European Court of Justice [ the “ECJ” ] rulings previously established that a consumer’s right to withdraw from a credit agreement is only limited to the 14 days following conclusion of the agreement if the consumers were given “clear and concise” information on when and how they could withdraw, and that the applicability of the Consumer Credit Directive meant that auto loan agreements referencing the German civil code did not do this. Where loan agreements are found not to have met this standard, the borrower can exercise revocation rights at any point in the lifetime of the loan.
On the 9th. of September 2021 the ECJ found mandatory information to be missing from certain applicable German loan documentation and in addition it found limitations in arguments used by lenders to counter borrowers’ attempts to revoke contracts.
The relevance of this ruling is that If a borrower chooses to revoke the loan, the purchase agreement is also unwound and the vehicle must be returned. It has been noted that relatively few borrowers have taken advantage of this provision but some owners of diesel vehicles [ such as the Volkswagen cars affected by the emissions scandal ] that do not comply with emissions regulations have done so.