Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.

Putting down a deposit for a used car

Looking to save by purchasing a used car? Here's everything you need to know about deposits.

If you’re in the hunt for a used car or you’ve already found the vehicle you want to buy, you may be wondering if you need to leave a deposit. Both private sellers and used car dealerships may ask for a deposit, so it’s important to know how much you’re required to put down, if you’re entitled to a refund, or if you need to leave a deposit at all. Read through the guide to see where you stand before you make your purchase.

Do you need to leave a deposit?

Sellers can request that you put down a deposit so the vehicle isn’t sold to anyone else – whether you oblige or not is up to you. On the other hand, a used car dealer is more likely to ask you for a deposit to secure the sale, or require you to sign a contract.

Types of deposits for used cars

There are two types of deposits that you can be asked for when buying a used car:

Holding deposit

  • A holding deposit essentially “holds” the vehicle for you but you’re in no way obliged to follow-through with the purchase
  • It may go towards the purchase price but needs to be decided between you and the seller
  • You need to agree whether this deposit is refundable (get this in writing)
  • Applies for a limited time

Purchase deposit

  • You commit to purchasing the vehicle
  • It’s usually non-refundable and goes towards the purchase price, but confirm this with the seller
  • You sign a contract that outlines all terms and conditions relating to the sale
  • COE bidding for all categories (except category D) also requires a mandatory $10,000 deposit

What to do if you leave a deposit

If you decide to leave a deposit to hold your vehicle, there are a few ways you can protect yourself:

  • Agree on the terms of the deposit. Check whether the deposit is refundable, whether the deposit is part of the purchase price and how the deposit should be paid. Regardless if you’re buying from a car dealer or directly from the car owner, make sure you have all the terms written down and signed by both parties.
  • Get a receipt. Getting a receipt for the deposit is an important record to have, especially if the deal goes sour or if you purchased a lemon.
  • Inspect the car thoroughly. Even if you’ve agreed that the deposit is refundable, checking the car before putting down your deposit can save yourself hassle down the track. Make note of the engine number, chassis number and number plate, and if possible, have the car inspected by a mechanic. Also, check if the car is still under finance. You can read more about what to do in the used car buying guide.
  • Don’t leave too large a deposit. The Singapore government do not impose a fixed amount of deposit for car purchase (except for commercial hire purchase), so you don’t have to leave too a large deposit. If you leave a big deposit and change your mind, it’s a larger amount of money you’ll stand to lose if you aren’t entitled to a full refund.

Find out which lenders can help you finance your used car purchase
Picture: Shutterstock

More guides on Finder

  • How much can you really make as a Grab driver?

    Is signing up as a Grab driver worth it? Use the calculator and read our guide to find out how much you might expect to make.

  • Motorcycle Buying Guide: How to Buy a Motorcycle

    What you need to know before you take the plunge on a new pair of wheels with our in-depth guide.

  • 10 tips for buying a new car

    In the market for a new car? Before you head to the dealership, find out the tips that will help you get the price down and help you find the car that’s right for you.

  • Car Buying Guide: How to Buy a Car

    Looking to purchase a new or used car in Singapore? Read our comprehensive guide for all the info and a range of loans that you may want to consider.

  • Guide to importing a car into Singapore

    Importing a car into Singapore can be an expensive process if not done correctly. Find out how to import one and be compliant with the law and regulations.

  • DBS Car Loan Review

    If you’re looking to finance a new or used car, the DBS car loan might be your ideal option. Read through our comprehensive guide and see if you’re eligible.

  • How Grab car loans can help you get on the road

    Need a new loan for your next Grab car? Find out what is on offer here.

  • Cheapest cars compared

    To help you get on the road for less, we compare the top six micro cars for features, fuel consumption, energy consumption and everything else you need to know.

  • Luxury sedan comparison guide

    Our comprehensive guide will help you find Singapore’s best luxury sedan available for sale right now!

  • Best cars for dog owners

    Finding the right car for you and your best friend doesn’t have to be tough – read our guide so you don’t get “flead” at the dealership.

Ask Finder

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy Policy and Terms.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site