Car financing: loan revocation as an opportunity for reversal?

Exhaust gases flow out of a car's exhaust

The "revocation joker The well-known trick may also work for diesel owners, but it is subject to certain conditions and the legal situation is not yet clear in many places.

Consumers will use the "revocation joker often want to use if they have financed a diesel car that is affected by the diesel scandal. However, the revocation joker can – if the necessary preconditions are met – generally be used for any financed passenger car if this makes (economic) sense for the consumer. For example, in the case of a "Monday car.

Generally speaking: If you are considering using the "revocation" joker to use, be sure to seek legal advice.

Consumer advocates reach settlement with VW

The Federation of German Consumer Organizations (vzbv) had filed a lawsuit against Volkswagen AG. This is possible due to the introduction of the new action instrument of the model declaratory action. On 1. November 2018, the relevant law had entered into force. Lawsuit filed on the same day regarding the emissions scandal.

In the meantime, a settlement has been reached. You can find more information here.

Here are answers to the most important questions:

Can I return my old diesel if I revoke the financing now??

The basic prerequisite for revocation is that the purchase of the car and the financing agreement are legally connected. This is usually the case if the financing agreement was concluded via the dealer.

A further prerequisite is that the credit agreement was faulty. According to the current state of case law, the customer has a right of revocation in many cases because the financing bank, for example, has provided no or incomplete information about whether and how the customer can terminate the contract prematurely. A significant number of regional courts have already ruled in favor of consumers in this way. The following is a selection of consumer-friendly decisions:

  • Arnsberg Regional Court, judgment of 17.11.2017, file number: 2 O 45/17 Berlin Regional Court, judgment dated 05.12.2017, Az: 4 O 150/16 (irrelevant)
  • Berlin Regional Court, judgment of 15.02.2019, Ref: 4 O 20/18
  • Ellwangen Regional Court, judgment of 25.01.2018 Az: 4 O 232/Landgericht Munchen I, judgment of 09.02.2018, Ref: 29 O 14138/17
  • Stuttgart Regional Court, judgment of 22.03.2018, Az: 14 O 340/17 Wiesbaden Regional Court, judgment dated 09.08.2018, Ref.: 9 O 143/18
  • Regional Court of Erfurt, judgment of 08.03.2019, Ref: 9 O 480/18 Wuppertal Regional Court, judgment dated 21.10.2019, Ref.: 17 O 62/19 (concerns a leasing contract)
  • Bochum Regional Court, judgment of 05.03.2020, Ref: I-1 O 374/19 (financed used vehicle)
  • Hof Regional Court, judgment of 18.03.2020, Ref: 17 O 10/19

However, not all judgments are legally binding, or the defendant bank has for tactical reasons – through acknowledgement, settlement o.a. – A landmark court decision avoided. Courts in another judicial district or in a higher instance may therefore well rule differently. In addition, individual regional courts have also already dismissed consumer claims:

  • Dusseldorf Regional Court (Ref. 11 O 37/17),
  • Cologne Regional Court (Az. 21 O 23/17)

A right of revocation – which exists in itself – can also be revoked due to "forfeiture" be excluded in certain cases. This is the view of the Dusseldorf Higher Regional Court, for example, judgment of 28.05.2019, Ref: 9 U 77/18. Forfeiture means that the loan financier no longer has to expect that the borrower will exercise his right of revocation due to special circumstances. In such cases, the so-called forfeiture of the right of revocation may have occurred and the borrower can no longer exercise his – in itself existing – right of revocation.

A new approach to revocation could result from the decision of the European Court of Justice (ECJ) of 26. March 2020 (case number C-66/19) and of 09. September 2021 (file numbers C-33/20, C-155/20 and C-187/20) result. The decisions concerned the right of revocation in (general) consumer loans and possibly expands the circle of errors in revocation instructions and mandatory information. This would also have an effect on the corresponding car financing. However, the BGH will in any case apply the decision of the ECJ from 26. March 2020 not apply in certain cases if the lender has properly used the model instruction set by law. See also our separate article.

Each case is different and individual! Have a legal assessment of whether revocation is possible in your case. Legal advice from a lawyer usually costs money!
If you have legal protection insurance, ask for a confirmation of coverage beforehand.
If you have no insurance coverage and only a low income and assets, you may be entitled to a consulting assistance certificate.

Revocation is possible in my case! Do I get my money back now?

If you revoke the financing, both contracts are reversed: the loan agreement and the purchase agreement for the car. You must then return the financed car.

If the declaration of revocation has been received by the bank, you no longer have to transfer interest and redemption payments. You can claim back installments already paid from the lender.

However, the bank is regularly entitled to the contractually agreed interest on the loan, because you have used the loan for a certain period of time. This applies from the time the loan amount is disbursed to the time the revocation is received

This only applies if you were informed of this in the contract. You should therefore check whether the credit agreement properly informs you about the consequences of cancellation. If this is not the case, it is conceivable that the lender has no interest claim.

But my money – minus the interest on the loan until the revocation – I get?

Unfortunately, it is not that simple. In principle, you must pay the dealer compensation for the fact that you drove the car after you have cancelled a financing agreement.

Some legal experts are of the opinion that the revocation of a financing contract, at least if it was concluded after the 13th month, is not a legal obligation. If the contract was concluded on June 2014, no compensation for use is due. This is also the view of the Berlin Regional Court in its ruling of 15.02.2019, Ref: 4 O 20/18. The regional court has ruled that no compensation should be owed due to the faulty revocation instruction. As a result, the bank was only allowed to keep the interest paid on the loan. The car was thus used by the plaintiff "free of charge" driven.

To support this position, partial reference is also made to the decision of the OLG Munich, ruling of 18.06.2020, Ref. No. 32 U 7119/19 referred to. However, it may be questionable whether this decision is actually relevant, since it concerns a leasing contract with mileage accounting, which is not subject to the scope of consumer protection legislation.

Other court decisions that have become known to us so far, which grant consumers a right of revocation, then also see this clearly differently. According to this, it cannot be ruled out that compensation must be paid at least for the kilometers driven with the car.

However, this is not assessed as a lump sum per kilometer. The calculation is more complicated: The kilometers driven are multiplied by the gross purchase price of the vehicle and divided by the expected remaining mileage of the vehicle (at the time of purchase). Are you therefore up to the revocation 50.000 kilometers with the car and has returned the car 10.000 euros, you would have to pay for the car with an initially expected remaining mileage of 100.000 kilometers 5000 euros value replacement for the use pay.

In addition, it cannot be ruled out that you may be Compensation for a loss in value of the car have to pay, if this is higher than usual. This can be, for example, any damage to the vehicle caused by prolonged or intensive use, z. B. Parking bumper, heavy interior soiling.
The extent of the compensation claims is regularly determined by expected court rulings.

The exact value of the compensation can only be determined at the time of the return of the car, thus after the revocation, against refund of the money. However, if there is a legal dispute about revocation and refund of money, this usually takes place only after a final ruling. Such a process can take years. Then remains unclear for a long time, how much you get back now exactly and whether revocation and reversal of the contracts are actually worthwhile.

Is a revocation worthwhile for me then at all?

This cannot be given a blanket yes or no answer. It always depends on the individual case. In addition, there are only a few legally binding court rulings to date, some of which contradict each other, so that the scales of justice can still tilt to one side or the other and change fundamentally.

Since the amounts in dispute for the proceedings are often very high (regularly in the five-digit range), the cost risk for you is also considerable. Also, a process – over several instances – usually takes several years. All this should be weighed up beforehand.

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