What Car? Q&A - Can I cancel my new car order?

Q: I have put a deposit on a brand new car, but I'm not happy with the deal and would like to pull out. Can I change my mind, or am I obliged to buy the car?
Michelle Ramshaw

A: Unfortunately, you're going to at least lose your deposit. Once a contract of sale has been entered into, neither party can simply 'cancel', but this does not mean to say that you now have to buy the car. As soon as you sign an order form, you enter a binding contract of sale. Your only options are then to continue with the contract, or put yourself in breach of contract by 'refusing to accept'.

If you 'refuse to accept' you will be liable for damages to the dealer for non-acceptance under the Sale of Goods Act 1979. The amount of these damages will be the difference between the contract price, (the price agreed between you and the dealer), and the market price, as well as any losses the seller has incurred in reliance on the sale, (for example administration costs, special alterations to the order and so on).

With mass-produced cars, the contract price is normally more or less the same as the market price, and the deposit will usually cover any losses.