For many drivers, car warranty service is associated with safety and trust. It’s only natural to expect that a vehicle entrusted to an authorized dealership will be professionally inspected, repaired, and returned in the same condition as when it was dropped off. But what should you do if, while the car is in for warranty service, it is involved in a traffic accident and is damaged by a service center employee?
The Supreme Court of Lithuania recently examined precisely this type of situation. In the case, a consumer took a new car to an authorized service center for a warranty inspection of the brake system. During a test drive on the street, a service center employee was involved in a traffic accident, and the car was damaged. The consumer decided that he no longer wanted the car, unilaterally terminated the sales contract, and demanded a full refund of the purchase price as well as compensation for damages.
However, the court did not agree with this position. As Mantas Baigys, an attorney with the AVOCAD law firm, points out, this ruling clearly distinguishes between two situations that are often confused—the application of a guarantee and compensation for damages.
“If a car has a manufacturing defect or some other quality issue, the consumer can exercise the rights provided by the warranty. However, if the car was damaged after it was delivered to the buyer—even during warranty service—the warranty terms alone no longer cover such a situation,” says M. Baigys.
In this case, the courts determined that the car was delivered to the buyer in good condition. The defects that arose later were not related to a manufacturing defect or a defect covered by the warranty—they were caused by a traffic accident resulting from the actions of a service center employee. Therefore, according to M. Baigio, such a dispute should be assessed primarily not as a problem with the quality of the item sold, but as a matter of compensation for damages.
What can a car owner demand?
Although the consumer in this case was unsuccessful in his claim to terminate the sales contract and recover the full price of the car, this does not mean that he is left without protection. The service center is liable for the actions of its employees; therefore, in such cases, a claim for compensation for the damages incurred may be filed. “The court essentially ruled that the service center cannot avoid liability. However, this liability arises not because the warranty was breached, but because damage was caused to another person’s property. In such cases, the consumer has the right to demand full compensation for the damages,” comments M. Baigys. In practice, this may include car repair costs, a decrease in market value, the cost of a rental car, or other losses incurred as a result of the incident. In each case, it is important to assess whether the proposed solution truly compensates for all the damages incurred, rather than just the most obvious repair costs.
According to M. Baigio, in such situations, one should not rush to sign documents confirming that there are no further claims against the service provider. “If this is a matter of compensation for damages, the consumer has the right to demand full compensation for their losses. Therefore, before accepting an offer from a service center or insurance company, it’s worth making sure that it covers not only the car repairs but also other actual consequences,” the attorney notes.
The most important thing is to choose the right way to protect your rights
This ruling by the Supreme Court of Lithuania is significant because it serves as a reminder that the mere fact that a car was damaged during warranty service does not, in and of itself, entitle the buyer to rescind the purchase and sale agreement and demand a full refund of the price paid for the car. If the car was of satisfactory quality at the time of sale and the damage was caused by a subsequent traffic accident, the dispute should generally be resolved through a claim for damages.
On the other hand, this does not mean that the consumer must accept any offer made by the service provider. By entrusting their car to a professional service provider, the consumer has a reasonable expectation of getting it back safe, in good working order, and without any loss of value due to the service provider’s actions. Therefore, the damage caused by the service provider must be assessed realistically, and the compensation must be adequate. “In such situations, what matters most is not an emotional decision, but a carefully chosen legal course of action. A demand for a full refund of the car’s purchase price may seem logical to the consumer, but legally it may not necessarily be justified. Meanwhile, a properly formulated claim for damages can be significantly more effective,” concludes M. Baigys.