I’m with Fry and the others on just giving him his money back. I just wouldn’t want to chance anything happening legally. If you get legal advice and your lawyer says keep it, then do so.
It sucks that he wasted your time and you missed out on potential sales, but I think you said that he didn’t go through with the ebay sale but contacted you about buying the car at the reserve anyway. Why wouldn’t he just keep bidding then? ebay tells buyers when the reserve is met. Something doesn’t add up.