Dealer Sold Car With Deposit On It!

by Glenn
(Massachusetts)

Question: Dealer sold car with deposit on it!!! I was recently with a friend who was in the market for a car, so we went out one Saturday afternoon to a local area with many different dealerships.

He was specifically interested in a used car maybe 2-3 years old, but had nothing specific in mind.

We drove by a Mitsubishi dealership and there was a nice sporty used car out front that we both liked.

My friend haggled with the salesman on the price posted on the car. The salesman seemed not too thrilled at the price agreed upon, but "spoke to his manager" and he said ok.

My friend put a $100 deposit on it and arranged to sign the paperwork and pick it up on Monday. When my friend went back to sign and pick up the car, it wasn't out on the lot.

The salesman checked and they had apparently sold the car to someone else who agreed to pay more.

Is there any recourse for a buyer when a dealer renegs on a car sale on which a deposit has been placed?

Thanks!


Answer: Hi Glenn,

Unfortunately, a deposit is as good as the contract it is (or isn't) written on. At least this is my experience.

Based on my experience and training if a car is advertised for sale, it must be for sale to any buyer that wants to buy it. In fact, this is the law in some states. I'm not real sure about Massachusetts, but I was trained in CA on this.

I'm not saying the dealership was doing the right thing here, or even the "legal" thing, but with no contract in place, they would have been obligated by law to sell it in some states if a buyer wanted it. It's a discriminatory thing as far as some states laws are concerned...

Again, this may not apply in MA, but unless there is a law in MA that says a deposit is a legally binding agreement to purchase, then there will be no recourse except your friend getting his money back.

Dealers are all about making the money and if someone offers them more for something and it doesn't break the law, then they will go with the most profitable deal and sell the car even if there is a deposit on it.

Feel free to have your friend check with an attorney familiar with this type of law in MA, but I doubt there is any legal recourse.

Sorry for the bad news, but that's how some dealers play the game...

Take care,
Justin