Considerations when putting down a deposit on a car

Finding your dream car to meet both your aesthetic and practical requirements is not straightforward. Once you’ve done your research, shortlisted the most suitable cars to meet your needs, and taken your car for a test drive, you will know if it’s the right car for you.

After making your purchase, there are additional factors which need to be considered including paying your deposit. Once you’ve agreed and signed for your new car, you will be asked by the salesperson to sign a legally binding purchase document and submit your deposit. Depending on the details stated in the contract, depends on whether or not you will receive your deposit if you change your mind regarding your purchase.

The amount your deposit costs will also vary between dealers, so ensure you are fully aware of the cost before signing the agreement.

Before you sign on the dotted line, here are our tips on paying a deposit:

1. Make sure you read and fully understand the vehicle order form before you sign it. If you do not understand anything, feel free to ask. If you feel pressured to sign the document without understanding it fully, walk away.
2. Insist that all costs, including stamp duty, registration fees and any insurance and optional extras are clearly itemized. If they are not clearly itemized, you might end up agreeing to pay for something that you didn’t know you had to, which could cost you much more than you’d budgeted.
3. Don't sign a blank order form or one with any blank spaces.
4. Don't sign an order with more than one dealer.
5. Ensure that the contract states that your deposit will be refunded in full if the vehicle is not delivered by a specific date. If this is not in the contract, ask to have this entered in. Otherwise you will just be waiting on your vehicle to come whenever they decide to drop it off.
6. The order usually states the price is 'on delivery'. If your car has to be ordered from the factory, any price increase before delivery will be passed on to you. Keep this in mind as it can be unexpected cost for some.
7. If you are buying using finance, and don't want the dealer to arrange it for you, ensure the following clause is in the sales contract. This agreement is subject to the purchaser obtaining finance on terms satisfactory to the purchaser to complete the sale. If the purchaser is unable to arrange finance which is satisfactory to complete the sale, the purchaser may rescind the contract, and the deposit paid shall be refunded in full to the purchaser. If you sign a contract without this clause, you may have to accept the dealer's finance at a much high interest rate. This is not ideal as you want to get your own finance through a lender that you trust with the best possible rate. Find the right car loan for you, with the flexibility you need.