I ordered a new Yeti 1.2TSI DSG in person from a Skoda dealer on 27 November 2014, at which time I signed a New Vehicle Order form and paid a deposit of £1500 by credit card. I intend paying the balance due when I take delivery. This was estimated on the order as being 1 March 2015. The order form states that it contains the terms of a contract and that I should only sign it if I wish to be legally bound by them. So far, so good.

I downloaded the 01/15 Skoda Yeti brochure today to see if there had been any list price changes since my order was placed. Apart from the list price of the model I have ordered having increased by £200, the options I have specified have also increased by £370, making a £570 price rise overall. The Outdoor Plus Package has the largest price hike, having increased from £485 to £725!

The Dealers Conditions of business state:

'If, after the date of any contract made subject to these conditions of business but before payment is made by the Customer the recommended list prices of the Manufacturer or its United Kingdom importer for any work carried out or parts supplied shall rise, then the contract price shall rise accordingly notwithstanding the terms of any estimates or quotation the Dealer may have given.'

They also state:

'No variation of any contract shall be valid unless agreed in writing and signed by or on behalf of the Customer and the Dealer.'

I have made payment, albeit the £1500 deposit. I have also signed a binding contract so there are no estimates or quotations in this case.

My question is: do the terms above allow the dealer to increase the price in the contract by £570? I haven't spoken to the dealer about this issue nor have I been contacted as yet. I would like to be suitable prepared in advance.

Yes the dealer is allowed to increase the price but has to give you notice of their intention to do so and if you are not happy with the price rise then you are entitled to cancel with no penalty and get 100% of your deposit back as far as I'm aware. :-)

Ooh, they have a contract that says they can charge you whatever the hell they want if the price changes... Not worth the paper it's written on.

It's rare but not entirely unheard of for dealers to try and bump the price up in situations like this. Hopefully they won't try it on.

Basic contract law is that the price marked up or list price is what's known as the 'invitation to treat' and has no bearing on the legal contract.

The legal contract requires offer, acceptance, intention (to be legally binding), and consideration (this is you paying and them providing the goods). The important thing to note is that the offer is you offering to buy the car for x many pounds, the acceptance is them accepting your offer of x many pounds. Any change to list or marked up price is them just changing the 'invitation to treat' I.e. It means nothing contractually unless you offer to buy the car for the revised price.

This is why they have the clause re it needing to be written variation - just don't get talked into signing anything as such, as it's basically you revising your offer.

The basics of invitation to treat and offer/acceptance can be seen when people see an incorrectly priced product in a shop and think they will get a bargain at the tills, the shop may accept a lower price (often as goodwill) but there is no legal requirement for them to sell the item for the lower price as this is them rejecting an offer.

Edited 30 December, 201411 yr by Exeterj

Thank you for that very clear explanation of basic contract law. If I decline to sign a variation of the contract would it automatically be cancelled if the dealer is unwilling to sell at the original contract price and would I in turn be entitled to a full refund of the deposit I paid?

I have a further question related to build dates and the latest that a factory order can be cancelled. Just prior to Xmas I was advised that the provisional build date had come forward from week 6 to week 3, and that I would be advised when the confirmed build date was known. How close to that date can the dealer cancel the order? The car has been ordered with a lot of options and it could be that the dealer will have trouble finding another person willing to buy it if I don't.

They don't have any basis to terminate the contract for you not accepting their change in the list price after the contract has been signed.. There's bound to be terms that say something along the lines of termination due to unforeseen things out if their control / force majure / act of God etc, but this is clearly outside of this.

There's lots of small print but the basic and overriding principle is they have accepted your offer for the car (even though consideration come later). If they try to change the invitation to treat (price) this is a counter offer which would override your offer but only if you accept the counter offer by resigning the contract by form of variation.

The details of the cancellation period should be on the contract particulars or documents referenced by it. I guess most manufactures have some cooling off period but in theory from a contract law PoV if nothing is stated then you are basically bound to buy alongside the fact they have a duty to supply for the agreed contract sum as above. Bit like exchanging contracts on a house, once this happens both parties committed to buy/sell or would be in breach and liable to be sued.

Hth

I've never heard of any Skoda dealer deviating from the price on the order form on the day the car is ordered.

With my last VAG car I opted for one of the service packages but when it arrived 4 months later they told me that the price for that package had been increased.

So yes they did try and charge me more but a polite refusal to pay soon got it amended. :strong:

In the good old days when I sold Ford cars out of a Kensington dealership in the 80's, it wasn't uncommon for Ford to increase prices two or three times between a customer placing his order and the car arriving.  On each occasion, the salesman had to contact the customer and advise him of the price hike (and in the early 80's, we were talking between 8 and 10%!) and ask if they would like to continue with the order, or return to the dealership for a refund of their deposit.    

 

If the vehicle had left the factory gate, the dealer could pay for the vehicle immediately at the pre-increased price so some customers benefitted from the fact that our Directors lived in Guernsey and had piles and piles of spare cash lying around!   They always made a point of pre-buying any cars we were ordering for stock as we could buy at the old price, and sell at the new thereby swelling the offshore bank accounts nicely.

I don't recall any of our customers cancelling orders, because if they came back to us for their deposit, we were encouraged to renegotiate the deal and empowered to "go halves" with the increase to retain the sale.   Let's face it, once you're "hot to trot" for your new car, you don't really want to pull out do you?

Like BossFox says, in this day and age of hot competition and low interest rates, I haven't heard of dealers enforcing price rises on existing orders and your Yeti ordered in November should just about be built now or be on the build schedule any day in the New Year.   If you're at all worried about it, talk to your dealer's salesman and ask him directly!

Let us know how you get on!

Edited 31 December, 201411 yr by bealine

Talking to Sales people, Sales managers & even Principals are all good,

but if in doubt & you want the true story, then ask in Writing and request that the reply comes in writing from the Dealer Principal or Finance Manager.