Used car worth less after repair: buyer entitled to a refund
The Austrian Supreme Court ruled in case 6 Ob 240/19s that a car buyer is entitled to money back if the repaired car is worth less than an equivalent defect-free vehicle. This also applies to used cars and concerns the vehicle's commercial diminution in value.
Mag. Patrick Maydell, LL.M., vehicle lawyer and trained motor mechanic, explains the main points.
1) Buyer discovers a leaking windscreen in a three-year-old car
The buyer purchased a three-year-old car from a dealer for EUR 33,500. During the test drive, he heard sloshing but assumed it was diesel in the tank. In fact, water had collected inside because the windscreen leaked. A small gap had remained in the seal between the glass and body when installed at the factory: a manufacturing defect. The water caused an oxidation layer on some electronic components. The buyer took the car to the dealer's specialist workshop for repair under the guarantee.
2) Even a used car must keep water out
The contract described the mechanical condition as class 2, good, with minor wear, no repairs needed, and minor adjustment or inspection required. Electrical and electronic equipment was also class 2, good, with the propulsion battery within its guarantee period and convenience electronics functional.
The Supreme Court held that a vehicle must have the characteristics ordinarily expected in trade, including roadworthiness and operational safety. This includes keeping moisture out, even for a used car.
3) After repair, the buyer seeks a refund
The buyer sued to return the car and recover the price through rescission (Wandlung). He argued that the water damage had not been properly repaired because wiring harnesses had merely been dried rather than cleaned, checked and replaced. He said the workshop had warned that the oxidation would cause future problems, that repairing the electronic defects was barely economical, and that the car was unsafe. He therefore claimed an irremediable defect and unsuccessful repair entitled him to rescission.
The dealer disputed this, saying it had properly repaired the car by replacing the windscreen and drying the vehicle.
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4) Supreme Court: the car was defective
The Court found that the vehicle was defective at delivery because the windscreen was not sealed to the body, causing water ingress and starting oxidation. A progressive oxidation process is a defect even before it reaches a stage capable of causing component failures.
The process was at least latent when risk passed to the buyer, so the buyer was entitled to repair.
5) The remaining oxidation was a minor defect: no right to return the car
The repair sealed the windscreen, dried the car and stopped the oxidation process. The court found that all components worked and no further oxidation was expected.
An oxidation layer on individual electronic components that neither impairs function nor continues to spread is a minor defect. The limited seriousness of these effects, without loss of function, had to be weighed against the impact of cancellation on the dealer. Rescission was therefore unavailable on this ground.
6) But the repair reduced the car's value, entitling the buyer to a partial refund
Although the repair was proper and stopped water ingress and functional problems, the car was worth less afterwards. This commercial diminution in value arose because it now had a value-reducing repair history that the parties had not agreed to.
In such circumstances, a buyer may be entitled to rescission or a price reduction, depending on whether the defect is serious or minor. Here, the loss in value was not sufficiently high relative to the purchase price to make it more than minor. Assessed in the context of this transaction, the remaining defect in the form of lost value was minor.
The buyer therefore could not return the car for a full refund, but could recover part of the price through a price reduction.
7) What the decision means
If a repaired vehicle is worth less than the equivalent vehicle without defects, the buyer may be entitled either to rescission, returning the vehicle for a full refund, or a price reduction. The extent of the loss in value is decisive. This applies to used vehicles too.
Mag. Maydell will discuss your legal options in a personal consultation. He works with vehicle experts to provide a quick, cost-effective assessment of the amount you may recover.
8) Problems with your vehicle?
Whether a seller concealed defects, you are a seller facing a buyer's complaints, or a repair has gone wrong, contact Mag. Patrick Maydell for a free initial assessment at +43 1 2954251 or office@maydell-law.at.
He specialises in vehicle law in Vienna and the surrounding area and is also a trained motor mechanic. His legal and technical knowledge assists particularly where:
- a purchased vehicle has technical defects concealed by the seller;
- a seller faces allegations of defects from the buyer;
- a workshop refuses repairs under a guarantee or statutory warranty;
- you were injured in a road accident and seek damages and compensation for pain and suffering;
- an insurer refuses to pay after an accident;
- you have problems with a leased vehicle or leasing company;
- other vehicle-related disputes arise.
Free initial assessment — call now
Call +43 1 2954251 or email office@maydell-law.at.
Mag. Patrick Maydell, LL.M.
Vehicle lawyer
Neustiftgasse 17/1/9
1070 Vienna
Telephone: +43 1 2954251
office@maydell-law.at
Categories: Vehicle law
Tags: Lawyer, Car, Money back, Vehicles, Defect, Price reduction, Repair, Reversal of a purchase, Rescission