The financing of the purchase of new and used vehicles is often offered directly by the seller, either by a bank of the vehicle manufacturer whose dealer or branch sells the car, or by a bank that cooperates with the seller in the context of the sale of the vehicle.
But what is the legal situation if the buyer no longer feels bound to either the financing contract or the purchase contract – or both contracts?? What happens to the other contract?
Concept of a related transaction
In this context, whenever the buyer is a consumer, one concept is of crucial importance: the so-called "linked transaction".
§ 358 abs. 1 BGB:
If the consumer has effectively revoked his declaration of intent to conclude a contract for the delivery of goods or the provision of another service by a business, he is also no longer bound by his declaration of intent to conclude a loan agreement associated with this contract.
In most cases, the contract for the purchase of the vehicle and the related contract for the financing of the purchase price, often a loan agreement, are connected within the meaning of the provision.
Conditions of the linked transaction
The conditions of the linked transaction are governed by the provision of § 358 abs. 3 BGB.
A contract for the supply of goods and a loan agreement are linked if the loan serves in whole or in part to finance the other contract and the two contracts form a single economic unit. An economic unit is to be assumed in particular if
- The entrepreneur himself finances the consideration of the consumer, or
- In the case of financing by a third party, if the lender makes use of the cooperation of the entrepreneur in the preparation or conclusion of the loan agreement.
Important: this provision does not cover the quite frequent case of the buyer independently taking out a private loan with his own bank. As soon as he has received the loan proceeds from his bank, he buys a car from them. Here there is no separate right of revocation if the car seller and the buyer’s bank have not cooperated with each other.
Legal consequences of the revocation
In the case of loan agreements, the borrower, if he is a consumer, has a right of revocation under section 495 of the German Civil Code (Burgerliches Gesetzbuch – BGB). This means that the vehicle purchaser can cancel the financing of the vehicle purchase by declaring revocation.
If the buyer, who is a consumer, has effectively revoked his declaration of intent to conclude a loan agreement, he is no longer bound by the declaration of intent to conclude a contract for the delivery of goods or the provision of another service that is linked to this loan agreement (section 358 (1) of the civil code). 2 BGB).
In other words, the contract of sale of the vehicle concluded with the seller is also void.
The revocation leads to the reversal of both contracts.
prohibition of circumvention
In practice, many car salesmen try to get around these disadvantageous regulations or to secure the deal before the revocation periods expire.
However, caution is required here, as the law in § 361 para. 2 BGB provides for a prohibition of circumvention:
Unless otherwise stipulated, the provisions of this subtitle may not be deviated from to the detriment of the consumer. Unless otherwise provided, the provisions of this subtitle shall also apply if they are circumvented by other arrangements.