Is this normal - Car dealer requires deposit before mechanical inspection?

Forums › Transport (cars, bikes and boats) › Is this normal - Car dealer requires deposit before mechanical inspection?

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#1988582 5-Apr-2018 09:38

From what I remember of my contract law lectures years ago (not a lawyer, just a required part of a different degree), a valid contact requires;
An offer (by the dealer),
An acceptance (you agreeing to the deal)
And consideration (payment of at least a portion of the sum owed).
So you paying the deposit effectively completes the last two.
The fact that it is conditional on the outcome of the inspection offers little protection unless you specify what is 'satisfactory' and satisfactory to who?

It's a bit like the old "lots of interest in this car, but you can secure it with a deposit" line from salesmen. To which I will normally respond "gee, that's good for you, hopefully it will sell quickly to one of them".

Unless the vehicle is a one of a kind, you hold the cards in this circumstance. Not completely happy -> walk away. But don't part with any money to the dealer until you are happy to do the deal. As mentioned above, pay for the inspection directly to the agency doing it (AA, VTNZ, etc).

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#1988596 5-Apr-2018 09:47

On the other hand without a deposit there's nothing stopping the dealer selling to anyone who walks in off the street even if your inspection comes through clean. IANAL but I believe your deposit can be made conditional on a satisfactory report.

Geektastic

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#1988698 5-Apr-2018 11:36

I once wanted to look at a car listed on Toyota's NZ website in their pre-owned stock. I asked the dealer to get it for me to look at.

They refused unless I paid a deposit. Needless to say, they sold me nowt.

Smithy100

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#1988711 5-Apr-2018 11:49

No, not normal at all.

As others have said, run away. Even if they agree to let you check it without deposit (wrong) or a compulsion to buy (even more wrong)... just run. It absolutely screams dodgy.

In my many years buying and selling cars (including working for a dealer) I've never come across this before.

Just. No.

Handsomedan

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#1988712 5-Apr-2018 11:49

I had a stint in the motor industry on the finance side.

There are a lot of less-than-savoury characters in the trade, but there are also good ones. The good ones will never ask you to pay a deposit and issue an invoice of any sort pending an inspection. They'll welcome an inspection and will often assist by being available for an onsite inspection or sometimes take it to your chosen inspection centre for you.

These guys do not sound like a good bunch. Whether you like the vehicle or not - simply walk away and do as was mentioned earlier - copy the invoice, send back the original with a letter expressing your desire to NOT go ahead with any purchase of any sort and you should be fine (obviously keep a copy of the letter too).

They sound just about as dodgy as dodgy gets. And the pro-forma invoice is an effort to trap you into a purchase you don't want to make.

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#1988738 5-Apr-2018 12:33

Here you go... perfect car salesman.

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#1988739 5-Apr-2018 12:34

Please name the company so no one else has this problem and can steer clear of them.

MurrayM

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#1988782 5-Apr-2018 13:48

My last two cars I bought from a large, well-known dealer in Auckland. Both times we got to the point where I said I liked the car and we had agreed on a price, but I wanted my mechanic to check the car first. They said not a problem, we'll let you take the car over-night and get your mechanic to check it, but first you'll have to agree that if the mechanic doesn't find anything majorly wrong then you'll buy the car. I questioned this but they said it was standard practice these days (this was back in 2010 and again in 2013). There was no invoice or anything like that. I went along with it and the mechanic found nothing wrong and so I ended up buying both cars.

I don't have much experience buying cars so I'm finding this conversation very interesting, especially since everyone is saying that this is a dodgy practice.

DaveDog

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#1988784 5-Apr-2018 13:58

MurrayM:

My last two cars I bought from a large, well-known dealer in Auckland. Both times we got to the point where I said I liked the car and we had agreed on a price, but I wanted my mechanic to check the car first. They said not a problem, we'll let you take the car over-night and get your mechanic to check it, but first you'll have to agree that if the mechanic doesn't find anything majorly wrong then you'll buy the car. I questioned this but they said it was standard practice these days (this was back in 2010 and again in 2013). There was no invoice or anything like that. I went along with it and the mechanic found nothing wrong and so I ended up buying both cars.

I don't have much experience buying cars so I'm finding this conversation very interesting, especially since everyone is saying that this is a dodgy practice.

That's really interesting - I've traditionally taken the car for a test drive and simply taken it to the mechanic at the same time if I've liked it - I've never asked permission or had any issues.

frednz

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#1988795 5-Apr-2018 14:14

MurrayM:

My last two cars I bought from a large, well-known dealer in Auckland. Both times we got to the point where I said I liked the car and we had agreed on a price, but I wanted my mechanic to check the car first. They said not a problem, we'll let you take the car over-night and get your mechanic to check it, but first you'll have to agree that if the mechanic doesn't find anything majorly wrong then you'll buy the car. I questioned this but they said it was standard practice these days (this was back in 2010 and again in 2013). There was no invoice or anything like that. I went along with it and the mechanic found nothing wrong and so I ended up buying both cars.

I don't have much experience buying cars so I'm finding this conversation very interesting, especially since everyone is saying that this is a dodgy practice.

I recently bought a car from a dealer and there was definitely no pressure to pay the dealer anything until I was satisfied with the AA test that I had asked for. I asked the dealers if they could hold the car for me for 2 days while I got the inspection done and they said they were happy with this. I ordered the test from the AA and paid for it and it provided a satisfactory result.

I then told the dealer I would go ahead with the purchase and they then asked for full payment to be made into their bank account before they would release the vehicle. The only thing about this was that it took two full days after payment for the dealer to confirm that the money had been cleared by their bank.

Anyway, the car was delivered OK, but it does seem a common practice with some dealers to give a discount if a deposit is paid before a car arrives in NZ, something that I don't approve of even if the dealer says that the deposit is refundable if you change your mind for any reason when the car arrives.

MurrayM

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#1988809 5-Apr-2018 14:56

DaveDog:

That's really interesting - I've traditionally taken the car for a test drive and simply taken it to the mechanic at the same time if I've liked it - I've never asked permission or had any issues.

I took the cars for test drives, with the dealer sitting in the back, but I knew that I'd have to book the car in with my mechanic (not the AA) and that it would be a few days before they would have an open slot when they could look at it. On the day it could be looked at I picked the car up and delivered it to the mechanic, picked it up again at the end of the day and discussed the findings, then delivered it back to the dealer the next morning.

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#1988827 5-Apr-2018 15:12

MurrayM:

My last two cars I bought from a large, well-known dealer in Auckland. Both times we got to the point where I said I liked the car and we had agreed on a price, but I wanted my mechanic to check the car first. They said not a problem, we'll let you take the car over-night and get your mechanic to check it, but first you'll have to agree that if the mechanic doesn't find anything majorly wrong then you'll buy the car. I questioned this but they said it was standard practice these days (this was back in 2010 and again in 2013). There was no invoice or anything like that. I went along with it and the mechanic found nothing wrong and so I ended up buying both cars.

I don't have much experience buying cars so I'm finding this conversation very interesting, especially since everyone is saying that this is a dodgy practice.

Seems dodgy to me - not to mention the fact that unless you signed an agreement/acceptance, I don't see how they could hold you to it anyway.

I bought a second hand car from Marac about 4 years back and paid for/arranged a full AA inspection at their salesyard which they were happy to facilitate with no obligation on my part.

scuwp

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#1988831 5-Apr-2018 15:38

I have always arranged my own inspections. If the dealer is serious about selling they will happily allow and facilitate the vehicle to be tested.

Never been asked to pay a deposit, and wouldn't pay one if I did. Something is wrong here, or their business practices are simply poorly thought out.

Just like Forrest Gump...turn around and keep running.

Lazy is such an ugly word, I prefer to call it selective participation

mattwnz

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#1989472 6-Apr-2018 13:34

When I have looked at second hand cars, they have always had an AA report, and had some of the manufacturers warranty remaining. I think think if any dealers are forcing people to buy if it comes back with a good report , isn’t good. Even though the report may come back igood, the inspection team may say something about the car that turns you off it, so that can also make a difference. Eg this model can have problems with this or that. Or they may say that you are overpaying. So IMO walk away if that is a condition, because you are the buyer, and you shouldn’t be pressured into buying something that you may find out may not be a great deal after all at the inspection stage. But my question is, how would the dealer know if the report was good or not, as you don’t have to provide it to them, as you paid for it. Not unless that is another condition, that you have to provide it to them? Just make sure the report is done in your name. I would be interested to hear a car dealers view.p on why they do it. Maybe it is supposed to stop tyre kickers, but if someone is paying for a report, then they are obviously committed to buying a new car.

amiga500

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#2001202 23-Apr-2018 16:05

And what is the definition of a 'satisfactory report'? Once you give him a deposit it will be hard to get it back. This sounds like a potentially dodgy outfit to me. I'd try a few other dealers and ask them about their policy on getting a mechanical check done - before wasting a lot of your time on their yard.

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