Anyone who identifies a defect in a used car may, pursuant to § 437 BGB, in principle demand subsequent performance (Nacherfüllung) and, should that fail, withdraw from the purchase contract (Kaufvertrag), reduce the purchase price, or claim damages. Which of these rights actually applies depends crucially on whether the vehicle was purchased from a dealer or a private individual and whether the defect already existed at the time of handover.
The purchase of a used car often brings conflicting interests into direct conflict: buyers expect a roadworthy, accident-free vehicle, while sellers tend to point to wear and tear or the age of the vehicle. The law provides a clear framework for this, which has been tightened in several respects since the reform of sales law (Kaufrechtsreform) on 1 January 2022.
What Constitutes a Legal Defect in a Used Car?
A material defect (Sachmangel) exists under § 434 BGB where the vehicle does not possess the agreed characteristics at the time of handover or is not suitable for its ordinary use. The law distinguishes between subjective requirements, that is, what was agreed in the purchase contract, and objective requirements, that is, what a buyer may ordinarily expect of a vehicle of that type.
Classic examples include a concealed accident damage, a manipulated mileage reading, a defective gearbox, or a non-functioning turbocharger. Pure wear and tear commensurate with the age and mileage of the vehicle does not, as a rule, constitute a defect. A vehicle with 120,000 kilometres may therefore have worn brake discs without this amounting to a material defect (Sachmangel).
The decisive point in time is always that of handover. If a defect only manifests itself months later, the buyer must demonstrate that the underlying cause already existed beforehand, unless the reversal of the burden of proof (Beweislastumkehr) under § 477 BGB applies.
Subsequent Performance: Repair or Replacement Delivery
The first step in the event of a defect is, pursuant to § 439 BGB, subsequent performance (Nacherfüllung). The buyer may choose whether the seller remedies the defect or delivers a defect-free replacement vehicle. In the case of a used individual item, replacement delivery is in practice generally excluded, so that repair takes precedence.
The seller bears the costs of subsequent performance (Nacherfüllung), including transport, labour, and material costs. If the repair fails twice or the seller refuses to carry it out, the requirement to set a further deadline lapses pursuant to § 440 BGB.
When May Buyers Withdraw from the Purchase Contract?
If subsequent performance (Nacherfüllung) fails, the buyer is entitled to withdraw (Rücktritt) under § 437 No. 2 in conjunction with § 323 BGB. As a general rule, this presupposes that a deadline for rectification was previously set without success. Withdrawal results in the unwinding of the purchase contract (Kaufvertrag): the buyer returns the vehicle and the seller refunds the purchase price.
However, the buyer must accept a deduction for compensation for use (Nutzungsentschädigung) in respect of the kilometres driven. This is typically calculated using the formula: purchase price multiplied by kilometres driven, divided by the vehicle's expected remaining service life.
Withdrawal is excluded where the defect is only minor (§ 323 para. 5 sentence 2 BGB). A simple scratch on the paintwork therefore does not justify the unwinding of the entire purchase contract, whereas a concealed, substantial accident damage does.
Reduction of the Purchase Price
Instead of withdrawing, the buyer may reduce the purchase price (Minderung) pursuant to § 441 BGB. This option is appropriate where the buyer wishes to continue using the vehicle despite the defect. The reduction is made in the proportion in which the value of the defect-free vehicle stands to its actual value with the defect.
By way of example: if a defect-free used car costs €15,000 and an unresolved gearbox defect reduces its value by €3,000, the buyer may reduce the purchase price by one fifth and reclaim the corresponding amount, provided payment has already been made.
Damages for Defects
In addition to withdrawal and price reduction, a claim for damages under §§ 437 No. 3, 280, 281 BGB may be considered. This generally requires that the seller is responsible for the defect, for example because the seller knew of it or ought to have recognised it. Claims may cover, for instance, repair costs, car hire costs during the period of unavailability, or a loss in value caused by the defect.
Where accident damage has been fraudulently concealed (arglistig verschwiegen), the seller is liable under § 444 BGB even where the contract contains an exclusion of liability for defects (Gewährleistungsausschluss). Fraudulent concealment (Arglist) exists where the seller was aware of the defect and deliberately concealed it in order not to jeopardise the sale.
Limitation Periods and Exclusion of Warranty in Private Sales
Claims for defects in movable goods such as vehicles become time-barred as a general rule after two years from handover (§ 438 para. 1 No. 3 BGB). In the case of a sale of a used item between a trader and a consumer, this period may be reduced to one year if this is expressly and separately agreed (§ 476 para. 2 BGB).
Difference Between Purchase from a Dealer and Private Purchase
When purchasing from a commercial dealer, the consumer goods purchase provisions (Verbrauchsgüterkaufrecht) of §§ 474 ff. BGB apply. A complete exclusion of the warranty (Gewährleistung) is ineffective in this context (§ 476 para. 1 BGB). In addition, within the first year following handover, the buyer benefits from the reversal of the burden of proof (Beweislastumkehr) under § 477 BGB: if a defect manifests itself within this period, it is presumed to have already existed at the time of handover. The dealer must then prove that this was not the case.
- Private purchase: exclusion of warranty (Gewährleistung) possible, no reversal of the burden of proof (Beweislastumkehr) - Purchase from a dealer: exclusion not permissible, reversal of the burden of proof (Beweislastumkehr) for one year - Fraudulent concealment (Arglist): liability exists in both constellations
This differing starting position frequently determines whether a claim can be successfully enforced at all.