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Thinking of buying a second-hand car - a nice classic car, a family car or an RV? When buying a car privately, there are a few points to consider so that you don't get stuck by the side of the road with your vehicle. In this blog, our legal expert at AXA-ARAG explains what a written purchase agreement must contain and how you can protect yourself against defects. We also provide you with a template for the car purchase agreement for your used car.
For private car purchases, a written purchase agreement is essential, as this protects both buyers and sellers. Here are the main points that this type of contract should include:
In addition to a water-tight purchase agreement, there is more to consider when buying a car privately. In particular, a thorough inspection of the vehicle and a test drive are crucial to ensure that you do not have any nasty surprises. If possible, you should bring a specialist to the inspection who can detect technical defects immediately. A good purchase agreement gives you legal protection, but a careful inspection of the used car is still essential.
It's advisable to obtain a written purchase agreement so that you have proof. Record the guaranteed features in it and check the contract point by point before signing it. The contract should mention the vehicle with its key features, such as the car's make, model, chassis number etc.
There's no special form prescribed for buying a used car. It can either be concluded verbally or even implied. This means that you give the seller cash, for example, and you receive the car keys in return. Other questions about buying a car from a private seller:
When you buy a car, the seller is obliged to disclose damage incurred through accidents without being asked to do so. If it is subsequently determined that the purchased car has suffered damage – with the exception of insignificant damage such as minor bodywork or paintwork damage or a scratched fender – the seller can be prosecuted. In this case, the buyer can ask for a price reduction or change to the contract.
The guarantee is not governed by law. Its scope is determined in accordance with the agreement between the parties and must be found, for example, in the GTC. The burden of proof for the existence of a guarantee case lies with the buyer.
The guarantee in a purchase agreement can be contractually excluded, limited or expanded. There is no particular way of excluding or limiting a material warranty, therefore an implicit or implied exclusion of defect rights is also possible.
An agreement to exclude or limit the guarantee is void if the seller has fraudulently concealed the failure to comply with warranty from the buyer (Art. 199 Swiss Code of Obligations). The burden of proof in this instances lies with the buyer, but it is normally difficult to obtain proof. Generally held limits of liability or exclusion clauses have no impact on the seller's liability for specifically guaranteed features.
An example of a comprehensive exclusion of guarantee rights would be:
However, the following formulation would be insufficient:
Implied and implicit exclusion:
It's a good idea to have a second-hand car checked over by an independent body prior to purchase. If the vehicle is being offered without a guarantee and with a warranty exclusion as well as with no current motor vehicle inspection, you should have the vehicle looked at in more detail.
The burden of proof rests with the party claiming the defects, i.e. the buyer. This means that the buyer also pays for the cost of subsequent improvement.
Buying a used car from a private individual can be an inexpensive alternative to a new car. But to make sure you’re making a good deal and don’t have any nasty surprises later on, there are a few important things to keep in mind. In addition to drawing up a purchase agreement for the car, careful preparation is essential to avoid hidden defects and correctly assess the value of the car. This checklist sets out the most important points for you:
Remember: careful inspection of the vehicle and a clear drafting of the contract are the key to a successful private car purchase.
There is no statutory procedure for buying a used car privately. A purchase agreement can therefore also be concluded verbally or through what is known as implicit action. This means that the purchase is legally binding when you hand over the money to the seller and receive the key in return. Nevertheless, a written purchase agreement for the car is strongly recommended as a legal safeguard. If you do not use a contract, at least all important agreements should be recorded in writing.
In practice, the purchase process often proceeds as follows: after you have inspected the vehicle, taken a test drive and clarified all the unanswered questions, the money as well as the car key and vehicle documents are handed over. Ideally, this is done together with a signed purchase agreement that sets out all the essential points. Use our car purchase agreement template for this.
Whether you should buy a used car privately or from a dealer depends on your needs and priorities:
Buying from a dealer thus offers more protection, while buying privately is often cheaper but more risky. It depends on how much security you want and how much you are willing to pay.
If the purchased vehicle has a significant defect or if a feature stipulated in the car purchase agreement (“accident-free,” “no bodywork damage”) proves to be incorrect, the statutory warranty provides for two options:
A reduction or cancellation can only be requested if you inspected the purchased vehicle immediately and reported the defect straight away. The complaint must contain an exact description of the defect and state that you are making a warranty claim. The seller must be informed of the complaint by registered mail as soon as the defect has been detected. If the purchased vehicle and/or subsequent notification of any defects is not performed immediately, the vehicle condition is thereby tacitly approved and you lose your right to claim.
The difference between “minor defects” and “serious defects” is ultimately at the discretion of the judge. Experience has shown that cancellation in borderline cases is difficult to enforce in court. Further answers to the most important questions about defects and guarantees:
If there's a material defect, the buyer can invoke the warranty, fundamental error or willful deceit.
First it must be established if there is a defect. A material defect under Art. 197 (1) Swiss Code of Obligations means a difference between the actual and agreed condition. The seller is liable for the absence of expressly guaranteed features as well as for any defects that cancel or significantly reduce the value or suitability of the car.
The seller is liable even if they are not aware of the defects (Art. 197 (2) Swiss Code of Obligations). This is what is known as causal liability, i.e. the seller is liable even if they are not at fault.
When there are defects, the law provides the buyer with various rights: cancellation of the purchase (cancellation), reduction in the purchase price (reduction) and, if the seller is at fault, compensation. However, the law does not provide for improvement, but this can be agreed. Please see the box below for more information.
You can take out a used-car guarantee in addition to the statutory warranty. A used-car guarantee gives the buyer the assurance of defect-free functioning of specific components in second-hand cars for a specific period.
As a result of this guarantee, the customer may claim improvement, but the conditions of the guarantee do not normally provide for a reduction in the purchase price or return of the vehicle.
For second-hand vehicles, a garage usually offers the minimum guarantee of three months on vehicle parts as well as the work done. If it doesn't, then you shouldn't buy the vehicle. A one-year guarantee insurance is also often offered to supplement the minimum guarantee, such as Quality1 or Mobile Garantie. Garages vary in what this type of guarantee covers. You often have to make a contribution towards this. You should closely study the terms and conditions of business.
If you buy a used car, you should expect to acquire a roadworthy and safe vehicle. Here, however, you should take account of the circumstances such as age, mileage and price of the vehicle. If, following the purchase, the vehicle turns out to be defective despite careful examination, you as the buyer must act quickly.
If a guarantee has been agreed in the purchase agreement, you can refer to this. And even if the used car was sold without a warranty, you as the buyer are protected to a certain extent: a statutory warranty applies to every transaction in Switzerland – and that includes used car sales. In other words: The seller is obliged to provide you with a vehicle that is free from defects that reduce its value or make it impossible to use. The statutory warranty obligation may, however, be contractually excluded.
If the warranty has not been excluded, you must report the defect within two to three days of discovering it. You can decide what form the complaint takes, but we recommend that you do so by registered mail so that you have proof. You should list the defects in as much detail as possible.
The complaint must contain the aim (warranty) or which option you wish to assert (cancellation, reduction, improvement and replacement delivery).
The statutory warranty obligation can be modified or even excluded entirely by the seller in the purchase agreement. There is often an attempt to exclude the above-mentioned right of reduction (that allows you to demand a reduction in the selling price in case of a defect) and the right of cancellation (cancellation of the purchase agreement). You should not accept the complete exclusion of the statutory warranty obligation as a buyer. If the seller is inflexible in this regard, you must rethink the purchase.
Improvement in purchase law means the removal of the defect by car seller themselves or at their own cost. The law does not provide for any claim to improvement for the car buyer.
However, if both parties agree, then improvement can be agreed.
Nadine Graf is a theme manager and writes texts for AXA on topics related to insurance and beyond.
