If you sign agreement, the sale of car is final

A: Mohamed Bouchama of Car Help Canada (carhelpcanada.com), a non-profit consumer group, replies: In this case, the dealer followed the rules. Once a consumer signs the purchase agreement, the sale is final unless the dealer breached the Motor Vehicle Dealers Act. This consumer should ask the dealer for a detailed list of expenses — called “liquidating damages” — incurred by the dealership. If these expenses are below your deposit amount, they must refund the difference. Unfortunately, from our experience in assisting members to resolve such issues, the claimed liquidating damages are usually equal to or higher than the amount of your deposit, so no money is returned. However, if the car is on order and the dealer can cancel, the Q: Last June, I intended to buy a new car from a dealer. I signed an agreement that said the sale was final, and paid a $1,000 deposit. It was a new 2013 model to be ordered. Therefore, no VIN was available when I called to check insurance rates before signing. I asked to cancel the purchase the next day, as I found out insurance would be much higher than previously quoted. They say no money will be refunded. Do I have any recourse? liquidating damages should not be high.

Our reader subsequently forwarded this reply from the dealership with respect to itemized liquidating damages:

On June 11, 2012, you came into our dealership and made an offer to purchase a 2013 Hyundai Elantra Limited with the condition of checking the cost of insurance, allowing you to cancel the purchase if the premiums were too high.

We advised you to check insurance before making your decision because once the agreement is signed, the sale is final. Therefore, we refused your conditional offer and you left.

Conditional offer based on insurance costs was rejected, so buyer later agreed to buy the car without conditions

Two hours later, you came back, told us you’d checked the insurance and are ready to make the offer with no conditions. Financing was approved the same day.

We (later) received your letter asking to cancel because insurance is too high. Unfortunately, it is not acceptable.

If you don’t wish to pick up the car, damages for breach of contract would be as follows:

Salesperson’s commission $350, Business manager’s time $350, and Sales manager’s time $300.

Total assessed at date of breach: $1,000, less deposit of $1,000, equals balance owing to Kingscross (dealership) of $0. Email your non-mechanical questions to Eric Lai at wheels@thestar.ca. Due to the volume of mail, personal replies can’t be guaranteed.