Money transfer fraud is on the increase and deposits for new vehicles can be an easy target for crooks.
Disputes can sometimes arise as well. Fortunately, help is at hand to take the worry and stress out of it all for buyers and dealers.
Depositmate is a holding service that makes everything to do with the process easy and transparent. Here, we find out more…
Tell us about Depositmate
The idea arose after we realised there is no financial service out there specifically catering for deposits and that this absence is exploited by fraudsters using fake classified listings.
In addition, despite being a common financial transaction, there is great inconsistency in terms of how and when deposits are used.
We spoke to the Financial Conduct Authority, which was very supportive, and went on to achieve registration in 2019.
How does it work for car dealerships?
When a customer calls a dealership wanting to secure a vehicle, all the salesperson needs is the customer’s email address to get started.
From there, he or she can create a deposit request in around 30 seconds. The customer then gets an email inviting them to review the terms and place the deposit.
So who do they send the deposit to?
The customer transfers the deposit to Depositmate, we keep it safe and let everyone know it has been placed, immediately providing both parties with their bespoke contract.
The salesperson can then confidently remove the vehicle from the market, as he or she knows that the customer is financially committed.
What is in the contract?
This is the beauty of our service in that users create and agree to their own terms.
From a vehicle sale point of view, along with stating the usual vehicle details the salesperson can rule out haggling by confirming the sale price and confirm the date by which the sale must be completed.
What about refunds?
The customer is committed and will have acknowledged a disclaimer that states they have satisfied themselves in terms of the condition via photographs, video or independent inspection, and that they are aware they are liable to lose the deposit should they not proceed.
With that said however, any dealership can approve a refund if they feel fit, but that is something for the dealership to consider.
How do dealerships claim the deposit?
Once the transaction is complete or the customer fails to keep to the terms of the contract, the dealership simply requests release on our platform.
This request will initially go to the customer to approve. If they do not, then that is when we get involved.
How do disputes work?
In the unlikely event of a dispute, both parties can supply an explanation and upload images. We will then review what was agreed.
As the contracts are clear, disputes are easy to adjudicate.
What does it cost?
Our fee is removed from the deposit total, so a dealership would only incur the small cost if they either
- Secure a sale of a vehicle, or
- The deposit was awarded to them in a dispute
Our fee is five per cent of the deposit amount as opposed to the total price, so represents a tiny fraction of the overall sale.
Is there anything else that dealers need to know?
Depositmate was built with the vehicle industry in mind to provide commitment and protection to dealerships while helping them secure more sales.
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