Ruggish TG! If the dealer has a queue of people wanting to buy the thing, then he's suffering no loss. Penalties are illegal under contract law. Deposit must be returned in my non-binding view.

Unless the dealer can show costs were incurred, he must return the deposit. It is an unreasonable stance to retain the whiole deposit. OP needs to get legal advice.

I am very doubtful of the TS simplistic and dogmatic approach. They aren't usually that courageous! And I counter the opinion of TS with this: tinyurl.com/95ndwpa

This is the relevant part: "the trader is entitled to compensation because you have broken the agreement for goods or carrying out a service so keeping part or all of the deposit might be reasonable if the trader has spent money based on your order.

The OP needs legal advice which can take into account who said what, and what pressure was applied etc.

Edited by nortones2 on 15/10/2012 at 21:08

Under contract law the aggrieved may only retrieve what is due. Thus, if dealer X spent Y on preparing the car for sale, that would be a reasonable claim to make against the depoist if X would otherwise lose on the deal. . However, if there is a queue of punters, dealer X has lost nothing because his preparation costs are the same for each buyer. To claim all the deposit is unreasonable, and wrong. Two final points: 1. the OP needs to get advice where all the issues are taken into account. 2. I provided not only a link to CAB but also the gist, in my view consistent with the line I took, that in contract law a penalty is unsustainable. So less of the "your use of the information their is selective and misleading " crap please.