How to get out of a new car purchase contract - with minimal pain
Coming up, the contract killer’s guide to backing out of buying a car, once you’ve stupidly, shamefully signed a contract
and paid a deposit. A lot of people do that…
In this report: getting stitched up by a dealer: the idiot’s guide to quick un-picking.
I get two e-mails a week on average - sometimes more. Normally sane, rational people who sign a contract and pay a deposit, at the dealership, usually after getting swept up by the car buying bullshit tsunami.
Then they get home. Reality bites. Perhaps the finance payment is much more than they thought. Maybe their wives threaten to sashimi their wedding vegetables - whatever - and they want to back out before the whole thing becomes a bizarre Lorena Bobbit-esque, Kill Bill wasabi-fuelled nightmare.
This morning I got an e-mail from a guy I’ll call Frank. Frank puts $1000 down on a new Mercedes-Benz for about $100-and-a-bit. He signs and pays. He was just browsing one minute, and now this. Get the number of that bus.
Notionally he jumps in because the salesman is nudging him via the time-honoured bullshit fear that unless he deposits-up, now, someone else could rush in and buy ‘his’ three-point Swastika shitheap at any time.
To which, the Jedi Master’s response is: OK. Let them buy it; Like I care. I’ll take the next one.
Car salesman: An ‘ambush’ predator
Your average car dealer is an ambush predator who will say anything to convince you to stand on the ‘X’ and decide that ankle-grabbing is a grand idea, and that, no, you don’t require lubrication or even a reach-around.
Overlapping fields of fire. If you stand on the X.
Furthermore, the default position of your average Mercedes-Benz arsehole is that is is a tremendous privilege - bestowed by them upon you - if they agree to allow you to give them your money. Lucky you.
Mercedes, in particular, has not yet reached that state of enlightenment which would indicate to them that you could go elsewhere and buy an equivalent wanking chariot, like an Audi.
It’s a cognitive speed hump, and they don’t have the intellectual traction to get over it.
The SMS versus reality
So anyway, there’s a lengthy SMS exchange, which you can read (right - just click to enlarge) between Frank and the sales arsehole (personal opinion) confirming that Frank can back out if the finance comes out more expensive than he can afford.
This is before he signs and pays, of friggin’ course.
And if he does back out, he’ll get his deposit back.
The salesman confirms this. “All good”: Un-quote.
It’s in black and white.
Fast forward: Frank tells me he invokes this ‘brace for impact; full reverse thrusters’ option - finance too expensive, backing out now. Got other commitments, et cetera.
And of course the dealer goes from Dr Jekyll to Mr Hyde in a heartbeat - and now they’re refusing to refund the deposit. Of course…
Cancellation fee … or merely leverage?
and there’s a veiled threat they’ll pursue Frank for 15 per cent of the purchase price if he does not proceed.
So suddenly backing out might be a $16,000 mistake. Ouch.
Respectfully, our hero has fallen for the oldest trick in the car sales arsehole playbook. A deposit does not help you; it locks you in and gives them leverage, which those Mercedes-Benz mother-lovers (personal opinion) seem now to be exploiting.
And it’s not just Benz - they all try it on.
They tell you the deposit is a benefit to you. Securing the car, like it’s the last one on earth. They tell you this precisely because it’s not a benefit to you.
Basically, if you put yourself in this situation, you’ll most likely lose your deposit, but the happy ending part of this story is that they probably won’t come after you hard for the five, 10 or 15% cancellation fee - that’s overwhelmingly just an empty threat.
Fighting fire with napalm
If I were Frank, I’d succinctly recommend sex and travel to the dealer, with words starting in ‘F’ and ‘O’, because, hey, you can’t afford the car.
And, while we’re playing ‘Threat Bingo’ let them know you’ll lodge a formal complaint with the ACCC regarding their conduct. The regulator currently has its knickers in a twist over carmakers behaving badly, so that’s nice.
Do put a cherry on top: Tell them you’ll oxygenate their arseholery via people such as me.
They really detest that.
So, the Jedi mastery here is never pay a deposit or sign any forms until you are absolutely ready to buy. Like: good to go. Let’s do this. (Said Bill Cosby over a martini.)
Let’s talk about leverage and being nudged onto the ‘X’.
If you are buying a car, the suggestion someone will buy ‘your’ car out from under you is entirely artificial. And so what if they do? The same ‘unbeatable’ deal will be available on the next car. Or at a different dealer. Or from a competing brand.
I’m continually amazed how many people - normally articulate, intelligent, educated people, in business for themselves - fall for this underhanded sales bullshit.
(If you do, you’re not alone - but it’s an expensive lesson.)
If you stand on the showroom floor and his lips are moving, and air is causing his vocal cords to vibrate, imagine a clock on the wall. It’s always stuck on the same time: Bullshit o’clock. It’s always bullshit o’clock in a car dealership. Just remember that and you won’t go wrong.