Used car buyers query: Proper paperwork to document refundable security deposit?

General Discussion
1

Hello. Lots of googling in the search engine, and can’t seem to find this question posted before. Answers much appreciated.

I’m looking at a car I want to buy from an individual seller. Before buying, I’m taking the car to a mechanic for a pre-buyers inspection (1-2 hour thorough inspection). The seller wants a $500 refundable deposit, which I am comfortable with, but I want to find a way to properly document the $500 I give her. She seems trustworthy, but it seems smart to find a legal, binding document to print off in case she is not. If not a legal binding document, would a scribbled piece of paper with our signatures work? Or to fill out a “bill of sale” form and mark it “refundable deposit?”

Thanks in advance :slight_smile:

2

You, or she, can type up and print out a document specifying the $500 deposit on the vehicle in question. I suggest you include a description of the vehicle and its VIN.

Once you’ve both signed this document it’s legally binding, and there should be no problems.

I’ve done this many times.

A handwritten document would also suffice, as long as you both sign it.

You’re making this more complicated than it needs to be.

3

Post dating a check is what we did in the olden days, you return the car and get the check back. Now with banking law changes and the amount of lawyers you may have to consult a lawyer.

4

Yeah its no big thing. Just a written receipt for a down payment with x balance due. Deposit refundable subject to passing mechanical inspection. How to get it back again if she is not trust worthy is another matter but at least you won’t have bought the car.

5

Documenting it as a refundable deposit may turn out to be far easier than getting it refunded. Perhaps if you ask he seller to join you when you bring the car in to be checked out the refundable deposit can be waived.

6

What everybody said, put it in writing. Technically when you do this the seller should not deposit the check, if they do you can put a stop payment based on the signed document. Having said all this, if you don’t trust the seller you are probably should not buy from them.