In a landmark judgment that reshapes consumer protection in South Africa, the Supreme Court of Appeal (SCA) has ruled that banks can be held legally liable for defective second-hand vehicles they finance. The decision marks a major shift in vehicle finance law and offers stronger protection to consumers who unknowingly buy “lemons”.
The case dates back to 2017, when Mahikeng pensioner Aletta van Niekerk purchased a second-hand 2012 Ford Ranger for her son. She paid a substantial deposit and financed the balance through WesBank. Within just four days, the vehicle showed serious gearbox problems. Although repairs were attempted, the car overheated again two months later. A later inspection revealed that the dealership had fitted an incorrect, undersized gearbox during repairs.
Frustrated and financially burdened, the Van Niekerks attempted to return the vehicle and cancel the finance agreement, demanding a refund from both the dealership and WesBank. Despite this, debit orders continued, and in 2019 WesBank sued for the outstanding balance. In 2022, the High Court initially ruled in favour of the bank, stating that Van Niekerk had waived her right to cancel the agreement by allowing repairs.
However, the matter reached the Supreme Court of Appeal, which overturned the earlier ruling in December 2025. The SCA held that WesBank was not merely a credit provider but also acted as a supplier by financing the vehicle. As a result, the bank was ordered to repay over R170,000 and cover legal costs.
Consumer law expert Trudie Broekmann described the judgment as groundbreaking. The court confirmed that when banks finance vehicles and retain ownership as security, they also carry responsibility for defects. This means consumers can now hold banks accountable for faulty financed vehicles, not just dealerships.
The implications are far-reaching. Banks may now be forced to scrutinise dealerships more closely, demand comprehensive mechanical reports, and refuse to finance substandard vehicles. This increased oversight could significantly improve the quality and safety of vehicles on South African roads.
For consumers, the ruling offers a powerful new avenue for recourse. If a financed vehicle turns out to be defective, complaints should be directed to the bank, not only the dealer. While the law is still evolving, the judgment sets a strong precedent—one that strengthens consumer rights and encourages accountability across the vehicle finance industry.