How assigned warranty rights work, what you can do against them, and what applies in a return dispute.
Does your leased electric car have a defect, such as a problem with its range or battery? Unlike with a purchase, your warranty rights in a lease are usually directed not against the leasing company, but against the supplier. This article explains how these assigned rights work, what you need to consider when terminating the lease, and what applies in disputes regarding the return of the vehicle.
The typical leasing triangular relationship
Vehicle leasing involves three parties. You, as the lessee, enter into the lease agreement with the lessor, usually a bank or leasing company. The lessor, in turn, purchases the vehicle from the supplier, i.e., the dealer or the manufacturer's distributor, and makes it available to you for use.
This situation is the reason why your rights in the event of a defect differ from those of a traditional purchase. This is because the contracting party in the purchase agreement is not the lessor vis-à-vis you, but rather the lessor vis-à-vis the supplier.
Who the right contact person is in the event of a shortage depends precisely on this triangular relationship. This is often confused and leads to errors.
Is your leased electric car defective, and you don't know who to contact? Have your situation reviewed.
Why you need to contact the supplier
In almost all lease agreements, the lessor's own liability for defects is excluded. This is legally permissible, but only because the lessor, in return, assigns their warranty rights from the purchase agreement to you. This is known as the assignment structure typical of leasing.
For you, this means: If defects occur, you must assert your warranty rights under sales law in your own name against the supplier, i.e., the seller of the vehicle. The leasing company is generally not the correct party to contact regarding liability for defects.
It's worth taking a look at the lease terms and conditions, as they stipulate how you must proceed and what your obligations are. Often, you are even required to pursue claims against the supplier.
Are you unsure who to take action against? We will review your lease terms and identify the correct party.
Your rights regarding defects against the supplier
The assigned rights entitle you to the same tiered warranty rights as a buyer, as regulated in § 437 of the German Civil Code (BGB). These rights are directed against the supplier.
- Subsequent fulfillment: You can request rectification or replacement, for example, the repair of a battery or software defect.
- Reduction: If the defect leads to a reduction in value, a reduction in the purchase price may be considered, which may affect the lease.
- Resignation: In the event of a significant defect, the reversal of the purchase agreement may be considered, with far-reaching consequences for the leasing agreement.
- Damages: Additional costs, such as for an expert opinion, can be claimed as reimbursement.
Whether a defect exists at all, such as insufficient range, is determined according to the same criteria as during the purchase process. You can find further details on our page regarding this. Reversal of an electric car purchase due to insufficient range.
Which course of action is best for you depends on the defect and your lease agreement. We will assess your options.
The resignation and its consequences for the lease agreement
If you wish to dispose of the vehicle due to a significant defect, you must declare your withdrawal from the purchase agreement to the supplier. If the withdrawal is valid, the purchase agreement is transformed into a rescission agreement. This simultaneously eliminates the basis of the lease agreement, meaning that this agreement must also be reversed and you can reclaim any lease payments already made.
However, caution is advised, as the order is crucial. If the supplier does not accept the cancellation, you must enforce it legally. Only after you have filed a lawsuit against the supplier are you permitted to temporarily withhold the lease payments. And only if you win this case will both contracts be reversed.
This carries a risk you should be aware of. If you stop making payments too early without pursuing legal action to withdraw from the contract, you risk termination of your contract due to non-payment. And if you lose the case against the supplier, both contracts remain in effect, and you will have to repay all withheld installments and bear the associated costs. Therefore, anyone considering withholding payments should never do so without legal counsel.
Are you considering withholding payments due to a defect? Talk to us beforehand so that your legal right doesn't turn into a costly mistake.
Claims against the manufacturer
In addition to the assigned warranty rights against the supplier, independent claims may exist against the manufacturer. These exist alongside, and do not exclude, the rights relating to defects.
- Manufacturer's warranty: Many manufacturers offer their own warranty, for example on the capacity of the drive battery. If the capacity falls below the promised threshold, a warranty claim may apply.
- Damages: In cases of deception or a fundamental error, a claim for damages against the manufacturer may be considered, as was the case in the emissions scandal.
Rogert & Ulbrich are familiar with the legal mechanics of such manufacturer claims from numerous vehicle-related legal proceedings. emissions scandal familiar and can be applied to battery and software cases in electric cars.
You're unsure whether taking legal action against the manufacturer is worthwhile? We examine all potential defendants and choose the most promising course of action.
Return dispute and diminished value
Disputes often arise at the end of a lease, primarily concerning the vehicle's condition. The leasing company then demands payment for alleged damage or diminished value. It's important to distinguish between normal wear and tear and damage: you are not liable for damage beyond that.
It becomes particularly frustrating when a manufacturer's defect is attributed to the lessee as damages. An example of this is a case in which a Tesla customer was faced with a large claim for a production defect upon returning the leased vehicle, about which we reported in a separate article. You should not accept such demands without verifying them. Further details regarding returns can be found on our return policy page. Lease and rental car return.
Carefully document the condition of the vehicle upon return, ideally with photos and a handover protocol. This will allow you to contest any unjustified claims later.
Is your leasing company demanding money for alleged damage upon return of the vehicle? We will review the claim and defend against any unjustified demands.
Rogert & Ulbrich – Your lawyers specializing in electric vehicle defect law
Rogert & Ulbrich represents consumers nationwide in vehicle and contract law and has its own Automotive sector as well as a bundled page on Tesla defects. The law firm of Dr. Marco Rogert and Tobias Ulbrich has represented a large number of consumers in the emissions scandal for many years and conducted vehicle-related litigation against manufacturers and dealers. This experience in enforcement is now benefiting lessees of electric cars.
We clarify against whom you need to take action, review your lease terms, and enforce your rights against the supplier, lessor, and manufacturer. We support you in cases of cancellation and return disputes to ensure that a right doesn't turn into a costly mistake.
Is your leased electric car defective, or is the return process becoming a dispute? Get in touch and protect your rights.
