Automotive

Deposit before signing the lease

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Newbie
Apr 28, 2014
18 posts

Deposit before signing the lease

Hi,

My first car lease...
Want to lease a car but the dealer insist on a deposit before i sign the lease agreement. Is this customary practice? any way to go around that? I personally want to review the lease agreement first and then give a deposit. My concern is they agreed verbally to waive certain fees on the lease but I fear those fees will be sneaked back in the contract when I'm about to sign it. And if I back up at that point, I risk to lose my deposit...
Thanks
27 replies
Deal Expert
Aug 22, 2011
41802 posts
30056 upvotes
Center of Universe
udem74 wrote: Hi,

My first car lease...
Want to lease a car but the dealer insist on a deposit before i sign the lease agreement. Is this customary practice? any way to go around that? I personally want to review the lease agreement first and then give a deposit. My concern is they agreed verbally to waive certain fees on the lease but I fear those fees will be sneaked back in the contract when I'm about to sign it. And if I back up at that point, I risk to lose my deposit...
Thanks
High pressure sales tactic.
Insist that you are not prepared to move forward without looking at the sales agreement.
Deal Fanatic
User avatar
Jan 31, 2006
8541 posts
2655 upvotes
Toronto
When you negotiate a car lease with a sales rep they usually dont have the last say, they will tell you he/she will show it to the manager for approval. He/she will ask you for a deposit to make sure you will not back out if the manager agree with it (sales tactic)
Deal Addict
User avatar
Jun 10, 2011
2276 posts
809 upvotes
Etobicoke
This is quarter end. They think by getting your deposit they will lock you into a sale. Typical sleazy dealership tactic.
Look at the agreement take your time to decide what is best for you. Once you sign the agreement you can leave a deposit.
Newbie
Apr 28, 2014
18 posts
Agree is presuure sale tactic. Technically we agreed on the selling price, monthly payments and all that stuff without a deposit but they said verbally that are willing to waive the lease end purchase fee (like 600 bucks +tax).
But that's not what the lease contract says anyway, because the fee is still there...
Deal Expert
Aug 22, 2011
41802 posts
30056 upvotes
Center of Universe
udem74 wrote: Agree is presuure sale tactic. Technically we agreed on the selling price, monthly payments and all that stuff without a deposit but they said verbally that are willing to waive the lease end purchase fee (like 600 bucks +tax).
But that's not what the lease contract says anyway, because the fee is still there...
Never trust their word...it's either on paper signed and confirmed by both parties; otherwise not binding.
Deal Addict
Apr 4, 2013
1274 posts
410 upvotes
Quick question: when you state that the dealer wanted a deposit before signing the lease agreement, is this before the agreement in put in writing? As in, a deposit just to begin negotiating?

Depending upon the dealer, you may sign a lease application agreement and then sign the actual lease agreement a couple of days later once your credit and income/employment has been verified and the application is approved. It is customary to put a deposit down when signing the lease application, as at this point you and the dealer have come to terms on the price and you are now seeking approval from the finance arm. The deposit simply holds the vehicle so it cannot be sold.

But a deposit to simply negotiate is a sleazy tactic. I remember wanting to negotiate the price of a SUV once and the salesperson requested a deposit. When I asked her why, she responded as a demonstration of good faith that I am a serious buyer. I responded that I was sitting right across from her - how much more serious did she need? Guess who didn't sell me a SUV that day?
Deal Addict
Aug 25, 2007
1107 posts
62 upvotes
Bolton, ON
Ask them for a deposit to show that they are serious about leasing you the vehicle...
Newbie
Apr 28, 2014
18 posts
cbr663 wrote: Quick question: when you state that the dealer wanted a deposit before signing the lease agreement, is this before the agreement in put in writing? As in, a deposit just to begin negotiating?

Depending upon the dealer, you may sign a lease application agreement and then sign the actual lease agreement a couple of days later once your credit and income/employment has been verified and the application is approved. It is customary to put a deposit down when signing the lease application, as at this point you and the dealer have come to terms on the price and you are now seeking approval from the finance arm. The deposit simply holds the vehicle so it cannot be sold.

But a deposit to simply negotiate is a sleazy tactic. I remember wanting to negotiate the price of a SUV once and the salesperson requested a deposit. When I asked her why, she responded as a demonstration of good faith that I am a serious buyer. I responded that I was sitting right across from her - how much more serious did she need? Guess who didn't sell me a SUV that day?
I hear you about the lease application. The problem with that fee is it doesn't show up on the lease application or offer to lease, that one page the dealer gave me, but it shows up on the lease agreement with all other fees and fine prints and that's the binding document, right? So, if I put down a deposit for the lease application but that end lease purchase fee is still showing up on the lease agreement and dealer can't or doesn't want to remove it as promised, I guess I'm out of luck and forget the deposit if I back off the deal at that point, hey? Why they just don't just process the application first, get the lease agreement right and then ask for a deposit?
Newbie
Apr 28, 2014
18 posts
BradT wrote: Ask them for a deposit to show that they are serious about leasing you the vehicle...
Awesome idea! ;) )
Newbie
Apr 28, 2014
18 posts
cbr663 wrote: Depending upon the dealer, you may sign a lease application agreement and then sign the actual lease agreement a couple of days later once your credit and income/employment has been verified and the application is approved. It is customary to put a deposit down when signing the lease application, as at this point you and the dealer have come to terms on the price and you are now seeking approval from the finance arm. The deposit simply holds the vehicle so it cannot be sold.
So how do I go about the deposit for the lease application? It's still an application at the end. It can be approved or rejected...
and what if the dealer can't deliver the car as promised (timeframe, colour, trim)?
How can I cover myself so I know I can get my deposit back 100% if the deal goes sour? I don't want to be hostage to the dealer if I give them money for a lease application.
Is there a form where the dealer sign and agrees that deposit is refundable in like 48h, if so and so happens?
Thx all for help
Jr. Member
Dec 1, 2013
190 posts
101 upvotes
Ottawa
udem74 wrote: So how do I go about the deposit for the lease application? It's still an application at the end. It can be approved or rejected...
and what if the dealer can't deliver the car as promised (timeframe, colour, trim)?
How can I cover myself so I know I can get my deposit back 100% if the deal goes sour? I don't want to be hostage to the dealer if I give them money for a lease application.
Is there a form where the dealer sign and agrees that deposit is refundable in like 48h, if so and so happens?
Thx all for help
You can put down a deposit once you've signed the lease agreement. In Ontario, dealerships cannot keep the deposit if they do not fulfill the contract. Some dealerships may try to put language in their contracts that try to skirt this by stating deposits are non-refundable. These clauses do not hold up in actuality and have been defeated in the past. Read your contract and make sure no such language exists and save the headache.

If you want to cover yourself then you can personally write on the contract or have it written in that they must return the deposit to you if they do not fulfill the contract. Remember the dealership has 90 days to deliver your vehicle before you can terminate your contract and get your deposit back unless you or they specifically put in writing that they will promise to deliver the car by so and so and have it signed and initialed by both you and the sale manager.
Newbie
Apr 28, 2014
18 posts
FallThrough wrote: You can put down a deposit once you've signed the lease agreement. .
And that's exactly what I want! Problem is dealer insist on the deposit at the application stage. Just want a CC so he can go ahead with the application. No contract, no wording if deposit is refundable or not, nothing... Just give me the credit application and money, he says. Trying hard to make sense of this process!
Deal Addict
Apr 4, 2013
1274 posts
410 upvotes
FallThrough wrote: You can put down a deposit once you've signed the lease agreement. In Ontario, dealerships cannot keep the deposit if they do not fulfill the contract. Some dealerships may try to put language in their contracts that try to skirt this by stating deposits are non-refundable. These clauses do not hold up in actuality and have been defeated in the past. Read your contract and make sure no such language exists and save the headache.

If you want to cover yourself then you can personally write on the contract or have it written in that they must return the deposit to you if they do not fulfill the contract. Remember the dealership has 90 days to deliver your vehicle before you can terminate your contract and get your deposit back unless you or they specifically put in writing that they will promise to deliver the car by so and so and have it signed and initialed by both you and the sale manager.
Great advice. A dealer cannot keep a deposit if the deal does not complete due to your not qualifying for the lease. If you are concerned about the dealer being not able to deliver the vehicle, select a vehicle from the dealer's stock. Check it over carefully, test drive it a couple of times to make sure that it is the vehicle that you want.

The situation that you are writing about is different than saying someone just changed their mind on the purchase. What you are writing about is being offered to sign a contract that has different terms and conditions than those that were negotiated. Ask the dealer how the process normally works and what the process is that you can expect. You should also ask if it is okay for you to review the lease agreement on your own before it is signed. If you want a copy of it to take home for a certain period of time for review prior to signing, ask the dealer if this is okay. Chances are they will need to confirm this with the business manager/credit specialist, but I am sure that it will be fine.
Jr. Member
Dec 1, 2013
190 posts
101 upvotes
Ottawa
udem74 wrote: And that's exactly what I want! Problem is dealer insist on the deposit at the application stage. Just want a CC so he can go ahead with the application. No contract, no wording if deposit is refundable or not, nothing... Just give me the credit application and money, he says. Trying hard to make sense of this process!
That's craziness. It is very much common practice to view the contract, read the terms, agree to the terms, sign the contract then make the deposit. If they try to do it any other way then explain to them you won't deal unless it is done that way. If they refuse then you walk and go to another dealership.

I've never had a dealer ask for a deposit before I even saw the printout and shook on a price. That's just craziness to me.
Newbie
Apr 28, 2014
18 posts
cbr663 wrote: What you are writing about is being offered to sign a contract that has different terms and conditions than those that were negotiated. Ask the dealer how the process normally works and what the process is that you can expect. You should also ask if it is okay for you to review the lease agreement on your own before it is signed. If you want a copy of it to take home for a certain period of time for review prior to signing, ask the dealer if this is okay. Chances are they will need to confirm this with the business manager/credit specialist, but I am sure that it will be fine.
Exactly what I'm worried about! Change in the T&C that were negotiated. I haven't seen the car. Dealer states he has it but it's 'somewhere in the back' and I need to come in 2 days or so to see it (wth, does it have it or not?) But in the mean time to get the ball rolling, I need a credit application submited along with a deposit to process the application. Doesn't make sense to me!
Another dealer offered me a good price for the same car but is doing the same thing with the deposit. Wants it at the time of the credit application.
If something is not right, I just don't want to lose my deposit money. i feel that the dealer should have a form or something, explaining what the deposit is for, when it's refundable, when it's not...
Deal Expert
Aug 22, 2011
41802 posts
30056 upvotes
Center of Universe
udem74 wrote: Exactly what I'm worried about! Change in the T&C that were negotiated. I haven't seen the car. Dealer states he has it but it's 'somewhere in the back' and I need to come in 2 days or so to see it (wth, does it have it or not?) But in the mean time to get the ball rolling, I need a credit application submited along with a deposit to process the application. Doesn't make sense to me!
Another dealer offered me a good price for the same car but is doing the same thing with the deposit. Wants it at the time of the credit application.
If something is not right, I just don't want to lose my deposit money. i feel that the dealer should have a form or something, explaining what the deposit is for, when it's refundable, when it's not...
Dude, just walk...do you really want to continue with their song and dance???
Deal Addict
Apr 4, 2013
1274 posts
410 upvotes
udem74 wrote: Exactly what I'm worried about! Change in the T&C that were negotiated. I haven't seen the car. Dealer states he has it but it's 'somewhere in the back' and I need to come in 2 days or so to see it (wth, does it have it or not?) But in the mean time to get the ball rolling, I need a credit application submited along with a deposit to process the application. Doesn't make sense to me!
Another dealer offered me a good price for the same car but is doing the same thing with the deposit. Wants it at the time of the credit application.
If something is not right, I just don't want to lose my deposit money. i feel that the dealer should have a form or something, explaining what the deposit is for, when it's refundable, when it's not...
The first dealer is just trying to close the deal as quickly as possible. As others have said, just walk away. Why would you possibly go ahead and buy a car that you haven't seen or haven't test driven yet, simply because they are too lazy to bring it to you?

What province are you in? If you are in ON, at this point, I would suggest you contact OMVIC (https://www.omvic.on.ca/portal/Consumers.aspx) and pose your questions regarding the deposit to them.
Newbie
Apr 28, 2014
18 posts
I test drove the model few weeks ago. I settled on the trim and colour. And i start looking for the best price + T&C out there.
i've found those guys offering the best price, saying they have the car in stock (although I haven't seen it with my own eyes) but they need the deposit along with the credit app. So we are stuck.

People who leased out there, how the whole process went? What was the sequence? When they put the deposit down? With the lease application, with the lease agreement, when they picked up the car?
Again, it's my first lease and hate to be taken advantage...
Jr. Member
Dec 1, 2013
190 posts
101 upvotes
Ottawa
udem74 wrote: I test drove the model few weeks ago. I settled on the trim and colour. And i start looking for the best price + T&C out there.
i've found those guys offering the best price, saying they have the car in stock (although I haven't seen it with my own eyes) but they need the deposit along with the credit app. So we are stuck.

People who leased out there, how the whole process went? What was the sequence? When they put the deposit down? With the lease application, with the lease agreement, when they picked up the car?
Again, it's my first lease and hate to be taken advantage...
Last time I leased, I test drove, sat down with the salesman discussed numbers, went back an forth with him printing a new invoice for every new price that outlined all pricing and fees. We agreed on a price, and we shook hands. I signed the lease agreement and made a $500 deposit with my CC. In this particular case I did not get a VIN since they had to order it from factory so I knew it could be up to two months before I took delivery of the car. It took them approx 5 weeks to get me my car.

NEVER make a deposit without seeing the car, or agreeing to a final OTD price. Making a deposit should be the last thing you do during the car buying process once all terms have been agreed to and you've signed the agreement.

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