Commissioner's blog: Driving down the cost to cancel car contracts
Anyone who’s tried to cancel a contract to buy a new or used car may recall being slugged with a fee from the dealer for pulling out of the deal.
Known as ‘pre-estimated liquidated damages’, the fee is supposed to be a true reflection of actual costs incurred by the dealership as a result of the transaction falling through, such as vehicle licensing costs, special accessories that may have been fitted and demonstrable administration costs.