As the arrival of the ’24’ plate approaches on 1 March, The Motor Ombudsman, the automotive sector’s Ombudsman, is offering essential guidance for car buyers, focusing on deposit considerations.

When purchasing a new or used vehicle, retailers commonly request an initial payment, usually a percentage of the total sale price, to secure the transaction. The Motor Ombudsman emphasises several key factors for consumers to consider before placing a deposit:

  1. Affordability Check: Conduct an affordability assessment to ensure both the deposit and long-term ownership costs, including monthly finance repayments, insurance, road tax, and maintenance, align with your budget.
  2. Thoroughly Review Terms and Conditions: Scrutinize all terms and conditions associated with the deposit agreement, seeking clarity on any unclear points by communicating with the sales representative.
  3. Payment Timing: Only pay the deposit and sign the associated paperwork when fully committed to the purchase. Obtain a receipt for the deposit payment as a formal record.
  4. Limited Deposit Refund Opportunities: Understand that, in most cases, deposits are non-refundable, implying a contractual commitment. Exceptions may include production issues preventing car supply or unavailability of the ordered specification.
  5. Remaining Balance: Depending on the deposit size, the balance of the vehicle sale price is payable through a finance arrangement or lump sum, influencing monthly instalments.
  6. Internet Purchases: Online purchases, considered distance sales, fall under specific legislation allowing a 14-day cooling-off period and deposit refund rights without providing a reason.

The Motor Ombudsman recommends using their online Garage Finder to locate reputable retailers committed to service excellence. This ensures access to an independent third party, The Motor Ombudsman, in case of disputes unresolved directly with the retailer.

Bill Fennell, Chief Ombudsman and Managing Director of The Motor Ombudsman, underscores the importance of clarity in deposit terms to prevent disputes and highlights the dedicated Knowledge Base category addressing deposit-related queries on their website.

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