Rights and liability for a trade-in car

Sometimes faults or deficiencies are appeared in trade-in cars after they have been assigned, and the car dealership may claim compensation for them. You may be liable if the information you have presented about the trade-in car is incorrect or if the car is in essentially worse condition than expected.

Know your rights and liability for a trade-in car

Sometimes faults or deficiencies are appeared in trade-in cars after they have been assigned, and the car dealership may claim compensation for them. You may be liable if the information you have presented about the trade-in car is incorrect or if the car is in essentially worse condition than expected.

The customer’s liability for a trade-in car is determined by the Sale of Goods Act. If there is a defect in the trade-in car you have assigned, you are liable for it even if you were not aware about it. For example, a hidden fault that is expensive to repair may be appeared in the trade-in car after the assignment. This fault means that the dealership’s assessment of the trade-in car value was too high.

You are only liable for a hidden fault in a trade-in car if the car is in essentially worse condition than the dealership can rightly have expected based on the trade-in car price and other circumstances.

An example of this is a situation where the repair costs of a hidden fault are significant considering the vehicle’s age, mileage and contract price.
When evaluating a defect in a trade-in car, another detail to be considered is that the vehicle was received by a professional of the vehicle sector who should be prepared for the wear and tear accrued to the age and mileage of the car in question and who can also be expected to know, for instance, the type faults of the vehicle model in question.

A consumer’s liability for a trade-in car is determined by distinct principles than a car dealership’s liability for defect in a vehicle that a consumer buys. When a consumer buys a car from a car dealership, the indemnity (liability for damages) is much lower and, for example, a hidden fault does not have to be essential to be a defect.

A car dealership cannot claim compensation from the consumer merely on the argument that the dealership has been liable for a defect to the new buyer of the trade-in car in according to the Consumer Protection Act. Additionally, the amount of the dealership’s claim of amends cannot be only based on the amount that the dealership has refunded to their buyer.

Ask the dealership explanation the arguments for their claim

The consumer is only liable for hidden faults in a trade-in car if the repair costs are significant considering the age, mileage and contract price of the car.

A car dealership cannot claim compensation from the consumer merely on the argument that the dealership has been liable for a defect to the new buyer of the trade-in car in according to the Consumer Protection Act. Additionally, the amount of the dealership’s claim of amends cannot be only based on the amount that the dealership has refunded to their buyer.

If you receive a claim affiliated with a car you assigned from a car dealership, ask the dealership explanation the arguments for their claim.

Information that the dealership must state in their claim includes

  • mileage on the car when the fault appeared
  • explanation of the fault and its cause
  • repair costs of the fault.

You should first try to settle the issue by negotiating. If you cannot reach an agreement or you need advice for estimating your liability, you can contact the Consumer Advisory Services.