DerekP wrote: Can I keep the deposit and retrieve the car? If he refuses to relinquish the car what can I do then? Must I report the vehicle as stolen?

I think you get to keep the deposit, plus you get to sue for specific
performance of the contract, so you can force him to pay you the entire
agreed price, plus the damages are trebled....

What does the Purchase & Sale agreement say?

How much did he cost you, in lost buyers, lost use of the cash you
would have got for the car sooner if he'd bought it than when
the ultimate buyer buys it, in re-running the newspaper ad?

Suggest that he give you $100 for re-running the ad and so forth
(which I'd guess leaves you coming out ahead), give him $4900,
and get back to selling your car and the rest of your life.

--
- David Chesler <chesler@post.harvard.edu>
Iacta alea est

I wrote: I think you get to keep the deposit, plus you get to sue for specific performance of the contract, so you can force him to pay you the entire agreed price, plus the damages are trebled....

On reading what I wrote, I see that I should not have omitted the smiley
face. Or the bit about debtors prison.

And I'd add the $5000 the former buyer put down indicates he wasn't
messing with you. He was serious (in house-buying they call it "earnest
money") -- so something's come up, or he's realized he was making
a mistake, but either way treating him fairly, asking him for enough to
make you whole, your time and actual expenses, but far less than the $5000,
is probably the best way out.

If, as someone suggested, you used the $5000 to pay off the car to clear
the title so you can give it to him, your expenses might be more than
running another ad in the paper, and he may have to work with you.

Others have said the car is not stolen. I don't know if this means
the reluctant buyer is committing no crime if he doesn't give the car
back (in return for the deposit) -- but it would not be wise to tell
the police only half the story.

--
- David Chesler <chesler@post.harvard.edu>
Who has walked away from a $20 deposit on a motorcycle, and 2 weeks rent
on an apartment, to back out with smiles all around, but who has never
spent even 1/3 of $5000 for a car