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Discussion Starter #1
Hello,
I dropped $1000 to the dealer for my deposit back in January. The dealer cashed the check the next day. Is it legal for the dealer to cash the deposit? I thought they just hold the check until you purchase the car, then return it to you. Does anyone know?
 

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Is it leagal?

I'm not a lawyer, but a deposit is like a down payment, so they would cash the check when you gave it to them. Car dealers are usually very good about managing cash flow, especially on the "in" side.

Your deposit should be refundable if they do not deliver a vehicle to your likeing within a resonable time or any time you ask for it back. $1000 is a lot though, usually it's only $300 or at most $500. You've done it, and you want the Prius, so don't look back.

There is a lot of excess demand for this car and the dealer may try to push a less desirable model on you. Don't take it unless it's the one that you want. A reputable dealer will refund your deposit if you ask because they don't want a bad name out there.

Has anyone had trouble with deposits? Asking too much? Failure to refund?
 

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Deposits in California

The law in California is:

California Civil Code Section 2982.7. (a) Any payment made by a
buyer to a seller pending execution of a conditional sale contract
shall be refunded to the buyer in the event the conditional sale
contract is not executed.

Any other action by a dealer is at least a violation of the spirit
of the law if not an outright illegal act.

Whether the check you provided is cashed or not is up to the dealer. Nothing in the law prevents them from cashing it, nor stipulates how much the deposit should be.

Sev MacPete, Esq.
The MacPete Law Firm
San Diego, CA
 

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I paid $500 deposit by credit card. When the car came, 2 months later, I paid the balance by check. I have heard of dealers who only hold the deposit check, but cashing it seems perfectly legitimate, as long as they have not promised otherwise. After all, it's not a deposit if they don't actually get the money. A dealer who does not cash the check is, in effect, waiving the deposit.
 
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