Defective used vehicle, big consequences: WesBank ordered to refund buyer in landmark ruling
A badly repaired 2012 Ford Ranger was at the centre of a landmark ruling by the SCA this week.
Image: Supplied
Alta Van Niekerk has pulled off a landmark victory against WesBank, with the Supreme Court of Appeal (SCA) ordering the bank to repay R170,023 for a defective used Ford Ranger that it financed.
The SCA overturned an earlier Mahikeng High Court ruling, confirming that banks cannot wash their hands of faulty vehicles, even when they provide the financing.
The case highlights a persistent problem. The National Consumer Commission (NCC) receives hundreds of complaints every month from consumers who bought vehicles with hidden defects, particularly second-hand cars.
Many say key information about a vehicle’s condition was withheld at the time of sale. Over nine months, the NCC received roughly 600 complaints against second-hand dealers, including 46 against one major supplier.
Van Niekerk’s attorney, Trudie Broekmann, said, “Where a consumer would previously have returned his vehicle to the dealership if it turned out to be a lemon, if it’s financed, the financier now has to carry the can.”
Broekmann added that the ruling places appropriate responsibility on the banks, who have, up to now, been in the business of washing their hands of defects, even those which endanger road-users’ lives.
Consumers can now claim directly against banks for defective products, avoiding delays or disputes with dealerships. Banks will also be liable for any harm caused by defects, such as accidents or pileups, Broekmann said.
According to the 2024/25 NCC annual report, just under 60% of complaints in priority sectors, including second-hand vehicles, were finalised during the reporting period.
For complaints that went to the National Consumer Tribunal or the courts, the commission’s success rate was around 90%, with 19 of 21 rulings in a recent quarter issued in its favour.
The saga started in 2017 when Van Niekerk traded in a car and financed the balance for a 2012 Ford Ranger 3.2 TDCi diesel 4x4 model for her son.
The Ranger, it turned out, had a faulty gearbox, so she returned the vehicle. A mechanic that she consulted alleged that the used dealership had installed the wrong gearbox while repairing the vehicle. Van Niekerk formerly cancelled the agreement and claimed a refund from both the dealership and WesBank.
The bank, however, continued to debit her account, ignoring repeated letters to stop and then, in 2019, sued her for the balance. Van Niekerk, in turn, sought confirmation of the cancellation and repayment of R170,023 under the Consumer Protection Act (CPA).
Broekmann says “the CPA requires that any goods sold must be safe, of good quality, in good working order and free from any defects”.
The Mahikeng High Court ruled in WesBank’s favour, saying Van Niekerk had waived her right to cancel by first returning the vehicle for repairs and determining that the CPA didn’t apply to the credit agreement because the bank was not the supplier.
On appeal to the SCA, the Van Niekerks argued that receiving a defective vehicle entitled them to cancel the agreement, stop paying instalments, and claim a refund.
The SCA’s ruling states that, under the CPA, “the bank most certainly wore two hats when it entered into the agreement, namely, as that of supplier and that of credit provider”.
The judges said it was “inescapable” that the bank was the supplier because it retained ownership of the vehicle until the final instalment was paid.
Broekmann explains that banks retaining ownership entitles them to the vehicle if consumers default.
The judgment confirmed that the vehicle’s hidden defects entitled Van Niekerk to cancel the contract. The court also rejected WesBank’s argument that agreeing to a repair prevents cancellation if defects persist.
Broekmann says this argument has often been misused by the Motor Industry Ombud to block consumer claims, but now it must stop.
The judgment affects the vehicle sector and also applies to all financed goods where the bank retains ownership, even corporate purchases to which the CPA doesn’t apply, says Broekmann.
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