-class person.”
Experts offer the following advice for potential buyers who put deposits down to hold vehicles:
- Get it in writing that the money you’re putting down is considered a “refundable deposit” and not “partial payment” for the vehicle.
- Read the fine print. While the front of the purchase agreement Finley signed said, “The purchaser may … receive a full refund,” the back of it included the clause, “If you fail or refuse to accept delivery of the vehicle or comply with this Agreement, we may keep as liquidated damages any cash deposit you made, to the extent not prohibited by law.”
- Use a credit card to put down the deposit. That way, if there’s a problem, you can dispute the charge with your credit card company. If you use cash, like Finley did, it’s harder to reclaim your deposit.
The BBB offered the following general tips to keep in mind when purchasing a vehicle:
- Don’t be rushed. Give the process your undivided attention and allow plenty of time to ask questions, inspect the vehicle and take a test drive.
- Ask specific questions about a vehicle’s history and condition. If a salesperson indicates that a vehicle has been “checked over,” ask for specific details. Was it a mechanical inspection or just visual? Has the vehicle been put up on a lift?
- Ask for any records on the vehicle, including those related to prior maintenance and any repairs done by the dealer.
- Ask for a vehicle history report, such as CARFAX or AutoCheck. If the seller does not provide one, purchase one yourself.
- Have the vehicle inspected prior to purchase. Pre-purchase inspections can cost upwards of $100, but may help identify potential issues and save on costly repairs further down the road.
- Remember, there is no mandatory cancellation period in Michigan. Once you purchase a vehicle, it’s yours — unless the dealer offers a return policy on its own. Be clear on the terms of any deposit you put down.
- If you put down a deposit on a vehicle, clarify with the dealer whether the deposit is refundable if you opt not to purchase, and get everything in writing. Bring required documents to make paperwork easier and understand what you’re signing.
- Make sure you read and fully understand the terms of any paperwork you sign. Ask questions about anything that doesn’t make sense or differs from what you’ve discussed with the salesperson. Get any additional commitments made by the dealer in writing.
- If the dealer agrees to perform or pay for additional repairs as a condition of purchase, be sure to have these commitments written into the contract. This is sometimes referred to as a “We Owe” agreement.