Deposit Receipts and Holding a Car for a Customer

A customer likes a car but needs a day or two to arrange funds, bring a spouse or finish insurance. You can lose the sale by saying no, or you can hold the car for a deposit. The second option works well, as long as both sides understand the terms before any money changes hands.

Most deposit disputes come from one thing: the terms were never written down. This guide covers what a good deposit receipt includes and how to keep your records straight. Rules about deposits, refunds and required wording can differ by state, so check with your state's dealer agency or an attorney. This is general information, not legal advice.

Why take a deposit at all

• It shows the customer is serious, and it takes the car off the market in a way that is fair to you.
• It protects you from turning away other buyers for someone who never returns.
• It starts the paper trail that carries into the final deal.

What a deposit receipt should include

Keep the receipt plain and complete. At a minimum:

1. Dealership name, address and the date.
2. Customer's full name and contact information.
3. The vehicle: year, make, model, VIN and mileage.
4. The agreed price and what is included, such as fees and any promised repairs.
5. The deposit amount and how it was paid.
6. How long you will hold the car, with an end date and time.
7. Whether the deposit is refundable, partially refundable or applied to the purchase, and under what conditions.
8. Any conditions on the sale, such as the customer arranging financing by a certain date.
9. Signatures of both parties and a copy for the customer.

Be clear about refunds

Decide your policy first, then write it down. Some dealers refund the deposit in full if the customer cannot get approved for financing. Others keep part of it to cover lost time if the customer simply changes their mind. Either approach can be reasonable, but some states restrict what a dealer may keep, so confirm what is allowed before you commit to terms.

Whatever you decide, apply it the same way to every customer. Inconsistent treatment is what turns a minor disagreement into a complaint.

Handle the car while it is on hold

Update the car's status so everyone at the dealership knows it is spoken for. Stop advertising it as available, or at least tell anyone who asks that it has a deposit on it. Do not move it, sell it or lend it out while the hold is active.

When the hold period ends, contact the customer. If they do not complete the deal, follow the terms on the receipt, return or keep the deposit as written, and put the car back on the market the same day.

Turn the deposit into a sale

When the customer comes back, the deposit should be credited toward the deal. The final paperwork should show the deposit received, the remaining balance and how it was paid. If the customer is financing through an outside lender, note the lender and lien holder. Keep the original deposit receipt with the deal file.

Track deposits as their own number

Deposits are customer money you are holding, not income yet. Keep them separate in your books until the sale closes. At month end, check that the deposits you recorded match the cars marked on hold, and follow up on anything that has been sitting too long.

Handling a customer who goes quiet

Sooner or later a customer stops answering. Call and send a message before the hold expires, and note each attempt with the date. If the hold ends with no reply, follow the terms printed on the receipt and nothing else. Keeping a clear record of your attempts protects you if the customer later says they were never told the hold was ending.

How DMS Apex helps

DMS Apex lets you record a deposit against a vehicle, mark the car as Reserved so it is clearly on hold, and carry it into a pending sale and then a finished deal, cash or outside-financed, with trade-ins, co-buyers and lien holders. A deposits report shows what you are holding, and a pending sales report shows deals not yet final. Reports can be exported to Excel or CSV or printed. Each dealership has a private database. It is $28 per month flat with a 15-day free trial and no contract.