A defect in a second-hand car

If you bought a second-hand car and it does not match the information the vendor provided, or if the car breaks down sooner than you would expect based on its age and mileage, this is a defected.  The car dealership’s liability for defects is based on the Consumer Protection Act. In addition to this car dealers may grant warranties for the cars they sell. The manufacturer or importer is liable for the factory warranty.

When does a second-hand car have a defect?

Not all faults in a second-hand car are defects. Even very soon after the purchase, the car may have defects and the new car owner may be liable for the repair costs. The owner of the car is responsible for the costs caused by the wear and tear of the car, the seller usually has no liability for them.

If you purchased the car from a car dealership, you can contact the Consumer Advisory Services in case of a dispute. The Consumer Advisory Services do not handle car deals between private individuals.

A fault in a second-hand car is a defect if

  • some part of  the car becomes defected sooner than what you could expect based on its usual duration
  • the fault in the car was caused by a defective repair made before you bought it
  • the car is otherwise in a more poor condition than you would have reason to expect based on its age, mileage and price as well as the information provided by vendor
  • the car develops a fault that is covered by the warranty

In addition to the age, price and mileage of the car, the quality of the defect, the possibilities and cost of repairing it, and the appropriateness of repairing the car in question are taken into account when assessing the compensation for the defect. The warranty or other additional security also affects the compensation received by the buyer of the car.

The vendor is not liable for a defect in a second-hand car if:

  • The buyer has been told about the fault before the sale. The vendor can only appeal to this if the fault is mentioned in the sales contract or other documents.
  • The fault is caused by an accident, improper use of the car, or neglecting services.
  • The fault was caused by normal wear and tear.
  • There is a fault in the car if it does not match the information provided by the vendor. The vendor is responsible for the defect, even if he himself was not aware of the incorrect information. For example, the vendor is responsible for incorrect information in the sales announcement, unless he has corrected it before the sale.

    Examples of situations in which the buyer may have the right to compensation for false information:

    • incorrect year of manufacture or first use
    • the mileage reported too low
    • some of the listed accessories are missing
    • there is no operating and maintenance manual
    • the vendor has given false information about the car’s history, or has not provided information that would have affected the purchase decision
      • the service history is incorrect/incomplete
      • the car has been re-registered because it has been in a collision
      • the car has been used as a taxi, rental car or similar

    The vendor should provide information about the car’s known features and usage issues that may be relevant to the buyer. If the incorrect information does not affect the value or usability of the car, it is not an error that qualifies for a refund.

    Incorrect information can be corrected, for example, by the vendor installing the missing equipment in the car at his own expense. If a new part is installed in the car, the buyer will usually have to pay a part of the costs. This is because the car is in better condition after repair if it is compared to cars of the same age without parts being replaced.

    If the buyer does not want to contribute to the costs or it is not possible to correct the defect by repair, the buyer is entitled to a price reduction corresponding to the defect. Examples of such faults are overstated mileage or a missing service manual.

  • The car has a defect if it develops  faults sooner than expected considering its age, price and mileage. Many car parts have an indicative duration, based on which you can assess if the fault is premature.

    The car also has a defect if the fault if the fault is due to repair work done before the sale.

    The vendor’s product liability does not cover faults caused by an accident, improper use of the car, or neglecting proper service and maintenance.

  • Even if the defects are normal wear and tear, the car can be considered defective if there are several defects and the total cost of repairing them is significant.

    In this situation, it should be assessed if the total repair costs of the faults are unreasonable compared to the buyer’s justified expectations. When you buy a cheap, old car with a high mileage, you should be prepared for the possibility that it may have many faults. Similarly, if the car is newish and expensive and the mileage is low, you may expect it to be in better condition.

What to do when there are faults in the second hand car you just bought

Stop driving if it could make the fault worse or cause more damage. Ask an expert for an estimate of whether the car can be driven.

  • According to the Consumer Protection Act the car dealer is responsible or defects in the cars they sell.   If the car is still under warranty, the dealership together with the importer and manufacturer are responsible for rectifying any defects as set out in the warranty terms. The car dealership is not liable for the warranty if it has stated this when the sale was concluded.

    When you buy a second-hand car, the importer and manufacturer are not liable for defects in the car that are not covered by the warranty.

    Car dealerships also offer different types of additional protection for second-hand cars, either included in the purchase price or for an additional charge. The additional protection may be based on an insurance policy, for instance.

    The compensation paid on the basis of additional protection must be at least equal to what it would be under the Consumer Protection Act. If the additional protection includes the word “guarantee”, there should be no charged for any repairs made under it.

    If you bought a second-hand car from a private individual, the Sale of Goods Act and its provisions on defects apply to the sale, not the Consumer Protection Act. A warranty given by the importer or manufacturer also applies to second-hand cars you buy from private individuals.

  • Check if the valid warranty covers the defect your car has. The warranty for a second-hand car may have been granted by the manufacturer or importer, or separately by the vendor. The vendor is also responsible for the importer’s or manufacturer’s warranty if it has not expressly stated otherwise before the sale is concluded.

    Faults covered by the warranty must be diagnosed and repaired free of charge. The warranty provider has the right to decide where the repairs are carried out.

    The warranty provider does not have to repair the fault if it can be shown that it was probably due to the actions of the car owner

    • improper use of the car
    • external damage or an accident
    • not following the manufacturer’s service instructions, provided that this has had an effect on causing the fault.

    If the period between engine oil changes has clearly been too long, for example, this may be a sufficient reason to reject a warranty claim concerning engine damage if poor lubrication can be regarded as the reason for the fault. The fact that the lubricating properties of oil deteriorate rapidly if the oil is not changed regularly is general knowledge.

    The buyer may have a right to partial compensation, for example if the car has a manufacturing defect, but neglecting services or other actions by the buyer have made the fault worse.

    If you have contributed to the fault yourself, you are liable for the costs of the diagnosis.

  • If there is a fault or some other problem in a second-hand car you bought and you think that the vendor is liable for it, you should first contact the dealership.

    See the instructions for filing a complaint

    The time period for which the dealership is liable for a defect in a second-hand car is not limited, and it It is comparable to the expected duration of the car or the failed part. For example, engine and transmission faults may be covered by the vendor’s product liability for a long time after the vehicle was sold. If your car has a fault of this type, you should always first contact the dealership before you have the car repaired.

Repairing the fault is the primary way of rectifying a defect in a second-hand car

The vendor has the right to identify the defect and repair the fault. The repairs must be made within a reasonable time, without reducing the value of the car and without causing significant inconvenience to the buyer.

If the vendor examines the car and no defect is found, the vendor may charge you a reasonable fee for diagnosing the fault if they have told you about this charge in advance.

If a defect is found in the car, the vendor must pay all the diagnostic costs.

If the vendor denies their liability and refuses to diagnose the fault, it is your responsibility to prove that there is a defect. To do so, you must have the fault diagnosed and you need an estimate of the repair costs. If there is a defect in the car, you can ask the vendor to reimburse you the diagnostic costs later.

When the fault has been diagnosed, you should contact the vendor again. At this stage, you can still try to negotiate on rectifying the defect or other compensation.

If new spare parts are used to repair the car, the repaired car us usually considered to be in better condition than cars of the same age and mileage. Because the condition of the car improves, you may be asked to pay part of the repair costs. For example, the repair costs can be shared based on the expected service life of the replaced part.

If the repair does not improve the car’s condition, the vendor should pay the full cost of the repairs. An example of this is when a second-hand spare part in good condition can be used to repair the fault.

Cancelling the sale of a second-hand

The purchase may be cancelled if the defect cannot be rectified or if, for example, the same fault keeps appearing several times and the defect has major significance for using the car.

You may also have the right to cancel the sale if the repair costs of the car are unreasonable considering the value of the car. This may be the case if the repair is not worthwhile because the repair costs are approaching the price of the car or the defect is otherwise impossible or unreasonable to be repaired. It could also be a situation where you would be left with an unreasonable share of the repair cost. The assessment of situations is case-by-case. The purchase can usually not be cancelled after the fault has been repaired.

When the purchase is cancelled, you return the car to the dealership. The dealership will refund you the sale price of the car and profit interest, from which the benefit of using the car has been deducted, usually based on your mileage. Typically, the benefit for using the car is calculated as around EUR 0.10/km. If new parts have been installed in the car while you owned it, the vendor must also reimburse you for them when the purchase is cancelled, as they will benefit the vendor.