Can I Get My Car Downpayment Back?

You may be able to get your car down payment back, all depending on the reason you left one and where the dealership applied the money. A down payment goes toward a vehicle's value, while a deposit is meant to hold a vehicle until you can return to purchase it; the two are often confused. Leasing down payments, however, are not returned. Here's what you should know about getting back a down payment in different circumstances.

To determine if you can get your deposit back, read your receipt. As long as you did not take the dealership's car, leading the dealer to believe you would be back to make the purchase with your own financing or cash, most dealers will return your deposit, although some may give you a hard time. If you did drive the dealer's vehicle for several days, it can rightfully charge you cleaning fees, for the mileage you drove or for any damage that occurred to the vehicle while in your possession.

You should be able to get your down payment back if you purchased a vehicle but didn't finish signing the paperwork or take possession of the car. However, you should be sure to discuss your intentions with the dealer beforehand. If you left a down payment but told the dealership you wanted it back upon purchasing the vehicle, your down payment will be returned if it was not applied toward the vehicle's purchase price when you obtained financing.

Also, if you total your vehicle, you will not receive your down payment back, but will receive money for any equity in the vehicle after the loan amount is paid off, if any is left over.

Unfortunately, if you leased a vehicle and paid every payment up front, there's not a down payment refund law that says you will not receive any of the money back. The exception is if you made that down payment on your car lease but didn't finish signing the lease paperwork.

In typical cases, your leasing bank is listed as your insurance policy's loss payee, a requirement for leasing. In the event of a loss, you not only lose your down payment amount, but will not receive any equity refund after the loan is paid off, if any exists. For this reason it is not advisable to put down a lot of money when leasing. The good news is that as long as you take good care of the leased car to avoid excessive wear, you should receive any security deposit made back.

If you believe the dealer is unfairly keeping your down payment, you may have recourse to get it back. Because many dealers are regulated by a state's motor vehicle office, you can call to put in a complaint. If your complaint is valid, the dealership is called and asked to explain why the money was kept. Without valid reason, the dealer may be investigated.

Sometimes, this is all it takes to get a dealership to return your funds. Otherwise, you can call your state's attorney general, reach out to a lawyer who's knowledgeable about down payment refund law or file a complaint with the Better Business Bureau.