Shifting Gears: Exploring the Right to Withdraw for Vehicle Leasing

Description

The transition from ownership to usership is regarded by policymakers to render consumer choices more sustainable. This transition seems to be taking off, especially within the mobility sector. Consider, for example, leasing (without purchase obligation), where consumers no longer necessarily own vehicles but instead remain users of them. With the lease provider retaining ownership, there's an incentive to prolong the product’s life cycle through diligent maintenance and repairs. Especially because leasing (without purchase obligation) seems to gain momentum, it is important to consider its effect on consumers and their protection.
The European Court of Justice has recently clarified the right to withdraw of consumers in the field of leasing and financing of vehicles. The Court confirms that the consumer of a credit in principle always has a right of withdrawal, while with a lease agreement without a purchase obligation, there is no right of withdrawal for the consumer under EU law, even if the agreement was concluded at a distance or away from commercial premises.

This discrepancy in consumer protection, whereby the consumer of a lease (without purchase obligation) has no right of withdrawal at all compared to financing of vehicles, is not justified given the comparable position in which the consumer finds himself, i.e. a large financial obligation is entered into for a longer period of time. In this contribution I will examine the parallels between these contracts from a consumer perspective and the difference in the right of withdrawal in the current European legal framework and assess whether this discrepancy is justified and logical in general, but also considering the surge of the mobility transition as this could possibly be an obstacle for consumer protection. Additionally, I will propose solutions for the lack of the right of withdrawal in scenarios where ownership of a vehicle is not transferred, such as leasing.

Period	17 Sept 2024 → 18 Sept 2024
Event title	European Conference of the International Association of Consumer law: Global challenges for consumer law and policy in contemporary Europe
Event type	Conference
Conference number	1st
Location	Cambridge, United KingdomShow on map
Degree of Recognition	International