CONSUMER WHO ENTERS INTO A LEASE CONTRACT FOR A CAR WITHOUT AN OBLIGATION TO BUY DOES NOT HAVE A RIGHT TO CANCEL THE CONTRACT

#107Consumer who enters into a lease contract for a car without an obligation to buy does not have a right to cancel the contract

The Court of justice of the European Union´s judgment clarifies the consumer's rights in the area of car leasing contracts and car loans. In the case of a lease contract for a car without an obligation to purchase, the consumer has a right of withdrawal under European Union law.

Consumers have brought an action before the Regional Court in Germany alleging that they have validly rescinded leasing or credit agreements concluded with banks and car manufacturers such as BMW Bank, Volkswagen Bank and Audi Bank. The reason for this is that the consumers considered that the 14-day withdrawal period provided for by European Union law had not begun to run because they had not been sufficiently informed of their rights and obligations at the time of conclusion of the contract. The banks and car manufacturers BMW Bank, Volkswagen Bank and Audi Bank, on the other hand, argued that this was an abuse of the law.

However, the consumers visited the car dealer, who was entitled to provide information about the contract, and the contract was subsequently concluded directly between that consumer and the bank using a means of distance communication. In the case of credit agreements, the dealers acted as intermediaries for the banks.

These consumers withdrew several months or years after the conclusion of the contract, with one consumer exercising his right of withdrawal only after he had repaid the loan in full.

The Court of Justice has held that a consumer who has entered into a leasing contract in respect of a vehicle ordered to his specifications does not have a right of withdrawal under European Union law if the contract provides that he is not obliged to buy the vehicle at the end of the lease period. This applies even if the contract was concluded at a distance or off-premises.

In the case of a consumer who has concluded a credit agreement in order to purchase a vehicle without being properly informed of his rights and obligations, he has the right to withdraw from the contract at any time if he has not been given full and accurate information, provided that such withdrawal occurs before the contract has been fully performed.

Finally, we note that, according to the Court of Justice, in the case of credit agreements, the 14-day withdrawal period laid down for leasing agreements does not start to run if the information provided by the trader at the conclusion of the contract is so incomplete or incorrect that it has affected the consumer's assessment of the scope of his rights and obligations and his decision to conclude the contract. In such a case, the exercise of the right of withdrawal after the expiry of the 14 days may in no case be regarded as an abuse of the right, even if it occurs long after the conclusion of the contract. However, the Court states that, once the credit agreement has been fully performed, the consumer can no longer exercise his right of withdrawal.