Which safeguards are truly effective, which clauses belong in the contract, and how to recognize an impending dealer insolvency.
When buying a motorhome, five-figure down payments are regularly due months before the vehicle is handed over. If the dealer defaults during this time, the money is tied up in the dealer's assets. Rogert & Ulbrich shows you what safeguards you can take before signing the contract and reviews your contract documents before you pay.
Why the down payment carries the biggest risk when buying a motorhome
Motorhomes are predominantly ordered according to configuration. Between signing the contract and delivery, there is often a six- to eighteen-month gap, and the dealer typically requires a down payment of ten to thirty percent of the purchase price. Economically, this means you are paying upfront without receiving anything in return and without security.
This advance payment is legally unsecured unless otherwise agreed. If the merchant defaults, your claim for reimbursement becomes a simple insolvency claim under Section 38 of the German Insolvency Code (InsO) and is therefore subject to distribution quotas. Furthermore:
- Vehicle stock not availableDealers regularly finance their inventory through purchase financing and transfer ownership of the vehicles to the bank as security. The ordered vehicle is then not freely available.
- No assignment: Before production, there is no individualized vehicle to which your payment could be assigned.
- Down payment is operating capitalThe down payment is regularly used for ongoing operations and is not held separately.
- Long lead timeThe longer the time until the handover, the greater the risk that the dealer's situation will deteriorate in the meantime.
Therefore, negotiate the security measures before signing. Afterwards, you no longer have any negotiating leverage, as the money has already been transferred.
Four safeguarding instruments and what they actually do
The common instruments differ considerably in their effectiveness. The crucial question in each case is whether the protection still applies if the retailer becomes insolvent.
- Advance payment guaranteeA bank or credit insurer guarantees the repayment of your deposit. This is the strongest security because it is against a solvent third party and is independent of the company's assets. Ensure that the guarantee is issued unconditionally and without the right to prior recourse under Section 773 of the German Civil Code (BGB), and that it is payable on first demand. In practice, larger retailers are the primary providers of such guarantees.
- escrow or notary accountThe deposit is not paid to the merchant, but to an escrow account and is only released upon delivery. Crucially, this must be a genuine escrow account and not a regular business account of the merchant simply named as an escrow account. Only then will the money not be part of the insolvency estate.
- Security assignment of an existing vehicleThe dealer will transfer ownership of a specific, existing, and unencumbered vehicle to you as security until delivery. This only works if the vehicle is not already assigned to the financing bank, which is usually the case. This option is therefore weak and only makes sense after checking the vehicle registration document, Part II.
- Premature transfer of ownership of the object of purchaseOnce the vehicle exists and can be individually identified, it can be transferred to you even before collection, by agreement and constitutio possessori (transfer of possession) according to § 930 of the German Civil Code (BGB). Then it belongs to you and not to the insolvency estate, and you would have a right of segregation according to § 47 of the German Insolvency Code (InsO). This requires a specific safekeeping agreement and the vehicle identification number (VIN) in the contract.
Don't rely on wording that merely promises security. The crucial factor is whether the claim in insolvency proceedings is directed against a third party or whether an item is being excluded from the insolvency estate.
What regulations should be included in the purchase agreement?
Regardless of the chosen security instrument, the risk can be significantly reduced through contract design. These points should be included in the contract before you make any payments.
- Limit heightA down payment of ten percent is standard practice and sufficient to secure the order. Larger advance payments should be secured by a guarantee or escrow account.
- Payment in installmentsDivide the payment into installments linked to verifiable events, such as the start of production, completion of assembly, and handover. The final installment is only due upon collection.
- Customize vehicleHave the vehicle identification number (VIN) included in the contract as soon as it is available. Without this identification, neither allocation nor disposal is possible.
- Binding delivery dateA fixed date instead of an approximate one. This allows for the establishment of rights of withdrawal and consequences of delay.
- Right of withdrawal in case of crisisA contractual right of withdrawal with an immediate repayment obligation in the event of the merchant's cessation of payments or insolvency proceedings. It is important that the repayment is actually made before the commencement of insolvency proceedings, because afterwards the administrator's right of election under Section 103 of the German Insolvency Code (InsO) applies.
- Secure payment method: Payment by direct debit, credit card or via a payment service instead of by bank transfer, because only there is a chargeback option available.
Have the draft contract reviewed before signing, as none of these clauses can be enforced later. You can find more articles about buying a vehicle in our section. Automotive.
Warning signs of impending retailer insolvency
The bankruptcies of recent years followed a recognizable pattern. In retrospect, the warning signs were there, but they weren't recognized as such during the sales negotiations. You should take these signals seriously before making any payments or authorizing further installments.
- Pressure for prepaymentPayment is demanded before the vehicle is finished or even produced, sometimes with promises of discounts or warnings of impending price increases. In the Camper Base case, precisely this pattern was the subject of a prosecutorial investigation.
- Refused documentsThe vehicle registration certificate, Part II, is not presented, or excuses are given for its whereabouts. This suggests that the vehicle has been transferred to the financing bank.
- Postponed datesDelivery dates are repeatedly postponed without any comprehensible explanation, and inquiries remain unanswered.
- Empty terrainSignificantly reduced vehicle fleet, closed workshop, reduced opening hours, noticeably few staff.
- Changed payment methodsSuddenly, a bank transfer is required instead of a card payment, to a different account or to a different company than the contracting partner.
- Public NoticesNegative reviews regarding missing deliveries, reports in trade publications, and indications of payment delays to suppliers.
If you notice several of these warning signs, do not make any further payments until the situation has been assessed. A purchase agreement is no reason to continue making payments during a clearly identifiable crisis.
What remains if the down payment has already been made but is not secured?
If the down payment has already been made and insolvency proceedings commence, the claim for repayment initially remains an insolvency claim under Section 38 of the German Insolvency Code (InsO). However, this is not the end of the examination, but rather the beginning of the search for defendants outside the insolvency estate.
- chargebackDepending on the payment method, options include reversing a direct debit within eight weeks, filing a complaint with the card-issuing bank, or submitting a buyer protection claim. This option is completely absent only for bank transfers.
- Check for disposalIf the vehicle already existed and there are indications of an agreement on the transfer of ownership, such as handed-over vehicle documents or a storage agreement, a right of segregation pursuant to Section 47 of the German Insolvency Code (InsO) may be considered.
- Use financingIf the purchase and loan form a linked contract, revocation and objections are governed by Sections 358 and 359 of the German Civil Code (BGB) and directed against the financing bank.
- People involvedIf payment was demanded even though insolvency had already occurred, claims against the management may be considered.
- Register claimRegardless, the claim under Section 174 of the German Insolvency Code (InsO) is timely. to log in to the table, as long as it is not clear whether another way is viable.
Pursue these avenues in parallel, as the deadlines run independently of the insolvency proceedings. We have explained the basics of recovery after a provider's insolvency in our article. Camping provider insolvent compiled, questions about the bank will be addressed in the banking law.
Special case of distance selling: the right of withdrawal as additional protection
One aspect is regularly overlooked when it comes to safeguarding, even though it's available without negotiation. If the purchase contract is concluded remotely, i.e., exclusively by telephone, email, or online form, a right of withdrawal of fourteen days exists according to Sections 355 and 312g of the German Civil Code (BGB). The same applies to contracts concluded outside of business premises.
This does not replace security for the deposit, but it gives you a way out if doubts arise after the contract is signed. These points are important:
- Only in the case of genuine distance sellingIf the contract was signed in the sales area, there is no right of withdrawal, even if the configuration was done online beforehand.
- No exception for configurationThe fact that a motorhome is equipped according to your wishes does not automatically eliminate the right of withdrawal. The exception for goods manufactured according to customer specifications is narrow and generally does not apply to vehicles with equipment options from a catalog.
- Incorrect instructionIf the customer was not properly informed about their right of withdrawal, the withdrawal period does not begin. However, in the case of the purchase of goods, the right expires no later than twelve months and fourteen days after the conclusion of the contract, according to Section 356 Paragraph 3 of the German Civil Code (BGB).
- Check financing separatelyIf the loan was financed, there is a separate right of withdrawal for the loan, where the period according to § 356b BGB only begins with complete mandatory information and no comparable maximum period applies.
Therefore, check how your contract was concluded before making any payment. Our website provides information on the cancellation and termination of financing agreements. Revocation and termination of leasing.
Rogert & Ulbrich – Your lawyers for securing advance payments
Rogert & Ulbrich represents consumers nationwide in matters of sales law, banking law, and insolvency law. Attorneys Dr. Marco Rogert and Tobias Ulbrich and their team are familiar with the contracts of motorhome dealers, the structures of purchase financing, and the requirements for collateral that actually holds up in insolvency proceedings.
We review your draft purchase agreement before you sign it, assess the insolvency-proof nature of any offered collateral, and formulate the necessary provisions regarding payment terms, customization, and rights of withdrawal. If payment has already been made and the seller has defaulted, we ensure compliance with chargeback deadlines and examine options for segregation, financing, and claims against management. If an out-of-court settlement cannot be reached, we will also represent you in court proceedings.
Are you being asked to make a large down payment for a motorhome, or have you already paid? Contact us for a free consultation and let us review your insurance coverage.
