Remarketing a leased truck after termination

Once the vehicle has been repossessed, the part that determines the size of the loss begins: remarketing. For lessors this is not a free choice. Germany's Federal Court of Justice (Bundesgerichtshof, BGH) requires the best possible realisation, and the proceeds feed into the final account with the lessee. This guide explains what the case law requires, how the process works and which sales channels are available. It is based on German law.

The duty to realise the vehicle at the best possible price

The key statement is in a BGH order of 22.07.2014 (case no. VIII ZR 15/14). A sale to a dealer at the dealer's purchase price is "not sufficient without exception". The lessor must also pursue other ways of achieving higher proceeds.

The BGH names two cases in which there is no breach of duty:

• 10 per cent threshold: The dealer's purchase price is no more than 10 per cent below the dealer's selling price.
• Notice with a deadline: The lessor first tells the lessee the values determined by an expert. The lessee is then given the opportunity, within a reasonable period, to take over the vehicle at the estimated price or to name a suitable third-party buyer. That period should in principle not be shorter than two weeks.

The order builds on a longer line of the court's decisions, including those of 10.10.1990 (case no. VIII ZR 296/89), 04.06.1997 (case no. VIII ZR 312/96) and 07.09.2011 (case no. VIII ZR 246/10). The Higher Regional Court (Oberlandesgericht, OLG) of Brandenburg likewise requires that the lessee is at least told the result of the market value assessment before the vehicle is sold (judgment of 11.01.2023, case no. 4 U 42/22).

Why this affects the lessor directly: the final account

After termination without notice, the lessor has a claim for damages. The BGH bases it on sections 280, 281 and 252 of the German Civil Code (Bürgerliches Gesetzbuch, BGB) (order of 14.01.2020, case no. VIII ZR 169/18). How it is calculated is usually set out in the contract. The formula in the OLG Brandenburg case looked like this:

1. outstanding lease instalments, discounted
2. plus the calculated residual value, discounted
3. minus the lessor's saved expenses
4. minus the net sale proceeds after deducting remarketing costs

The proceeds are credited in full. The BGH held a clause invalid that took only 90 per cent of the proceeds into account (judgment of 26.06.2002, case no. VIII ZR 147/01).

For the lessor this has two consequences. Every euro of lower proceeds increases the remaining claim against a lessee who is often already insolvent. And if the sale breaches the duty of best possible realisation, the lessee can challenge the final account.

The process in four steps

1. Document the condition: handover report, photos, mileage, damage, bodywork, service records. This is the basis for every valuation and every bid.
2. Determine the value: To notify the lessee, you need values determined by an expert. The value terms involved and what an appraisal costs are covered in our guide to truck residual value for lessors.
3. Notify the lessee: Send the values in writing and set a deadline of at least two weeks to take over the vehicle or name a buyer.
4. Sell and document: Record which offers were received, who bought the vehicle and at what price. You will need this for the final account.

Sales channels compared

Direct sale to a single buyer

Quick and simple, often still at the vehicle's location. But the price comes from a single offer. Whether it meets the standard of best possible realisation depends on the gap to the dealer's selling price and on whether you notified the lessee beforehand.

Buy-back by a dealer or manufacturer

If there is a buy-back agreement, the price is fixed in advance. That makes things predictable. Without such an agreement, a buy-back is simply a direct sale as above.

Open auction

Several bidders see each other's bids and bid against one another. That creates competition. Keep the costs in mind: in the OLG Brandenburg case, the lessee did not have to reimburse an auction house's consignment fees and seller's commission.

Blind auction with sealed bids

Each bidder submits a bid without knowing the others, within a fixed period. At the end there are several independent bids that reflect the market value at the time of sale. That makes the remarketing traceable. Whether it meets the standard of best possible realisation in an individual case always depends on the overall picture, including the notice to the lessee.

Whoever recovers the vehicle need not sell it

Repossession and remarketing are two tasks that can be separated. Some service providers offer to buy the vehicle outright after recovering it. That can make sense when speed matters. In that case, check the 10 per cent threshold and tell the lessee the estimated value beforehand.

The alternative is competition for the vehicle. truckoo repossesses and remarkets: every vehicle goes into a blind auction with sealed bids over a fixed period, with 1,500+ vetted dealers and exporters from 35+ countries. That also applies to vehicles with special bodywork. You see every bid and decide whether to accept or decline. truckoo handles the contract, payment, deregistration and handover. Find out more on our repossession and remarketing page.

Frequently asked questions about remarketing leased vehicles

Is a sale to a dealer at the dealer's purchase price enough?

Not without exception. According to the BGH (case no. VIII ZR 15/14), it is unobjectionable if the purchase price is no more than 10 per cent below the dealer's selling price. Or if the lessee was told the estimated value beforehand and had the opportunity to take over the vehicle or name a buyer.

How long must the lessee be given to name a buyer?

A reasonable period which, according to the BGH, should in principle not be shorter than two weeks.

Are the sale proceeds credited in full?

Yes. The BGH held a clause invalid that took only 90 per cent of the proceeds into account (case no. VIII ZR 147/01).

Who bears an auction house's fees?

In the OLG Brandenburg case (case no. 4 U 42/22), not the lessee. Consignment fees, seller's commission and data capture charges remained with the lessor.

This guide provides an overview and is not a substitute for legal advice on an individual case.

More guides

Repossession and remarketing · Repossession: process and costs · Residual value for lessors · Lessee insolvency · Storing repossessed trucks