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      09-01-2011, 10:53 AM   #27
MOAB
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Drives: Porsche & BMW
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Quote:
Originally Posted by aspiring335 View Post
http://www.omvic.on.ca/services/cons...posit_back.htm

From this link:

Since there is no provision for a "cooling off" period in Ontario's law, if you want to cancel a vehicle purchase agreement the dealer is entitled to claim "liquidated damages" and retain a part or all of your deposit. Liquidated damages arise from the expenses the dealer might have already incurred in when selling the vehicle to you: e.g. advertising, freight and administrative costs, as well as from the loss of profit resulting from this cancellation.

Basically the dealer has to prove in the form of an itemized list the actual liquidated damages incurred by the cancellation. They can't keep the deposit as an arbitrary penalty just because a buyer cancelled an order.
ok, we are getting a bit technical here, but this all really about the dealer mitigating their damages. If you enter into an agreement to buy a car and then decide for whatever reason that you don't want to proceed, you can walk away... but, the dealer can always come after you for its losses but it also has a duty to mitigate. In other words, they need to try and sell the car to someone else. So, if you agreed to buy a car for $50K and you paid a $1K deposit and the dealer subsequently sells the car for $49K and incurrs additional financing costs, storage costs, etc. of say $3K, then they are out of pocket $4K (i.e. loss of $1K on the sale price of the car plus the $3K in additional expenses) and they can take your $1K deposit and , if they elect to, go after you for the extra $3K, although I think that would be pretty unlikely that they will start an action over $3K...
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