Definition and Legal Foundations of the Motor Vehicle Trade
Der Motor Vehicle Trade includes the commercial activity of purchasing and selling motor vehicles, which in particular comprise passenger cars, commercial vehicles, motorcycles, and their trailers. The legal regulations governing the motor vehicle trade are diverse and stem from a multitude of laws, ordinances, and subordinated regulations. Central legal aspects concern, among others, the licensing of business activity, types of contracts in vehicle trade, consumer protection issues, tax provisions, special rules for used vehicles, as well as environmental and prohibition regulations.
Trade Law Requirements
Registration and Operation of the Business
Anyone wishing to operate as a motor vehicle dealer is subject to the provisions of the German Trade Regulation Act (GewO) and must register the intended business with the competent municipal authority (§ 14 GewO). Registration applies to the trade of new and used motor vehicles as well as their spare parts. Special requirements may apply when dealing with high-value vehicles, classic cars, or imported vehicles.
Reliability and Licensing Requirements
The operation of the motor vehicle trade requires personal reliability as defined by the GewO. In cases of significant prior convictions or proven unreliability, the business license may be denied or revoked. Certain activities related to financing or leasing are also partially subject to licensing requirements under the German Banking Act (KWG).
Compliance with Ancillary Trade Obligations
Motor vehicle dealers are required to keep business records, maintain proper accounting, and retain business documents in accordance with the principles of proper accounting and the provisions of the German Commercial Code (HGB). Notification obligations under the Fiscal Code (AO) and Value Added Tax Act (UStG) must also be observed.
Civil Law Aspects of Motor Vehicle Trading
Types of Contracts and Contract Conclusion
In the motor vehicle trade, purchase contracts (§§ 433 ff. BGB) are the standard. Contracts with business clients are subject to different rules than those with consumers (B2C transactions). In addition to classic purchase contracts, leasing agreements, exchange contracts (trade-in), and commission transactions are also concluded in the motor vehicle trade.
General Terms and Conditions
General terms and conditions in the motor vehicle trade are subject to review in accordance with §§ 305 ff. BGB. Clauses affecting liability, warranty, or rights of withdrawal must comply with statutory requirements and may not diverge from essential legal provisions to the detriment of the contractual partner.
Special Features of Consumer Contracts
Right of Withdrawal and Distance Selling
Distance selling contracts with consumers (e.g., online vehicle purchase) are subject to the right of withdrawal pursuant to §§ 312g, 355 BGB. Motor vehicle dealers are obliged to properly inform customers about their right of withdrawal. In cases of incorrect information, the withdrawal period may be extended.
Information Obligations and Consumer Rights
In addition to the withdrawal information, dealers are obligated to inform consumers about relevant vehicle data, defects, mileage, and the presence of accident damage. Failure to fulfill information obligations may lead to contract rescission or claims for damages.
Warranty and Liability for Defects
Statutory Liability for Defects
Statutory liability for defects (§§ 434 ff. BGB) applies to both new and used vehicles sold. Liability for defects in new vehicles cannot be restricted, whereas in the case of used vehicles it can be reduced to one year under § 476 BGB, provided this is stipulated in the contract.
Reversal of the Burden of Proof
If a defect arises within the first twelve months after the handover of a vehicle, it is presumed that the defect already existed at the time of handover (§ 477 BGB). During this period, the dealer bears the burden of proof to the contrary. In practice, this is particularly significant in the used car trade.
Exclusions of Liability and Their Limits
A complete exclusion of liability for defects is not possible in transactions with consumers. Only in business transactions between companies (B2B) may liability for defects be excluded in full. If a defect is fraudulently concealed, any exclusion is always invalid.
Tax Regulations in the Motor Vehicle Trade
VAT Treatment
Sales of motor vehicles are generally subject to VAT (value added tax). In the sale of used vehicles, the so-called margin scheme (§ 25a UStG) often applies, which means tax is charged only on the trading margin.
Motor Vehicle Tax and Tax Obligations
As part of the motor vehicle trade, aspects of motor vehicle tax can also become relevant, for example, in the operation of one’s own fleet or during so-called transfer journeys using red dealer license plates. Motor vehicle dealers must also comply with tax obligations when acquiring and selling vehicles (e.g., documentation as per § 22 UStG).
Environmental and Vehicle Registration Law Framework Conditions
Legal Waste Disposal Obligations
End-of-life vehicles are subject to the Circular Economy Act (KrWG) and the End-of-Life Vehicle Ordinance. Dealers who take on vehicles for recycling are deemed manufacturers or distributors as defined in the regulation and have obligations for take-back and disposal.
Registration and Use of Temporary/Dealer License Plates
Motor vehicle dealers are entitled to apply for red dealer license plates (“06 license plates”). Their use is strictly regulated and monitored by the registration authority. Vehicles may be operated with dealer license plates only for inspection, test, and transfer drives.
Environmental Zones, Emission, and Safety Regulations
In the vehicle trade, regulations regarding environmental zones, emissions standards, and safety requirements must also be complied with. The sale of vehicles that are not approved or do not meet current environmental standards is subject to restrictions. Violations are penalized with fines.
Data Protection Requirements
As part of their operations, dealers process personal data (e.g., customer and vehicle data). The requirements of the General Data Protection Regulation (GDPR) and the German Federal Data Protection Act (BDSG) must be observed. This includes information, consent, secure data storage, and deletion obligations.
International and Cross-Border Aspects
The motor vehicle trade may also extend to cross-border sales. In such cases, customs, tax, and notification provisions must additionally be considered. The delivery and transfer of motor vehicles to EU or non-EU countries are subject to different registration, tax, and licensing procedures.
Conclusion
The motor vehicle trade is regulated by a large number of legal provisions derived from both national and European law. Trade law, civil law, tax law, environmental law, and data protection law form the most important pillars for the legally compliant practice of this activity. Anyone operating in the motor vehicle trade must observe comprehensive legal obligations to minimize liability risks and comply with legal requirements. Consistent observance and implementation of these rules is essential for a lawful and sustainable business operation.
Frequently Asked Questions
What legal obligations exist when selling a used motor vehicle to a private individual?
When selling a used motor vehicle to a private individual, the seller has numerous legal obligations. First, under § 433 BGB, the seller is obligated to hand over the vehicle free of material and legal defects and to transfer ownership. As a rule, liability for defects cannot be fully excluded in sales to private individuals, unless it is a private sale; in commercial transactions, it is possible to shorten the liability period for used vehicles to one year (§ 476 (2) BGB). Sellers must also disclose all known defects and document them in the written purchase contract, as concealed defects may give rise to contract rescission or claims for damages. Furthermore, the seller is required to provide correct handover of all documents belonging to the vehicle, particularly the registration certificate Part II (Kfz-Brief), registration certificate Part I (Kfz-Schein), the latest inspection report (HU-Bericht), and all keys. The seller is also obliged to notify the registration authority and, if necessary, the insurance company of the deregistration or re-registration of the vehicle without delay. It is advisable to secure the handover with a detailed handover protocol to avoid later disputes.
What requirements must a motor vehicle dealer observe in relation to warranty?
Motor vehicle dealers are subject to stricter statutory warranty requirements than private individuals. As prescribed by §§ 437 ff. BGB, there is a two-year liability for defects for both new and used vehicles. However, in the case of used cars, the warranty period can be reduced to one year in contracts with consumers by explicit agreement. A complete exclusion of liability is ineffective in commercial sales to consumers under § 476 (1) BGB. The dealer is therefore liable for all defects present at the time of handover, unless such defects are expressly disclosed. Within the first 12 months after handover, the burden of proof is reversed in favor of the buyer (§ 477 BGB), i.e., in the event of a dispute, the dealer must prove that the defect did not exist at the time of handover. Moreover, the definition of a material defect is broad, meaning deviations in indicated mileage, accident damage, or manipulation also count as defects. Offers and contracts must also include a clear description of the vehicle and any known defects.
What information obligations exist for online motor vehicle sales?
The online sale of motor vehicles is subject to the requirements of distance selling law (§§ 312c ff. BGB) and e-commerce. Commercial dealers are obliged to provide buyers with detailed information about the vehicle and the purchasing process. The information obligations include details about the vehicle model, year of manufacture, previous use, freedom from accidents, all defects, mileage, price, and the essential contractual elements. Dealers must also inform buyers about the right of withdrawal and provide withdrawal instructions, since in distance contracts, consumers generally have a 14-day right of withdrawal unless the vehicle was custom built based on customer specifications. The general terms and conditions, privacy policy, and a legal notice with all mandatory information in accordance with § 5 TMG must be made available on the sales platform. Failure to fulfill the information obligations may result in warnings and legal disadvantages.
Under what conditions is an exclusion of warranty legally valid when selling?
A complete exclusion of warranty is only possible in private-to-private sales (§ 444 BGB). However, the exclusion does not apply to defects that have been fraudulently concealed or to expressly warranted characteristics. In commercial sales to consumers, a warranty exclusion is generally ineffective under current law (as of 2024). It is only permitted to shorten the warranty period for used vehicles to one year by contractual agreement. In sales between businesses (B2B), the warranty may be excluded to a certain extent if freely agreed upon by the parties and provided no fraud is involved. Exclusion clauses must be explicit and clearly stated in the purchase contract, and should cover all likely scenarios without violating mandatory legal requirements. A general phrase such as “sold as seen” is insufficient if the seller was aware of certain defects and concealed them.
What legal aspects must be observed in the registration and re-registration of a sold motor vehicle?
After the sale of a motor vehicle, the seller has both civil law and public law obligations. It must first be contractually determined whether the vehicle is to be delivered deregistered or still registered. If the vehicle is sold while still registered, the seller should require the buyer to re-register it immediately. Under § 13 FZV (Vehicle Registration Ordinance), the seller is obliged to notify the competent registration authority of the change of ownership without delay. Failure to do so may result in the former owner remaining liable for vehicle tax and traffic violations. For his own protection, the seller should retain a copy of the purchase contract and, if applicable, confirmation of the re-registration. The insurance company must also be informed, as re-registration results in a change of policyholder and requires new third-party liability insurance. If the buyer delays re-registration, the seller has the right to deregister the vehicle himself.
What legal requirements apply to purchase contracts in the motor vehicle trade?
Purchase contracts for motor vehicles are subject not only to the general law of obligations of the BGB but also to the special provisions of sales law (§§ 433 ff. BGB). The contract must contain at least details of the contracting parties, a detailed description of the vehicle (make, model, VIN, year, mileage, equipment), the purchase price, date of handover and payment, as well as provisions on liability for defects. Additional information such as the number of previous owners, details of prior accidents or repairs, and the availability of maintenance records are usual and legally advisable. In the commercial sector, further information and documentation obligations apply, such as those regarding general terms and conditions. In distance contracts, statutory rights of withdrawal and instructions must be observed. If the contract is not made in writing, proving facts during disputes may be difficult; therefore, the written form is strongly recommended.
