Some dealerships ask buyers to leave money while financing is still being worked out. We understand why that happens, but our approach is generally to get the transaction together before taking someone’s money.
Do You Need to Leave Money to Hold a Used Car?
One situation we hear about from customers more often than you might expect goes something like this:
They find a vehicle they want, but they do not have perfect credit. The dealership tells them to leave $500 while they work on getting financing approved.
The customer leaves the money.
Then a day passes.
Then another day.
They call and hear that the dealership is still working on it. Several days later, they still do not have a vehicle, they still do not have a clear approval, and the dealership still has their $500.
We have had customers come to us more than a week into that kind of situation.
We understand why some dealerships use deposits that way.
When a customer leaves a dealership without buying, there is a good chance they are going to keep shopping. They may pass several other dealerships on the way home. They may find another car they prefer or another financing option that works better.
If a dealership already has some of the customer’s money, it gives that dealership one more opportunity to keep the transaction alive.
From the dealer’s perspective, the deposit creates some commitment.
We are not saying there is never a legitimate reason for that approach.
We simply do not believe it is usually necessary for the way we do business.
If you have decided you want to buy a vehicle from us, we can generally determine very quickly what the financing looks like. If the numbers work for you, then we can put the transaction together. If they do not work, we may look at another vehicle or another financing approach.
What we do not particularly want to do is take your money before we know whether the deal itself makes sense.
We had an interesting example of this with customers whose previous vehicle had been totaled.
Because of the insurance and gap insurance process, along with some changes in their financial situation, their credit had taken a significant hit. They were shopping with us on a Saturday, and the credit union we wanted to speak with was already closed.
We believed we might be able to get them better financing if we waited until Monday and explained their circumstances directly to the credit union.
The customers asked if they could leave us $500 to hold the vehicle until then.
We told them no.
Not because we did not want their business. We absolutely wanted to help them buy the vehicle.
But the car was still for sale.
If someone came in after they left and wanted to purchase it, we were going to sell it.
That has been our philosophy for a long time: the car is for sale until it is sold.
There are advantages and disadvantages to that approach, and we understand that from the customer’s perspective, it may feel more comfortable to put money down and know the vehicle is being held.
But we also believe in being straightforward about what is actually happening.
A deposit should not become a way to keep someone stuck in a transaction that has not come together.
If financing is still uncertain, we would rather explain where things stand than take money simply to keep the customer tied to the dealership.
The other thing buyers should understand is that the used car market can move quickly.
A properly priced vehicle, especially one in a difficult-to-find price range, may attract multiple buyers quickly. We have listed inexpensive vehicles online and had the phone start ringing almost immediately.
So there is a real tradeoff.
Waiting may mean losing a particular vehicle. On the other hand, rushing into a deal or leaving money somewhere without understanding what happens next can create its own problems.
The important thing is clarity.
If a dealership asks you for a deposit, ask exactly what the money does. Is the vehicle being held? Is the deposit refundable? Has financing already been approved? What still needs to happen before the purchase is complete?
Those questions are worth asking before handing anyone your money.
If you are considering leaving a deposit on a used vehicle, make sure you understand exactly what the deposit means and what still needs to happen before the deal is complete.
