A trade-in dispute : The Court rules in favour of the dealership

Me Marie-Eve Thériault / LDB Attorneys LLP

Buying a new vehicle, especially after months of waiting, can sometimes lead to misunderstandings. This is what happened to two customers who wanted to trade in their 2013 Toyota Corolla for an all-new 2023 Volkswagen Taos Trendline FWD. Their misadventure went all the way to the Court of Quebec, Small Claims Division in Fethallah v. Volkswagen Gabriel Saint-Constant¹.

Background

In June 2023, the couple went to Volkswagen Gabriel Saint-Constant to negotiate the purchase of the new Volkswagen. The sales manager offered them a price for the new vehicle and estimated that the Toyota offered as trade-in was worth $10,700. The coveted Volkswagen was not in stock, so it had to be ordered. No contract was signed, no deposit was required, but screenshots of the prices were provided to confirm the agreement. The prices would be valid for a period of four months.

A few months later, things got complicated. The general manager confirmed that the new vehicle had been ordered, but reassessed the Corolla at $8,000, $2,700 less than the first estimate. The customer believed that the dealership acted in bad faith and claimed nearly $14,956.62 in damages.

The issue at the heart of the dispute

The court had to decide a simple question: had the dealership committed a fault by reducing the assessed value of the trade-in vehicle?

The court’s analysis

In her decision, the judge stated a well-known principle of automotive contracts: when a trade-in vehicle is not brought in immediately, the dealership has the right to reassess its value at the time of delivery, which was also provided for in the Volkswagen contract, filed in evidence.

Since normally customers continue to use their car while they wait for the new vehicle to be delivered, this use leads to wear and tear and higher mileage — or even damage — which justifies a new assessment.

The court therefore ruled that Volkswagen Gabriel Saint-Constant had not committed any fault: the reduction in the trade-in price was justified by the reality of the market and the usual terms of automotive contracts.