Ask an expert

A friend and I went to a car yard to look for a new car. We saw one that we liked and started discussing the payment options available in order to get this car. We got talking in the office and the salesman showed us our interest rate for finance would be 13% plus other fees totalling up to $850. We were fine with that and agreed that we'll go ahead with the purchase, the salesman then asked us to pay an advance payment of $500 through online banking (Stupidly, we did without signing any agreement).

Fast forward 3 days after, we got a call from the guy and he said that there is a new interest rate of 19% for the finance due to credit history. He said he has tried other companies as well but all can only offer 19%. It was too high for us so we told him that we didn't want to go ahead with it anymore. Now, he wouldn't give us back the advance payment! Whenever we try to reach out to the company, the staff keep saying that the Accounts person is not in the office or the Boss is not there. They also started blocking and ignoring our calls.

Is this legal? From what I know, this is in breach of the FTA (Unfair practice) but it's hard to justify when there wasn't any contract involved but at the same time they did acknowledge that they were going to give back the money, it's just that they have been delaying it for so long now.

Your expert knowledge on this matter would be greatly appreciated!

Hi there,
Generally a deposit will be taken to secure the vehicle and begin the process of intent to purchase the vehicle, this amount is not usually refundable unless strict terms of refund are negotiated in writing beforehand.
However, as there was nothing in writing/ signed and the sales company are the ones who shifted the goal posts so to speak, then I would say these are perfect reasons to be able to request a full refund and cancel any contract (of which there is none). I recommend contacting the commerce commission if you feel their sales practices are not above board.