How to get out of any new car deal with minimal financial pain
People want to get out of this situation for all kinds of reasons. But if you want or need to get out of a new car purchasing deal, here's how…
Frankly, I get an email like this once or twice a week, like clockwork.
A dude named Baz says:
I’ve watched several of your videos - helpful and informative.
I’ve paid for an LDV Deliver 9, but am yet to take delivery. Shortly after, I saw a Ford 350L long wheelbase high-roof drive up my street.
After asking the owner about it and having a good look around, I’m having buyer’s remorse. I wish to make a change and cancel the LDV order and get the big fat Ford.
Your advice about how to proceed would be greatly appreciated. Can you please assist?
-Baz
This might assist you as well, depending on what stage of the process you’re actually up to.
There can be a thousand reasons to find yourself in s similar position, and in addition, dealers are assassins at stitching you up and suddenly you’re signing on the dotted line and swiping your credit card.
Or you might’ve just gone off half-cocked and done everything in the wrong order. Like, research first, then transact. Some people don’t review the market until after the purchase or perhaps you find a better deal the next day.
Then there’s factors beyond your control, like, losing your job the next morning. If only you could go back in time and give yourself better advice.
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When it hits the fan
Unfortunately, in this case, the excrement is deeply impacted into the turbine. Baz has transferred all the money to the dealer.
So not only does he have all the cash, the dealer also has all the leverage. This is an inequitable situation.
Baz should go in and try to negotiate an equitable solution in good faith - after all he paid upfront in full. And there’s massive demand in the market and low supply. So all the dealer has to do is nod and say ‘uh-huh’; all the dealer has to do is make a call and get the next buyer in to buy the vehicle.
There will be an administrative fee, maybe 5 per cent or $2500 - so you can wipe your brow and feel like you got out of it without too much agony.
There can be many reasons you want to go back on a deal; try not to get in that situation to begin with.
However, before going in to negotiate, I would suggest getting the contract - because tall these transactions are essentially a contract - and you need to read and understand your position in relation to the contract by speaking to your solicitor.
This is exactly why you should never hand over the full balance of the vehicle purchase until the day before you intend to pick up the vehicle, knowing full-well that it’s at the dealership, ready for you to pick up and the deal is done.
Otherwise you’re doing yourself a gross disservice if something goes wrong.
Dealers using empty threats
It’s far more common to find yourself in the position where you’ve signed you life away, tapped your card, and youv’e paid a deposit on the car of about $1000 or $2000 - and then you do further research, or you have a regret, or have a regret and need to back out.
It’s very common, and it’s a good/bad news story. Good news, you can get out of it. Bad news, you’re gonna lose your deposit, because that’s one of the terms and conditions of your contract with the dealer.
There is another clause in most of these contracts which, let’s face it, nobody reads until the chips are down. It says in the event of you defaulting and not proceeding with the completion of the purchase of the contract, the dealer can come after you for something like five or 10 per cent of the purchase of the vehicle for you to pay as a penalty.
Dealers may dredge this up and use it against you as levereage for not following through with the purchase. And it panics some buyers, and I’d panic too if I was potentially looking at a $5000 bill for pulling out on a $50,000 car.
But look at it like this. It’s great leverage for a dealer to use against an uninformed buyer, but if you’ve already paid, for example, $2000 deposit and you might be obliged under that contract to come up with another $3000 to amke up your $5k non-completion payment, if you tell him to bugger off, he then has to come after you.
If a dealer has to come after you, that’s gonna cost him to come after you in court for that $3000 (or something), which would be costs much better implemented into the dealership. It’ll also cost him in reputation because word will get around, it’s a very bad look, and people amy choose not to shop at his dealership.
Not to mention the additional costs just hiring a solicitor, and even moreso if the dealer were to lose anyway, putting them even further in the red.
Don’t panic in this situation, but do everything you can to avoid getting in the situation.
What I’m saying here is, dealers don’t pursue customers over this gap in the funds using that clause in the contract. It’s only used as a threat to make a customer to come good with the purchase. Statistically, it doesn’t happen. If the customer says, “Nah”, it doesn’t go anywhere.
Don’t let that threat dissuade you if you’re convinced the right course of action is to back out now.
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