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Requesting a Deposit Back

Since there is no provision for a "cooling off" period in Ontario's law, if the dealer agrees to cancel a vehicle purchase agreement, they are entitled to claim "liquidated damages" and retain a part – or all – of your deposit.


Liquidated Damages

Liquidated damages arise from the expenses the dealer might have already incurred in when selling the vehicle to you: e.g.

  • Advertising
  • Freight and administrative costs
  • Cost for the loss of profit resulting from this cancellation

Template Letter

You may send a letter to the dealership provided that

    1. your contract was recently signed and you have not taken possession of the vehicle, AND,
    2. you wish to cancel the agreement under one of the conditions specified in the back of the contract but mutual consent has not been given.

This is an example of how your letter to the dealership should be worded. Send your letter by registered mail, courier, or hand-deliver it, and obtain a receipt.

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