Who is selling the car?
From legal standpoint it can make a big difference who is selling you the used car.
- Private person
If you buy used car from a private person you are less protected by the law. If there is a dispute between two private individuals, you, as the buyer, cannot file a complain to the Complaints board for goods and services. You would have to go to court.
- Business If you buy used car frombusiness(car rental agency or car dealership) you are better protected by the law, but only if the previous owner of the vehicle was a business In case of legal disagreement you can file a complaint to the Complaints board for goods and services or the Motor Trade Disputes Committee.
- Dealership as middleman
Car dealerships selling used cars are often just the middlemen, hence; not the real owner of the car. You must therefore direct any claim to the actual seller (previous owner) if a dispute arises.
Your duty to inspect
As a buyer, you are expected to check the car carefully before buying. If you miss something obvious (something you were supposed to see) you may not be able to claim it as a defect later.
The seller must inform you about known problems such as damage and repairs. If the seller hides something or lies to you, he can be liable. It is important that all the information you receive about the car's condition are detailed and preferably in writing.
Have the car inspected before purchase
Used cars should always be inspected before purchase. It is important to distinguish between a regular vehicle inspection and a pre-sale inspection.
- A regular vehicle inspection (aðalskoðun) is Iceland's mandatory roadworthiness test (like) an MOT. Passing it only means the car meets the minimum requirements set by the authorities and is therefore not dangerous on the road. It does not necessarily mean that the car is in good condition.
- Pre-sale condition check (ástandsskoðun). This is optional but highly recommended. An inspection centre checks the undercarriage, tyres, steering, and more — things a regular test won't flag, like hidden rust.
Defects — What to do?
Many complaints concern defects — that is, the buyer believes the vehicle has a defect and asks what can be done. Used cars are prone to breaking down. That alone does not necessarily constitute a defect. What matters is whether the seller concealed information, such as the gearbox having had repeated problems. As mentioned above, the buyer also has a strong duty to inspect. If the defect is something the buyer clearly should have noticed during inspection, it may be difficult to make a claim against the seller. In short, a used car is not considered defective unless its condition is worse than the consumer could reasonably have expected based on the purchase price and other circumstances.
Written purchase agreement
The Automobile Association of Iceland (FÍB) strongly emphasises that people should draw up a written purchase agreement, as this significantly reduces the likelihood of difficult disputes afterwards. The agreement should include clear information about the condition of the car and the terms that the seller and buyer have agreed upon. A standard purchase agreement can be found here.
Keep in mind when buying a used car
- Before making an offer it is worth checking what prices are being asked for comparable cars. It is fairly easy to look up older listings, for example on Facebook or on comparison websites.
- Look up the make and model year you have in mind. Are there any known issues?
- Look up the licence plate number in the vehicle registry. There you can find the ownership history and damage history of the car.
- Get information about previous repairs.
- Have a professional inspect the car. If there is no one like that in your family or circle of friends, you can purchase a pre-sale check from inspection centres.
- Try to perform a careful test drive: How does the car behave at low speed? Does the car pull unusually to the right while driving? Do you hear a strange noise when making turns?
- If a large sum of money is involved, it may be worth looking into whether it is possible to split the payment in some way.
- Draw up a written purchase agreement.
- Get information about the car's service history and whether it is still covered by the manufacturer's warranty.
