Find out what the agreement would cover and what the responsibilities are before deciding whom to do business with and before signing an agreement. Find out what the vendor, the broker (if any) and any other persons involved are responsible and not responsible for. All items of importance to you should be agreed in writing. Problems often arise when the buyer has not established a clear-cut agreement with the vendor and broker, or when the car has been test-driven or collected by a friend of the buyer rather than the buyer himself.
Are you buying a car at a car dealership?
If you buy a car at a car dealership, the vendor is responsible for ensuring that the car complies with the minimum requirements of the relevant EU Directive. National consumer legislation at the point of sale may actually specify a higher level of requirements.
If the vendor does not market his cars in Finland and the transaction is concluded in another EU Member State, the transaction is usually governed by the legislation of the vendor’s home country. This may of course differ from Finnish legislation. For instance, in Germany vendor liability for defects is limited to two years, and in the case of a used car it may legally be limited to one year by mutual agreement. If a defect is found in the car later, it may prove difficult to fix, because under German legislation, almost without exception, the vendor has the right to repair the defect.
Are you buying a car from an authorised reseller?
Buying a car from an authorised reseller is usually safer than buying from a private individual in terms of avoiding and correcting defects. In Germany, dealerships that are members of the Deutsches Kraftfahrzeugegewerbe are generally committed to systems for settling disputes out of court, which is to the consumer’s advantage if a dispute arises.
In Sweden, members of the Motorbranchens Riksförbund (http://mrf.se/) abide by the organisation’s rules and the rulings of the National Board for Consumer Disputes. If a member company refuses to follow the rules, the organisation will ensure that the consumer receives compensation. According to the Swedish consumer protection authorities, it is inadvisable to deal with professional brokers who are not members of the organisation.
Are you buying from a professional broker?
A professional broker’s responsibility depends on the following:
- whom the broker is acting for
- whose national legislation applies
At the very least, a professional broker must execute his duties under the agreement with due diligence. A broker’s responsibility may be broader than this in legal terms, and may even be the same as a vendor’s responsibility.
If a Finnish broker markets his services in Finland and brokers a deal as the representative of a German private individual, under Finnish consumer protection legislation the broker has the same responsibilities as a vendor in the transaction. The broker is exempt from vendor responsibility if he:
- represents another business undertaking
- declares that he is only the broker
- declares that responsibility for the transaction rests with the vendor
If the transaction is concluded with a Finnish broker who is commissioned by the end buyer to import the car from Germany by first purchasing it himself, then the broker is the actual vendor as far as the end buyer is concerned. In such a case, the provisions on vendor liability for defects in Finnish consumer protection legislation apply.
If, on the other hand, the buyer commissions a Finnish broker to import a car from Germany at the buyer’s expense, the broker’s responsibility is limited to what is specified in the agreement. It is absolutely vital to be careful in selecting a broker.
Two private individuals or two entrepreneurs
Consumer protection legislation does not apply to transactions between two private individuals or between two entrepreneurs, and the consumer protection authorities will not assist in settling disputes arising from such transactions. Consider the matter very carefully if you are thinking of having a friend, or perhaps someone you know in Germany, test-drive a car or bring a car to Finland on your behalf. Consumer protection legislation does not assign liability to a careless friend who causes damage in such a case.
Ensure that the transaction agreement is not drawn up as a transaction between two entrepreneurs. In Germany, this type of agreement is indicated by the term Händlergeschäft.
Buying off the street?
If you buy a car ‘off the street’ from a private individual, you have practically no protection whatsoever. Although a car bought from a private individual may be cheaper than one bought at a dealership, you need to be extremely careful. However, you also need to know this: if you buy a car in Germany from a self-employed person such as a doctor, an attorney, an architect or a farmer who has used that car for professional purposes, then the seller is considered an entrepreneur in the transaction for the purposes of consumer protection legislation.