When hiring a moving company, you might find some movers will ask for a deposit to hold the moving date. Down payments aren't very common except in areas of the country where there are high rates of households moving or a deposit may be required during peak moving season, such as summer months.
If a mover asks for a deposit, it should be your first red flag that the mover might not be a good choice. Do your research before you agree to a moving deposit.
Why Are Deposits Required?
First, it's important to know that moving deposits are not common. When a mover asks you for a deposit, it's a good idea to question the mover, asking why they require upfront funds. If you're moving in the summer - May through August - some moving companies are concerned that without a deposit, they could miss out on the busiest moving season if a customer cancels the move at the last minute.
If you've hired a mover through a moving broker - a third party company that provides a truck and movers - you may find yourself paying a deposit to the broker. While you may think that hiring movers through a broker will be easier, often it means that your mover is unknown, making it difficult for you to know if your mover is reliable. Overall, it's best to avoid using a moving broker. If you do decide to use one, make sure you know who the mover is so you can do your own research.
Down payments or deposits may also be common among rogue movers.
So if you've been asked for a deposit, make sure the mover is reliable. Do your research. Check the mover's moving history before you pay any money or sign any contracts or documents.
What is a Reasonable Amount?
If the moving company you're thinking of hiring has a good moving record and asks for a deposit, it's important to know what is a reasonable amount to pay. Some movers will base it on a percentage of the cost of the move, so if you're moving a long distance you could be paying a slighter higher deposit. Most long distance movers or interstate moving companies base their fees on weight and distance so the deposit may be higher than for local moves or what is often called intrastate moves.
Other movers may adjust the deposit amount according to the day you're moving. Moving on a weekend may require a higher down payment while weekdays are often lower. Overall, deposits may range from as low as $100 up to $500. Any amount between is considered reasonable.
What If I Need to Cancel the Move?
If you've been asked for a reasonable deposit, the mover should also provide you with a reasonable time to cancel the move and still retain your deposit. Most cancellations need to be done at a minimum of two weeks before the moving date. However, during slow-moving periods, companies may allow you to cancel a week prior to the move without a penalty. Know what the penalty date is before you sign the moving contract so you don't lose your deposit should your move date change or your move be canceled.