When you’re in the process of buying a car, it’s really important to know the difference between a quote and an offer-to-purchase agreement, which is a binding contract.
“Consumers seem to think that signing an offer-to-purchase is the same thing as signing a quote, and that’s not the case,” an exasperated dealer principal told me not long ago, holding yet another cancelled deal in his hand.
“It’s time all dealerships took a stand when consumers renege on OTPs,” he said. “It’s getting out of hand.”
Motor Industry Ombud Johan van Vreden agrees.
“We get complaints about this virtually on a daily basis,” he told me.
“Buyers find a car for a few thousand, or in some cases even just a few hundred rand less, and then want to cancel a legitimately entered-into contract,” he said.
“It is my opinion that a motor dealership is completely within its rights to demand that the agreement is honoured by the buyer. The only way for the buyer to resolve the situation is by negotiating with the motor dealer and hope for a goodwill response.”
On the flipside, I also hear from consumers who’ve signed an OTP, only to have the dealership renege on the deal and sell the car to someone else, presumably for a better price.
And then they claim the car was mistakenly sold by another salesman, or refer to the signed OTP as some form of preliminary document, not binding on them.
Last month, Shaun Subbadu signed an OTP with the Halfway Toyota dealership in Scottburgh on KZN’s South Coast, for a trade-in of his Quest sedan for a newer “demo” model of the same car.
The trade-in price was noted on the agreement as R160 000, with the purchase price of the replacement Quest being R185 000.
“They did not see my vehicle – they based the trade-in amount on photos I e-mailed them, along with full and accurate details of the model,” Subbadu said.
When a week passed with no feedback, Subbadu contacted the salesman and was told there was a snag in that they’d made a mistake with the trade-in price – basing it on a 2016 model instead of a 2015 one in error – and they were dropping it by R10000.
“I couldn’t accept this as I’d budgeted according to that OTP and taken out a loan specifically to fund the difference.
“My communication with the dealership has fallen on deaf ears.
“Surely if it were the other way around, the dealership would hold the customer accountable?”
I took up the case with the dealership, and a trainee sales manager responded to say that the trade-in price was an “estimate”, subject to review and not binding because Subbadu’s Toyota hadn’t yet been evaluated at the time. But Van Vreden confirmed to me that as both Subbadu and a dealership representative had signed that OTP, it was binding on both parties.
“Given that the car in question has since been sold, the dealership is obliged to source a similar one and offer the consumer a similar or better deal,” he said.
I’m happy to report that that’s exactly what the dealership has done. Subbadu was offered another 2017 Quest with lower mileage than the previous one, for the same price, and with a trade-in for his vehicle remaining at R160000.
“The deal will remain the same and the client gets the benefit of low mileage as well,” a dealership spokesman told me.
Subbadu was delighted to accept and at the time of writing, the deal was being concluded. Moral of the story: the “legally binding document” thing works both ways. And that applies to agreements to buy property as well. Fair’s fair.
#SHELFIE
Those Cape Town bars and restaurants that are cashing in on the water restrictions by refusing to serve their patrons tap water, would do well to check out Clause 4.7 of their liquor licences.
The Liquor Act states: “Free drinking water, which includes tap water, must be made easily available at all on-consumption liquor outlets to patrons.”
My thanks to restaurant blogger Dax Villanueva for pointing that out.
“I was charged an additional R7 for a small glass of tap water at Cape to Cuba in Kalk Bay when I asked for one with my cocktail the day before New Year, “The Witty Wine Woman” tweeted.
“I didn’t feel like fighting, so I just paid.”
A Cape to Cuba spokesman told me that the restaurant had since stopped charging for tap water.
“It was a genuine attempt to do our bit for water saving; it wasn’t about boosting our turnover,” she said. “We are getting bottled water from Durban, and selling it at R12 a bottle.”
The Power & the Glory restaurant in Tamboerskloof caused a bit of a Twitter stir with its notice “Due to Cape Town’s water restrictions, we are no longer offering tap water”, but a spokesman told me that was “a misunderstanding”.
“We choose to give them free bottled water instead,” she said. “We’ve never denied any of our customers free water.”
In that case, one wonders why they felt the need to display that sign at all.
So there you have it, licensed Cape Town establishments: if you want to do your bit for the water crisis by denying your customers tap water, be prepared to sponsor their bottled water.
And then follow through by using bottled water in the teas and coffees you serve, too, surely?
CONTACT WENDY:
E-mail: consumer@knowler.co.za
Twitter: @wendyknowler
Honouring offer-to-purchase must work both ways
“Consumers seem to think that signing an offer-to-purchase is the same thing as signing a quote, and that’s not the case,” an exasperated dealer principal told me not long ago, holding yet another cancelled deal in his hand.
“It’s time all dealerships took a stand when consumers renege on OTPs,” he said. “It’s getting out of hand.”
Motor Industry Ombud Johan van Vreden agrees.
“We get complaints about this virtually on a daily basis,” he told me.
“Buyers find a car for a few thousand, or in some cases even just a few hundred rand less, and then want to cancel a legitimately entered-into contract,” he said.
“It is my opinion that a motor dealership is completely within its rights to demand that the agreement is honoured by the buyer. The only way for the buyer to resolve the situation is by negotiating with the motor dealer and hope for a goodwill response.”
On the flipside, I also hear from consumers who’ve signed an OTP, only to have the dealership renege on the deal and sell the car to someone else, presumably for a better price.
And then they claim the car was mistakenly sold by another salesman, or refer to the signed OTP as some form of preliminary document, not binding on them.
Last month, Shaun Subbadu signed an OTP with the Halfway Toyota dealership in Scottburgh on KZN’s South Coast, for a trade-in of his Quest sedan for a newer “demo” model of the same car.
The trade-in price was noted on the agreement as R160 000, with the purchase price of the replacement Quest being R185 000.
“They did not see my vehicle – they based the trade-in amount on photos I e-mailed them, along with full and accurate details of the model,” Subbadu said.
When a week passed with no feedback, Subbadu contacted the salesman and was told there was a snag in that they’d made a mistake with the trade-in price – basing it on a 2016 model instead of a 2015 one in error – and they were dropping it by R10000.
“I couldn’t accept this as I’d budgeted according to that OTP and taken out a loan specifically to fund the difference.
“My communication with the dealership has fallen on deaf ears.
“Surely if it were the other way around, the dealership would hold the customer accountable?”
I took up the case with the dealership, and a trainee sales manager responded to say that the trade-in price was an “estimate”, subject to review and not binding because Subbadu’s Toyota hadn’t yet been evaluated at the time. But Van Vreden confirmed to me that as both Subbadu and a dealership representative had signed that OTP, it was binding on both parties.
“Given that the car in question has since been sold, the dealership is obliged to source a similar one and offer the consumer a similar or better deal,” he said.
I’m happy to report that that’s exactly what the dealership has done. Subbadu was offered another 2017 Quest with lower mileage than the previous one, for the same price, and with a trade-in for his vehicle remaining at R160000.
“The deal will remain the same and the client gets the benefit of low mileage as well,” a dealership spokesman told me.
Subbadu was delighted to accept and at the time of writing, the deal was being concluded. Moral of the story: the “legally binding document” thing works both ways. And that applies to agreements to buy property as well. Fair’s fair.
#SHELFIE
Those Cape Town bars and restaurants that are cashing in on the water restrictions by refusing to serve their patrons tap water, would do well to check out Clause 4.7 of their liquor licences.
The Liquor Act states: “Free drinking water, which includes tap water, must be made easily available at all on-consumption liquor outlets to patrons.”
My thanks to restaurant blogger Dax Villanueva for pointing that out.
“I was charged an additional R7 for a small glass of tap water at Cape to Cuba in Kalk Bay when I asked for one with my cocktail the day before New Year, “The Witty Wine Woman” tweeted.
“I didn’t feel like fighting, so I just paid.”
A Cape to Cuba spokesman told me that the restaurant had since stopped charging for tap water.
“It was a genuine attempt to do our bit for water saving; it wasn’t about boosting our turnover,” she said. “We are getting bottled water from Durban, and selling it at R12 a bottle.”
The Power & the Glory restaurant in Tamboerskloof caused a bit of a Twitter stir with its notice “Due to Cape Town’s water restrictions, we are no longer offering tap water”, but a spokesman told me that was “a misunderstanding”.
“We choose to give them free bottled water instead,” she said. “We’ve never denied any of our customers free water.”
In that case, one wonders why they felt the need to display that sign at all.
So there you have it, licensed Cape Town establishments: if you want to do your bit for the water crisis by denying your customers tap water, be prepared to sponsor their bottled water.
And then follow through by using bottled water in the teas and coffees you serve, too, surely?
CONTACT WENDY:
E-mail: consumer@knowler.co.za
Twitter: @wendyknowler
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending Now
Latest Videos