Can a car dealer keep your deposit?

Only sometimes. It depends on what you agreed to in writing, who backs out, and why. Don't assume you can get it back just because you changed your mind. New York's attorney general says many buyers wrongly expect a refund when they decide not to buy.

Federal law won't help with a change of mind, either. The FTC says federal law doesn't require dealers to give you 3 days to cancel. So the answer comes from three things:

• What the paper says. “Non-refundable,” “refundable under these conditions,” and “fully refundable” mean very different things. A spoken promise is hard to prove.
• Who backs out, and why. Walking away because you changed your mind is different from the dealer rejecting your offer, failing to deliver the car, or changing the deal.
• Your state. Some states set refund rules or limit what a dealer can keep. See the deposit rules by state.

Does a deposit count toward your down payment? If you buy the car, it should. Before you sign, check that the deposit shows up as a credit on your buyer's order and your contract.

A deposit should come back when the problem is on the dealer's side, the deal never became final, or nothing you signed lets the dealer keep it. These are the common cases:

• The dealer turns down your offer, or never accepts it. Pennsylvania, Massachusetts, Ohio, and Wisconsin require a refund in this case.
• You back out before the dealer accepts your offer. In Pennsylvania and Massachusetts, you get your full deposit back if you cancel before the dealer accepts the deal. In Wisconsin, you can take back your offer until the dealer accepts it, and the deposit comes back. In New York, a new-car dealer that takes a deposit without a written contract must give you a form saying you get a full refund if you decide not to buy.
• The dealer sells the car or can't deliver the one you agreed on. In Pennsylvania and Massachusetts, a dealer that doesn't deliver a car matching the contract must promptly refund your full deposit. See if the dealer sold the car.
• An ordered car is late. Some states let you cancel for a full refund after a set delay. See how long a dealer can hold your deposit.
• The loan falls through. If the dealer can't get your loan approved on the terms you agreed to, the CFPB says you don't have to accept different financing, and the dealer should refund your down payment. If you were getting your own loan, count on a refund only if your written deal said it depended on that loan. (In California, it's enough that the dealer knew you planned to get your own loan.) California, Illinois, Maryland, Massachusetts, Oregon, Pennsylvania, Texas, Virginia, Washington, and Wisconsin put a version of this in law.
• The dealer raises the price. In Ohio, if a dealer raises the price (except for a change in freight charges), you can cancel instead of paying more, and the dealer must make your deposit refund available right away.
• Nothing you signed says the deposit is non-refundable. Then you have a good case for getting it back. The Georgia attorney general's consumer protection office says that when the contract, the receipt, or a policy posted at the dealership doesn't say otherwise, the dealer should have to refund it. In Florida and Ohio, taking a deposit without a written receipt that says whether it's refundable is against the law. (Florida's rule covers deposits taken before you have a binding contract.) That doesn't send the money back by itself, but it gives you a strong reason to ask for it and to complain to your attorney general. New York's attorney general says you may be able to cancel if the dealer didn't clearly post its refund policy.
• The written terms promise a refund. Hold the dealer to them, and quote the exact words when you ask.

The details, and which cars each rule covers, are in the deposit rules by state.

Often, yes. If you signed clear terms saying the deposit isn't refundable, the dealer accepted your offer and did what it promised, and you walk away for a reason those terms don't allow, expect to lose it. Changing your mind, finding a better deal elsewhere, or deciding the payment is too high usually won't get it back.

Backed out before the dealer accepted your offer? Some states make it refund you; see when you should get it back. And in California, most used cars bought or leased from a dealer for $50,000 or less come with 3 days to cancel, starting the day after you sign the contract, as long as you haven't driven the car more than 400 miles. The dealer can keep a capped restocking fee. See how California's 3 days work.

Paying a deposit doesn't, on its own, mean you've bought the car. If you signed a purchase contract or buyer's order, though, read what it says happens if you don't take the car: it may let the dealer keep the deposit or charge a penalty.

Even then, some states limit what a dealer can keep, or what it can tell you about it:

• Pennsylvania and Massachusetts: a clause that lets the dealer keep your deposit is allowed only if it names a specific dollar amount, is clear and easy to see, and you initialed it.
• Wisconsin: any penalty for not taking the car must be stated right above where you sign the contract, and it can't be more than 5% of the cash price.
• Illinois: if the sale depended on your credit and the seller turns down your credit application, it can't keep any of your down payment, not even as a credit-check fee.
• California: if you planned to finance through the dealer and the finance contract was never signed, the dealer must refund any payment you made while it was pending. And since October 1, 2026, a dealer can't mislead you about whether it will keep your down payment or trade-in, or charge you fees, if the deal isn't finalized or you don't go through with it. See what else California's CARS Act bans.

Did a salesperson promise a refund that the paper doesn't mention? Write down exactly what was said, when, and by whom, and include it when you ask for your money back. A spoken promise is much harder to enforce than a written one, which is why the FTC says to get every promise in writing.

It shouldn't, if it agreed to hold the car for you and the hold hasn't run out. If it sells the car anyway, it can't deliver the car you paid to hold, so ask for your full deposit back in writing. Some states spell this out:

• Ohio: a deposit on a one-of-a-kind car, like a specific used car, means the dealer can't offer it to anyone else during the hold period on your receipt. (Administrative Code 109:4-3-07)
• Wisconsin: a dealer can't sell the car to anyone else while your offer is waiting for an answer. (Trans 139.05)
• Pennsylvania and Massachusetts: a dealer that doesn't deliver the car in your contract must promptly refund your full deposit. (37 Pa. Code §301.4, 940 CMR 5.04)

If the hold date on your receipt has passed, or you stopped answering the dealer, it can usually sell the car, and if your terms say the deposit is non-refundable, it may keep that too. While a hold is running, keep in touch in writing. If the dealer says the car “just sold” and pushes you toward a pricier one, see if they take your deposit, then push a different car.

These are the state rules we found that deal with car deposits directly. They apply on top of what your paperwork says. Most cover dealer sales only, not private sellers.

• California: if you pay money toward a car you're financing through the dealer and the finance contract is never signed, the dealer must refund it. If the dealer knew you planned to get your own loan and you couldn't, the deal is canceled automatically, and you and the dealer each give back what you received. Most used cars bought or leased from a dealer for $50,000 or less also come with 3 days to cancel, starting the day after you sign the contract, and get your money back, minus a capped restocking fee, as long as you haven't driven the car more than 400 miles. See how to cancel. A dealer also can't mislead you about whether it will keep your down payment or trade-in. (Civil Code §2982.7, §2982.9, §1784.43, §1784.40)
• Connecticut: the signed order and the invoice must label your deposit with one of three phrases: “No Refund of Deposit,” “Conditional Refund of Deposit” followed by the conditions, or “Unconditional Refund.” The state's consumer protection department says there's no 3-day cancellation period for car purchases. (General Statutes §14-62, Department of Consumer Protection)
• Florida: before you have a binding contract, a dealer can't take a deposit unless it gives you a written receipt that says the amount, how long it will hold the car, and clearly whether you can get the deposit back and on what conditions. (Statutes §501.976(10))
• Illinois: if a sale depends on your credit and the seller rejects your application, it must return your whole down payment. Keeping any part of it, as a credit-check fee or for any other reason, is unlawful. (815 ILCS 505/2C)
• Maryland: if you took the car home on dealer-arranged financing and the lender doesn't approve the terms, the dealer must tell you in writing within 4 days of delivery. You then have 2 days to bring the car back in the same condition, apart from normal wear and tear; if you don't, the dealer can repossess it. If you and the dealer don't agree on new terms, either of you can cancel, and the dealer must return your down payment, your trade-in, and the fees and taxes you paid, and can't charge you for using the car. You can't sign these rights away. (Transportation Article §15-311.3)
• Massachusetts: for a car bought mainly for personal, family, or household use, the deposit rules match Pennsylvania's below, including the 8-week delivery default and the limits on clauses that let a dealer keep your deposit. (940 CMR 5.04)
• New York: a new-car dealer that takes a deposit without a written sales contract must give you a form to sign that says it isn't an order and that you can get a full refund if you decide not to buy. If you sign a contract for a new car, it must show an estimated delivery date. If the car is more than 30 days late, you can cancel for a full refund, unless you caused the delay. For any car, the attorney general says there's generally no right to cancel unless the dealer didn't clearly post its refund policy. But if the dealer is arranging your loan and you haven't picked up the car, you can cancel before you sign the finance agreement and get a full refund. (General Business Law §396-p, Attorney General)
• Ohio: if a dealer hasn't accepted your offer within 4 working days of taking your deposit, it must make the refund available right away. The same goes if the dealer raises the price (except for a change in freight charges) and you cancel. Any business that takes a deposit must give you a dated receipt that describes the car, gives its price, says how long any hold lasts, and states whether the deposit is refundable and on what conditions. (Administrative Code 109:4-3-16, 109:4-3-07)
• Oregon: if you take a car home for personal use on financing or a lease the dealer arranged, and within 10 calendar days no lender agrees to buy it on the exact terms you negotiated, the dealer must either honor your deal on those terms or cancel it. If it cancels, you return the car and it must return everything of value you gave it. (ORS 646A.090)
• Pennsylvania: the dealer must promptly refund your full deposit if any of these happen: you cancel before the dealer accepts the contract; the dealer doesn't accept it; your contract depends on financing you choose and you can't get it after making a reasonable effort; or the dealer doesn't deliver a car that matches the contract. You also get it back if you cancel because delivery is late: past the date in the contract or, if it sets none, 8 weeks, unless the delay is beyond the dealer's and the carmaker's control. A clause that lets the dealer keep your deposit must name a specific dollar amount, be clear and easy to see, and have your initials next to it. (37 Pa. Code §301.4)
• Texas: there's no 3-day right to cancel. But if a dealer lets you take a car home under a conditional delivery agreement while your financing is worked out (it can last no more than 15 days) and you never sign the finance contract, the dealer must return your down payment and your trade-in, or pay the trade-in's agreed value, within 7 days after the agreement ends. You must bring the car back in substantially the same condition. The state's consumer credit commissioner can order the dealer to pay. (Finance Code §348.013, Attorney General)
• Virginia: if you take a car home on dealer-arranged financing that isn't approved, you or the dealer can cancel. You return the car within 24 hours of being told, and the dealer must return your down payment and trade-in. (Code §46.2-1530)
• Washington: if your contract is waiting on the dealer's acceptance or on a condition like financing, the dealer has 4 business days to either accept it with no conditions left or reject it. If it rejects it, it must refund your down payment and return your trade-in, though if you already have the car, it can wait until you bring it back. A dealer must keep deposits for cars you haven't taken delivery of in a separate trust account. (RCW 46.70.180, Attorney General)
• Wisconsin: the dealer must accept or reject your written offer within 2 working hours, or the offer is canceled automatically, and it can't sell the car to anyone else while it decides. You can take back your offer until the dealer accepts it. If the dealer rejects your offer, it must return your deposit within those 2 hours, or, if you're not there, hand it back or mail it the next business day. If your contract depends on financing and you can't get acceptable financing, you can cancel and get your full down payment back within one business day, with no penalty. (Trans 139.05)

No deposit law found: in many states, including New Jersey, we didn't find a law written just for car deposits, so the written terms and your state's general consumer protection law decide. In 2014, New Jersey's attorney general settled with eight dealerships after consumers alleged, among other things, that the dealerships didn't refund deposits in a timely way after buyers canceled or were denied financing.

How fast does the refund have to come? No federal rule sets a deadline. In the cases their rules cover, Wisconsin requires the refund within one business day once you cancel over financing or a late car, Ohio says the dealer must make it available right away, and Pennsylvania and Massachusetts say promptly. Anywhere else, put a specific date in your written request.

How long can the dealer hold the car? No national rule sets a time limit. Your receipt should say how long the dealer will hold the car. In Ohio it must, and in Florida it must if you pay before you have a binding contract. If yours doesn't, ask for a date in writing before you pay.

Waiting for the dealer to accept your offer? Some states set a clock: 2 working hours in Wisconsin, 4 working days in Ohio, and, for contracts waiting on the dealer's acceptance or a condition like financing, 4 business days in Washington.

Ordered a car that hasn't arrived? Find the delivery date on your order. Then:

• New York (new cars): if the car is more than 30 days past the estimated delivery date, you can cancel for a full refund, unless you caused the delay.
• Wisconsin: if the car isn't available within 15 days after the expected delivery date, for any reason, you can cancel, and the dealer must refund your down payment within one business day.
• Pennsylvania and Massachusetts: if the dealer misses the delivery date in your contract, or 8 weeks when the contract sets none, you can cancel for a full refund, unless the delay is beyond the dealer's and the carmaker's control. Both states also bar a dealer from promising a delivery date it knows, or should know, it can't meet.

Paid a reservation fee? Some dealers and carmakers call money down on a car that isn't built yet a reservation. Read its refund terms the same way you would a deposit's, and get them in writing.

Ask for the deposit agreement and read it before any money changes hands. It should list:

• The car, with its VIN (the car's 17-character ID number) if the dealer has it.
• The amount, and what it's for: holding a car on the lot or ordering one.
• How long the dealer will hold the car, or when an ordered car should arrive.
• Whether the deposit is refundable, and every reason the dealer could keep it.
• Any conditions, like the price, your trade-in value, loan approval, an inspection, or the delivery date.
• How to cancel, and when and how you'll get your money back.

Some states already require much of this. Ohio's rule calls for a dated receipt that describes the car, gives the price, says how long any hold lasts, and states whether the deposit is refundable and on what conditions. In Connecticut, look next to the deposit for one of three labels: “No Refund of Deposit,” “Conditional Refund of Deposit,” or “Unconditional Refund.”

Make sure the agreement names the right car. Fill in every blank. Cross out anything you didn't agree to, have both sides initial any changes, and take a full copy right away. The FTC's used-car Buyers Guide tells you to get every promise in writing, and it warns that spoken promises are hard to enforce. Keep the deposit small, and pay by credit card if you can: debit cards, cash, and checks don't give you the same dispute rights.

Some dealers take a deposit on an advertised car, then say it isn't available and steer you to a pricier one. The FTC's Guides Against Bait Advertising list this as a sign the sale wasn't made in good faith. So is failing to deliver the advertised product in a reasonable time, or failing to give a refund.

You don't have to switch. Ask for your deposit back in writing, and see what to do about a bait and switch.

1. Ask in writing. Say what you paid and when, why you're owed a refund, the amount, and a deadline. Cancel the way the agreement says to, if it says how. Keep a copy and proof you sent it, like a certified-mail receipt.
2. Keep the signed terms, the receipt, every message, and a short timeline of who said what and when.
3. Paid by credit card? Don't let the dealer's delays use up your dispute deadline. The FTC says billing errors include charges for things that weren't delivered as agreed. Your written dispute must reach the card company within 60 days after it sent the first statement with the charge. The clock starts with that statement, not with the dealer's answer, so if the deadline is close, send the dispute while you're still waiting on the dealer. If it has already passed, ask your card company anyway, and see the next step. Send your dispute to the address for billing questions, not the one for payments. The card company decides the outcome.
4. Still owe the card company for that charge? Federal rules may also let you hold back what you still owe on it while you dispute it with the dealer, with no 60-day deadline. This works only if the charge is over $50, you made it in your home state or within 100 miles of your mailing address, and you tried first to settle it with the dealer. See the CFPB's explanation.
5. Paid by debit card? The FTC says debit card protections are different, and you may not be able to get a refund when something isn't delivered. Ask your bank anyway; some offer their own protections.
6. File a complaint with your state attorney general or consumer protection office, and with the state agency that licenses dealers, which is often the DMV. California's DMV, for example, takes complaints about licensed dealers. A licensing agency mainly acts against a dealer's license and may not be able to get your money back. The Texas DMV, for example, says it can't bring a private damages claim for you, though after a hearing that finds a violation, its board can order the dealer to refund you (Occupations Code §2301.807). You can also report the dealer to the FTC at ReportFraud.ftc.gov.
7. Still no refund? Consider small claims court. It's built for smaller disputes like this one, and New Jersey's courts say most people can file and present their cases without a lawyer. Limits vary by state: $5,000 in New Jersey and up to $10,000 for a person in Washington, for example.