OMVIC Practice Test

Can sellers require a deposit before a vehicle sale?

1. No, it is prohibited

2. Yes, if terms are clearly stated

3. Only with bank approval

4. Yes, but only after the sale

The correct answer is: Yes, if terms are clearly stated

Sellers can indeed require a deposit before a vehicle sale, provided that the terms surrounding the deposit are clearly stated and agreed upon by both parties. This practice serves as a way to secure the buyer's intent to purchase, which can be particularly important in high-demand markets or when specific vehicles are being sold. Clarity in the terms is crucial; this includes detailing how the deposit will be applied to the purchase price, what happens to the deposit if the sale does not go through, and any conditions under which it may be refundable or non-refundable. This option ensures that both the seller and the buyer have a mutual understanding of the agreement, fostering transparency and reducing potential disputes related to the deposit in the transaction process. It differentiates legitimate practices in vehicle sales from those that may be misleading or lack proper regulation. In contrast, other options would imply restrictions or conditions that are not typically in line with standard practices in vehicle sales. For example, outright prohibiting deposits could inhibit normal sales procedures, while requirements for bank approval or limitations on timing (such as only after the sale) do not align with common practices as established in the industry.