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A new edition of the "Autofestival" (car festival) in Luxembourg will take place Saturday 20 January to Saturday 3 February 2024.
Ahead of this popular commercial event, Luxembourg's Directorate for Consumer Protection has shared its advice on contracts.
Each year, the Autofestival attracts many consumers looking for the latest vehicle models and discounts. During this period, various contracts are concluded between automotive professionals and consumers, such as purchase, credit and leasing contracts. In this context, the Consumer Protection Directorate has recalled the rules that govern the various contracts, in particular with regard to the right of withdrawal and the obligation that professionals provide clear and understandable information to consumers before signing any contract.
Purchase contracts
The Consumer Protection Directorate noted that, generally speaking, a distinction must be made between a contract concluded in the professional's establishment and a contract concluded remotely or outside the establishment. Consumers who conclude a distance and off-premises purchase contract have a fourteen-day right of withdrawal (without having to give any reason). This right does not apply in the context of a contract concluded on-site with the professional. However, it is possible that the seller grants a contractual right of withdrawal on his/her own initiative. In this case, the terms (i.e. how and when) must be clearly indicated on the order form. This possibility does not constitute an obligation on the part of the professional.
The directorate added that if the consumer decides to unilaterally end the contract, he/she runs the risk of having to pay damages to the professional dealer or having to pay, where applicable, the amount provided for in the penalty clause included in the contract. The professional is entitled to demand contract performance and to force the consumer to accept delivery of the vehicle under the conditions provided for in the contract.
Leasing contracts
The directorate advised consumers to be careful when signing a car leasing contract without obligation to purchase, i.e. a contract in which a person rents a vehicle for a specific period without being obliged to buy the vehicle at the end of the contract. A recent judgment of the Court of Justice of the European Union (CJEU) confirmed that consumers who conclude a car leasing contract without obligation to purchase do not have a right of withdrawal, except in the case where they have not been correctly informed of their rights and obligations.
Consumer credit agreements
For consumer credit agreements, consumers have a fourteen-day right of withdrawal. This withdrawal period only starts when the consumer has received complete and precise information.
The Consumer Protection Directorate also recalled that signing an order form results in the formation of a contract with the professional. With their signature, both parties are validly bound and must execute the contract, i.e. the professional must deliver the vehicle ordered within the time limits indicated and the consumer must pay the price stipulated in said document.
Once again this year, the Consumer Protection Directorate will be carrying out checks on vehicle dealers throughout the festival. These checks will look in particular at the correct display of prices for vehicles and products sold, among other areas.
Luxembourg's Minister for Consumer Protection, Martine Hansen, emphasised that "the Directorate for Consumer Protection always strives to assist companies in respecting consumer rights. We firmly believe that the best approach is close collaboration with professionals. This is why we inform professionals ahead of the festival about their legal obligations and support them in the event of a problem. However, our agents will remain vigilant regarding compliance with legal provisions throughout the festival. We recommend that consumers always take the time to read and understand the terms of contracts before signing them, in order to avoid complications later."
