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Ask for reservation fee instead of deposit to avoid distance-selling obligations, say legal experts – Car Dealer Magazine

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href="https://cardealermagazine.co.uk/publish/category/advice">Advice</a> &gt; <span class="breadcrumb_last" aria-current="page">Ask for reservation fee instead of deposit to avoid distance-selling obligations, say legal experts</span></span></span></span></p></div></div> <div class="container wide"> <div class="block1"> <section class="story header"> <div class="img-hold"> <img width="300" height="167" src="data:image/svg+xml,%3Csvg%20xmlns='http://www.w3.org/2000/svg'%20viewBox='0%200%20300%20167'%3E%3C/svg%3E" data-src="https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2021/04/Cars-on-Lookers-forecourt-in-Speke-1-Jun-2020-via-PA-300x167.jpg" class="story lead medium wp-post-image lazy" alt="Cars on Lookers forecourt in Speke, 1 Jun 2020, via PA" data-srcset="https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2021/04/Cars-on-Lookers-forecourt-in-Speke-1-Jun-2020-via-PA-300x167.jpg 300w, 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750w, https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2021/04/Cars-on-Lookers-forecourt-in-Speke-1-Jun-2020-via-PA-1140x633.jpg 1140w, https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2021/04/Cars-on-Lookers-forecourt-in-Speke-1-Jun-2020-via-PA.jpg 2000w" data-sizes="(max-width: 300px) 100vw, 300px" /><img width="580" height="322" src="data:image/svg+xml,%3Csvg%20xmlns='http://www.w3.org/2000/svg'%20viewBox='0%200%20580%20322'%3E%3C/svg%3E" data-src="https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2021/04/Cars-on-Lookers-forecourt-in-Speke-1-Jun-2020-via-PA-580x322.jpg" class="story lead large wp-post-image lazy" alt="Cars on Lookers forecourt in Speke, 1 Jun 2020, via PA" data-srcset="https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2021/04/Cars-on-Lookers-forecourt-in-Speke-1-Jun-2020-via-PA-580x322.jpg 580w, https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2021/04/Cars-on-Lookers-forecourt-in-Speke-1-Jun-2020-via-PA-300x167.jpg 300w, https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2021/04/Cars-on-Lookers-forecourt-in-Speke-1-Jun-2020-via-PA-768x427.jpg 768w, https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2021/04/Cars-on-Lookers-forecourt-in-Speke-1-Jun-2020-via-PA-1536x853.jpg 1536w, https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2021/04/Cars-on-Lookers-forecourt-in-Speke-1-Jun-2020-via-PA-150x83.jpg 150w, https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2021/04/Cars-on-Lookers-forecourt-in-Speke-1-Jun-2020-via-PA-500x278.jpg 500w, https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2021/04/Cars-on-Lookers-forecourt-in-Speke-1-Jun-2020-via-PA-600x333.jpg 600w, https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2021/04/Cars-on-Lookers-forecourt-in-Speke-1-Jun-2020-via-PA-750x417.jpg 750w, https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2021/04/Cars-on-Lookers-forecourt-in-Speke-1-Jun-2020-via-PA-1140x633.jpg 1140w, https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2021/04/Cars-on-Lookers-forecourt-in-Speke-1-Jun-2020-via-PA.jpg 2000w" data-sizes="(max-width: 580px) 100vw, 580px" /></div> <div class="post title"> <p class="category label "><span><a href="https://cardealermagazine.co.uk/publish/category/advice" rel="category tag">Advice</a></span></p> <h1 class="story title">Ask for reservation fee instead of deposit to avoid distance-selling obligations, say legal experts</h1> <div class="summary"> </div> </div> </section> <section class="col-1"> <article class="single"> <div class="carde-headline-banner" id="carde-1512870334"><a data-bid="1" href="https://cardealermagazine.co.uk/publish/linkout/307138" target="_blank"><div style="text-align:center;"><img class="lazy" src="data:image/svg+xml,%3Csvg%20xmlns='http://www.w3.org/2000/svg'%20viewBox='0%200%20600%2090'%3E%3C/svg%3E" data-src="https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2024/09/Car-Dearler-600X90_FINAL.gif" width="600px" height="90px" style="width:100%; max-width:600px; height:auto" alt="Advert" /></div> </a></div> <div class="post meta"> <div class="details"> <p class="author"><a href="https://cardealermagazine.co.uk/publish/author/john-bowman" title="Posts by John Bowman" rel="author">John Bowman</a></p> <p class="date"><img src="data:image/svg+xml,%3Csvg%20xmlns='http://www.w3.org/2000/svg'%20viewBox='0%200%2012%2012'%3E%3C/svg%3E" data-src="https://cardealermagazine.co.uk/publish/wp-content/themes/cardealer2021v1_1/fontawesome/svg/clock-regular-black.svg" alt="Time" class="clock lazy" width="12px" height="12px" /> 9:15 am, April 9, 2021</p> </div> <div class="share"> <p>Share</p> <ul class="social-icons"> <li class="social button facebook"><a target="_blank" 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href="https://www.linkedin.com/shareArticle?mini=true&url=https://cardealermagazine.co.uk/publish/ask-for-reservation-fee-instead-of-deposit-to-avoid-distance-selling-obligations-say-legal-experts/220879" rel="noreferrer" aria-label="Share this post on LinkedIn"> <svg xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink" width="15px" height="17px" viewBox="0 0 15 17" version="1.1" class="linkedin single"> <g id="linkedin3"> <path style=" stroke:none;fill-rule:nonzero;fill:currentColor" d="M 3.359375 14.875 L 0.246094 14.875 L 0.246094 4.945312 L 3.359375 4.945312 Z M 1.800781 3.589844 C 0.804688 3.589844 0 2.773438 0 1.785156 C 0 0.800781 0.804688 0 1.800781 0 C 2.796875 0 3.601562 0.800781 3.601562 1.785156 C 3.601562 2.773438 2.796875 3.589844 1.800781 3.589844 Z M 14.996094 14.875 L 11.894531 14.875 L 11.894531 10.039062 C 11.894531 8.886719 11.871094 7.410156 10.277344 7.410156 C 8.660156 7.410156 8.410156 8.664062 8.410156 9.957031 L 8.410156 14.875 L 5.304688 14.875 L 5.304688 4.945312 L 8.289062 4.945312 L 8.289062 6.296875 L 8.332031 6.296875 C 8.746094 5.519531 9.761719 4.695312 11.273438 4.695312 C 14.421875 4.695312 15 6.75 15 9.417969 L 15 14.875 Z M 14.996094 14.875 "/> </g> </svg> </a></li> </ul> </div> </div> <div class="post content"> <p><strong>Dealers can avoid distance-selling obligations by asking for a reservation fee instead of a deposit.</strong></p> <p>That’s the advice from experts at automotive legal consultancy Lawgistics in their latest update as showrooms in England and Wales prepare to reopen on April 12.</p> <p>Legal adviser Nona Bowkis said that with the gradual return to a normal way of trading, a reservation fee taken by phone or online after the vehicle has been physically seen by the customer means any deal is done on the showroom premises.</p><div class="carde-4-mid-page-600px-within-content_2" style="text-align: center; " id="carde-1955675214"><a data-bid="1" href="https://cardealermagazine.co.uk/publish/linkout/299713" target="_blank"><img class="lazy" src="data:image/svg+xml,%3Csvg%20xmlns='http://www.w3.org/2000/svg'%20viewBox='0%200%20600%2090'%3E%3C/svg%3E" data-src="https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2024/03/000000-DA-Q1-Buyer-Gifs-2024-600x90-1.gif" width="600px" height="90px" alt="Advert" /> </a></div><br style="clear: both; display: block; float: none;"/> <p>She pointed out that the fee doesn’t commit a buyer to a purchase, whereas a deposit does.</p> <p>Dealers were barred from trading from showrooms during lockdown and could only respond to remote orders, which meant that all sales were classed as distance sales.</p> <p>Bowkis commented: ‘A distance sale is classed as a distance sale if it is part of an “organised distance sales scheme.”</p><div class="carde-5-mid-page-600px-within-content_2" style="text-align: center; " id="carde-1672139914"><a data-bid="1" href="https://cardealermagazine.co.uk/publish/linkout/308029" target="_blank"><img class="lazy" src="data:image/svg+xml,%3Csvg%20xmlns='http://www.w3.org/2000/svg'%20viewBox='0%200%20600%2090'%3E%3C/svg%3E" data-src="https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2024/09/600-x-90px.gif" width="600px" height="90px" alt="Advert" /> </a></div><br style="clear: both; display: block; float: none;"/> <p>‘Therefore, if car dealers return to traditional forecourt sales and only very occasionally deliver a vehicle to a customer on a “sight unseen” basis, those occasional deals will not count as a distance sale.</p> <p>‘However, if a dealer is offering deliveries on their website as a general option, this would be a distance sale and viewed as part of how the dealer operates.</p> <p>‘For those car dealers not offering deliveries, a sale will only be a distance sale if the customer commits to purchase before ever laying eyes on the vehicle.</p> <blockquote><p>‘A deposit commits a buyer to a purchase whereas a reservation fee doesn’t.</p></blockquote> <p>‘So, if you take an online deposit, this would be a distance sale, which allows the customer the 14 days period in which they can return the car for essentially any reason, including because they just don’t like it.’</p> <p>But, she said: ‘If you take an online reservation fee, the customer has not committed to purchase and they can change their mind.</p> <p>‘In this scenario, the customer only commits when they pay a deposit or the full price once they have seen the vehicle and therefore it’s not a distance sale.’</p><div class="carde-mid-content-motorway" id="carde-527050438"><a data-bid="1" href="https://cardealermagazine.co.uk/publish/linkout/308669" target="_blank"><img class="lazy" src="data:image/svg+xml,%3Csvg%20xmlns='http://www.w3.org/2000/svg'%20viewBox='0%200%20600%2090'%3E%3C/svg%3E" data-src="https://dotyumzonirqv.cloudfront.net/publish/wp-content/uploads/2024/10/NEW-600x180-100.jpg" width="600px" height="90px" alt="Advert" /> </a></div> <p>Car dealerships in Northern Ireland that are outdoors will also be allowed to open as of April 12.</p> <ul> <li><a href="https://chat.whatsapp.com/KXvhidsoLvtDLsUJGdjpOr"><strong>Join our breaking news WhatsApp group</strong></a></li> <li><a href="https://podcasts.apple.com/gb/podcast/car-dealer-podcast/id1546759512#episodeGuid=cc60ded4-3e9f-4708-8463-2e87280df347"><strong>Listen to the latest Car Dealer Podcast</strong></a></li> <li><a href="https://cardealermagazine.co.uk/publish/car-dealer-top-100-the-list-in-full/211062"><strong>List of the Top 100 profitable car dealers in the UK</strong></a></li> </ul> <div class="carde-after-content-3-mag-embed" id="carde-1519278139"><style>.embed-container { position: relative; padding-bottom: 56.25%; height: 0; overflow: hidden; max-width: 100%; } .embed-container iframe, .embed-container object, .embed-container embed { position: absolute; top: 0; left: 0; width: 100%; height: 100%; }</style> <div 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class="author bio words"> <p>John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.</p> </div> </section> <div class="ads"> <div class="carde-after-bio-2-manual" id="carde-1813732750"><br><br> <script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script><script async src="https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js?client=ca-pub-8394745914545765" crossorigin="anonymous"></script> <!-- Bottom of posts --> <ins class="adsbygoogle" style="display:block" data-ad-client="ca-pub-8394745914545765" data-ad-slot="5576235479" data-ad-format="auto" data-full-width-responsive="true"></ins> <script> (adsbygoogle = window.adsbygoogle || []).push({}); </script></div> </div> </section> <section class="recirc"> <h4 class="more stories">More stories...</h4> <ul class="recirc"> <li class="advert wrap side mobile"> <div class="carde-1-wrap-side-mobile" id="carde-511784480"><a data-bid="1" 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