Right about now, Tom Hancock of Avon figured he'd be driving a 2011 Hyundai Sonata, a used iridescent-silver or harbor-gray beauty with no more than 20,000 miles that cost $16,500, a sweet deal from Crowley Kia in Bristol.
Hancock signed a purchase contract that listed everything from registration and title fees, dealer conveyance and sales tax — even his and his wife's birth dates. Crowley Kia still had to find the car, but Hancock left the car dealership that mid-June Sunday thinking he had signed a contact and deposited $500 toward the Sonata.
He had. But Crowley Kia only initialed it, never signed it, and never considered it a purchase contract because it wasn't one. Crowley Kia, like so many other dealers, merely agreed to find a certain model car with a certain number of miles in several color options at $16,500.
"The next day," Hancock says, "they called and said they were going to cancel the deal because they couldn't meet the price. I said that I have a signed contract specifying the delivery of the vehicle at $16,500, but that didn't matter to them. They indicated they would reverse the credit card-deposit transaction, although I did not agree to the cancellation."
TBL, after reviewing the purchase order/contract, doesn't blame Hancock for thinking he had a deal. Yet there's little to find fault with Crowley Kia's actions, other than it used a standard purchase contract for something that wasn't an actual purchase. It was an agreement to find a car for purchase.
"We told him we'd attempt to locate one," says Ryan Durbiano, the Crowley Kia manager. "There's a worldwide shortage of inventory right now. When someone comes in and we commit our resources to purchase a vehicle, we make every effort to meet the specifications. In this particular case, there were no cars available."
The state Department of Motor Vehicles, which also reviewed the case, said there was no deal.
"Because there was no VIN number, there was no purchase agreement," says DMV spokesman Eric Ducey.
Under no circumstances should a prospective car buyer sign such a contract form that lists a "nonrefundable" deposit. Most dealers return it if the car is not purchased, or found. Some don't. Hancock, an information-technology consultant for Keane Consulting who works out of Boston, smartly asked for a handwritten addendum, "refundable deposit if not satisfied."
Turns out he wasn't, so Crowley Kia refunded the deposit.
"The only thing we were doing was trying to get him the car he wanted," says Ken Crowley, who owns six auto dealerships and a recreational-vehicle dealership in the area. "We weren't doing anything malicious, certainly."
Crowley says despite the pro forma contract, his salespeople are instructed not to keep deposits.
"I don't hold people to binding contracts even when they are binding," he says. "If someone doesn't want a car, what possible good does that do me if they don't want it?
"I don't want a deposit; I want them to buy a car. To hell with the deposits. We don't want to keep a deposit if we're not entitled to it."
The deposit is needed, says Crowley, when one of his dealerships commits to finding a car for someone.
"We want to make sure they're serious," he says. "It costs us money to put somebody on it. These are commission people. If they're serious, they usually don't have a problem putting a deposit."
Here's an easy way to avoid the same disappointment Hancock experienced: use a separate, and distinct, agreement form when a customer asks a dealer to find a specific car. Do not use a standard purchase agreement.
"You bring up a good point," says Crowley. "Perhaps what we should to is similar to what the state does in the form of an RFP or RFQ, a request for a quote on an item. The state will do that — they'll send me an RFP [request for proposal] or RFQ and give me specifications and we'll give them a price. Maybe we should put forth an RFQ [form] that's a request of a quote."
The Bottom Line: A consumer who feels betrayed, misled or otherwise let down by a car dealer is a customer lost. Car dealers could avoid confusion, and some lost business, by using an agreement other than a standard sales contract when promising to find a specific car for a potential buyer. And list any deposit on the form as "refundable."
Hancock signed a purchase contract that listed everything from registration and title fees, dealer conveyance and sales tax — even his and his wife's birth dates. Crowley Kia still had to find the car, but Hancock left the car dealership that mid-June Sunday thinking he had signed a contact and deposited $500 toward the Sonata.
He had. But Crowley Kia only initialed it, never signed it, and never considered it a purchase contract because it wasn't one. Crowley Kia, like so many other dealers, merely agreed to find a certain model car with a certain number of miles in several color options at $16,500.
"The next day," Hancock says, "they called and said they were going to cancel the deal because they couldn't meet the price. I said that I have a signed contract specifying the delivery of the vehicle at $16,500, but that didn't matter to them. They indicated they would reverse the credit card-deposit transaction, although I did not agree to the cancellation."
TBL, after reviewing the purchase order/contract, doesn't blame Hancock for thinking he had a deal. Yet there's little to find fault with Crowley Kia's actions, other than it used a standard purchase contract for something that wasn't an actual purchase. It was an agreement to find a car for purchase.
"We told him we'd attempt to locate one," says Ryan Durbiano, the Crowley Kia manager. "There's a worldwide shortage of inventory right now. When someone comes in and we commit our resources to purchase a vehicle, we make every effort to meet the specifications. In this particular case, there were no cars available."
The state Department of Motor Vehicles, which also reviewed the case, said there was no deal.
"Because there was no VIN number, there was no purchase agreement," says DMV spokesman Eric Ducey.
Under no circumstances should a prospective car buyer sign such a contract form that lists a "nonrefundable" deposit. Most dealers return it if the car is not purchased, or found. Some don't. Hancock, an information-technology consultant for Keane Consulting who works out of Boston, smartly asked for a handwritten addendum, "refundable deposit if not satisfied."
"The only thing we were doing was trying to get him the car he wanted," says Ken Crowley, who owns six auto dealerships and a recreational-vehicle dealership in the area. "We weren't doing anything malicious, certainly."
Crowley says despite the pro forma contract, his salespeople are instructed not to keep deposits.
"I don't hold people to binding contracts even when they are binding," he says. "If someone doesn't want a car, what possible good does that do me if they don't want it?
"I don't want a deposit; I want them to buy a car. To hell with the deposits. We don't want to keep a deposit if we're not entitled to it."
The deposit is needed, says Crowley, when one of his dealerships commits to finding a car for someone.
"We want to make sure they're serious," he says. "It costs us money to put somebody on it. These are commission people. If they're serious, they usually don't have a problem putting a deposit."
Here's an easy way to avoid the same disappointment Hancock experienced: use a separate, and distinct, agreement form when a customer asks a dealer to find a specific car. Do not use a standard purchase agreement.
"You bring up a good point," says Crowley. "Perhaps what we should to is similar to what the state does in the form of an RFP or RFQ, a request for a quote on an item. The state will do that — they'll send me an RFP [request for proposal] or RFQ and give me specifications and we'll give them a price. Maybe we should put forth an RFQ [form] that's a request of a quote."
The Bottom Line: A consumer who feels betrayed, misled or otherwise let down by a car dealer is a customer lost. Car dealers could avoid confusion, and some lost business, by using an agreement other than a standard sales contract when promising to find a specific car for a potential buyer. And list any deposit on the form as "refundable."
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