There are various scenarios in the process of purchasing your car that may require you to leave a deposit and it is essential to note that the deposit amount should not too high. A reasonable amount to pay would be 20% of your car’s open market value.
According to RealCarTips, below are some examples of possible situations that may require a deposit on your end include the following:
- Unable to make full payment after purchase agreement has been signed
If you need time to make the full payment for your car, your dealer might require you to pay a deposit to ensure that you are serious about the purchase while they hold on to the car for you. However, this deposit should be refundable and not a partial payment.
- Dealer places an order directly from the manufacturer on your behalf
In this case, the deposit will not be refundable if you decide to back out of the purchase. Therefore, be sure to read the agreement thoroughly before committing to it with your signature.
A dealer trade, or dealer swap, happens when your chosen dealer does not have the exact car model and colour that you want, and decides to swap cars with another dealer. This is when it becomes tricky, because you have to make sure that your dealer is indeed able to get and has the car that you want. Request for important details such as the Vehicle Identification Number, specifications of the vehicle, photo of the exact vehicle and date of arrival before leaving a deposit.
In Singapore, on top of the regular deposits, the dealer will also ask for a Certification of Entitlement (COE) deposit of S$10,000. This is the amount that the dealer will have to deposit with the Land Transport Authority in order to bid for the COE under your name.