OMVIC Practice Test

List two costs a dealer can take out of the deposit if a customer backs out of a deal.

1. More advertising, storage

2. Cleaning

3. Another safety standard certificate

4. Sales training

The correct answer is: More advertising, storage

A dealer is permitted to deduct certain costs from a customer's deposit if the customer decides to back out of a deal. In this case, the costs related to more advertising and storage are valid deductions. When a dealer commits to selling a vehicle, they often incur expenses to market it effectively and ensure it remains available for interested buyers. If a deal falls through, the dealer may have incurred additional advertising costs to attract potential buyers to the specific vehicle in question. This includes things like paid search advertisements, online listings, or print ads specifically for that vehicle. Furthermore, storage costs can also be relevant. When a vehicle is taken off the market for a potential sale and then the deal does not proceed, the dealer must continue to pay for the space to store that vehicle until it is sold to someone else. This can include costs for a dealership's lot fees or any extra costs associated with keeping the vehicle in optimal condition during that storage period. Both of these costs are justifiable deductions from a deposit, as they stem directly from the circumstances of the failed transaction.