Which of the following is an example of an expense a dealer can deduct from a deposit if the purchaser backs out?

In this scenario, the correct answer relates to expenses that a dealer can legitimately deduct from a deposit if a purchaser decides to back out of a deal. Further advertising is relevant here because it involves efforts made specifically to market the vehicle that was intended for sale to the customer who ultimately backed out.

When a dealership commits resources to promote a vehicle, such as running additional advertising campaigns aimed at attracting buyers, those costs can be recouped in part from the deposit if the sale doesn't go through. This rationale stems from the fact that the dealer may incur these costs believing that a sale was imminent, and those costs would not have existed had the purchaser continued with the transaction.

The other options, while they might represent legitimate business expenses in different contexts, do not typically apply in the same manner in this situation. Shipping costs, insurance fees, and legal fees may be necessary expenditures but do not directly correlate to the action of the purchaser backing out and are not typically seen as recoverable from a deposit under the circumstances described.