Seven French contracts to renegotiate this September and how to do it

Save money by getting better deals on gas, internet, bank loans and insurance 

13 September 2021

Changing or renegotiating contracts can help you save money Pic: PaeGAG / Shutterstock

By Joanna York

September is one of the best times of year to renegotiate or change insurance, energy and telecoms contracts in France, or to switch banks for lower fees.

We explain how to do so, and what the financial benefits may be.

1.     Change gas and electricity contracts

This September, 2.8 million Engie customers saw gas prices rise by 8.7%, marking the fourth consecutive month that prices have increased.

One solution to combat price hikes is to avoid regulated price contracts (tarifs réglementés de vente, TRV) and instead opt for a fixed price contract.

This allows clients to pay a fixed price for 1-3 years, thus avoiding monthly fluctuations.

Switching to a competitor aside from EDF and Engie, which can offer tax free energy with up to 20% savings, can also reduce bills. But, you are warned to read contracts carefully, as some specify how long discounts will last for and others do not.

Cancelling an existing contract can be done online, giving a 14-number identification code visible on your energy bills (either the point de comptage et d'estimation, PCE, or the point de livraison, PDL).

Read more: Tips to lower your gas or electricity bill in France

2.     Look out for telecoms deals

September is one of the best times to look for new deals for TV, internet and phone packages.

The average price for a fibre internet contract has gone down to a historic low of €25.67 in France, with RED (SFR) offering a deal for only €20 per month for the first year.

For mobile phones, one of the best current deals comes from Free, which is offering 90-gigabyte contracts for €8.99 per month for the first year.

As many telecom contracts do not specify a duration for subscription, changing contracts can be as simple as contacting customer services via telephone or online, or sending a recorded delivery cancellation letter.

Service providers normally end contracts 10 days after receiving cancellation requests but, in many cases, clients can select a date of their choosing.

3.     Compare banks to avoid the heaviest fees

Bank fees rose by 0.6% between January 2020-2021, the largest rise since 2017, an annual study of 146 French banks by Panorabanques found.

This means bank fees now cost the average account holder €216.7 per year.

But cheaper options exist and online comparison services can help you identify accounts that offer competitive rates. 

For example, when Capital ranked the cheapest banks in France for different types of accounts, it found prices as low as €24 per year for employees.

Thanks to the Loi de mobilité, it is now free and easy to change bank accounts in France. 

All banks can manage the transfer for customers to make sure that bills, social security, salary payments and regular direct debits are transferred to the new account.

From the moment a customer requests the change, the old bank and the new bank have 22 days to complete transfer operations.

Read more: How to switch your bank account in France

4.     Renegotiate property loans for lower interest rates 

After reaching a low of 1.06% on average in July 2021, interest on property loans fell again to 1.05% in August, L’Observatoire Crédit logement-CSA reported. 

For people who originally borrowed money four or five years ago, when rates were closer to 2%, now could be a good time to renegotiate contracts.

To do so, the rate offered by your current bank and that of the bank you wish to move to must be between 0.7-1%. The exact difference allowed will depend on the amount and duration of the loan you are transferring.

Savings could be significant. Capital estimates that a household that borrowed €300,000 over 25 years in 2016 could reduce the cost of its credit by €32,000 over 2 years by renegotiating a 1% loan.

5.     Change borrowers’ insurance contracts

Borrowers could save up to €15,000 by changing contracts for insurance on property loans, often by opting for an independent provider rather than the bank that provided the original loan.

Three different laws maintain borrowers’ rights to seek insurance from an independent provider. This can be done at the moment of signing the contract, or on the date of the original signature each year.

To end their current contract, borrowers must send a recorded delivery letter to their current insurer. However, make sure that the guarantees in the new contract are at least equivalent to those in the former contract, otherwise, the existing insurer can refuse the change.

6.     Compare deals for home and car insurance

Home and car insurance prices are going up thanks to an increase in prices for detachable parts for vehicles, and the number of natural disasters in France, which has multiplied by three in the past 30 years.

Notably, home insurance prices rose by 2% in 2021.

However, savings can be made by using separate insurers for home and vehicle insurance, which is permitted 12 months after signing an original contract under the 2015 Loi Hamon.

Using a separate vehicle insurer and changing contracts for a competitive rate could save up to €300 per year, according to an Ipsos study.

For home insurance, Capital estimates that households could save up to 30% by changing contracts.

To end your existing contract, send a recorded delivery letter to your existing insurer with the date you wish the contract to end.

7.     Change health insurance providers anytime

As of December 2020, health insurance contracts can be ended at any time of the year after the first 12 months of a contract, with no financial penalties.

Ending a contract is relatively simple, and can be done by sending a message via an online account or an email.

Health insurance prices have risen significantly in recent years, going up 5.3% in 2021, meaning average additional charges of €79.

However, Capital estimates that changing contracts could help make significant savings. For example, a non-salaried worker could save up to €26 per month, or €312 per year.

Related articles:

11 changes for residents in France from September 2021

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