Money down during car buying negotiations?

[robby]

I went car shopping today at a Toyota dealership. At one point in the negotiations, the salesman asked me if I wanted them to write up a “formal offer.” I said “sure.” (Nothing binding with an offer, right? I could always come back with a counteroffer. And if they wanted to put their offer in writing, that was fine with me.)

Anyway, the guy then asked for some money down “to show that I was serious about purchasing a vehicle.” This was going to be used to convince his sales manager to sign off on this purchase price. (So apparently I was expected to commit to the deal with my wallet before the salesman’s boss had even verbally approved the deal.)

At that point, I told the salesman in no uncertain terms that there was no way I was putting money down while we were still negotiating, and that I was planning to take their purchase price offer and continue to shop around. The salesman seemed quite miffed. He apparently thought that negotiations were over, and that we had settled on a price.

I then told the salesman that I had more research to do, that I intended to see other dealers, but that I fully intended to give him a chance to beat any other price I got from another dealer. I then walked out the door.

Now I’ve bought cars before, as recently as a year ago for my wife. I have never put any money down during price negotiations. Is this a new practice? If I do settle on a vehicle purchase price with this dealer in the future (informally, prior to a purchase contract), how do I handle it if they ask for money down?

[robby]

In trying to answer my own question, I came across the following here.

Resist the deposit.
Assume a deposit is nonrefundable — even if the salesperson or F&I manager says it’s refundable. If it isn’t in writing, it’s not binding. Don’t be too quick to hand over a check in either case, because it’s seldom warranted. You may be asked for a deposit to prove you’re serious. You don’t have to prove anything. You’re there, you’re prepared and you’ve invested time with the dealership. Of course you’re serious. There are a few cases in which a deposit is justified. One is the case of a “hot” vehicle that truly may be snatched up by another buyer — a car you know is hard to come by and not one the dealer tells you is in short supply. The same goes for vehicles for which you’re put on a waiting list. If you don’t make the deposit, those who do will be added ahead of you on the list, not behind. It’s also reasonable to put a deposit down when you order a vehicle from the factory. Try to write into the contract that the vehicle must meet your prestated specifications exactly, or the deposit will be refunded.