French government increases help-to-buy car scheme
Grants for drivers wanting to buy new cars to replace old ones have been increased by the government in an €8billion package to help the French car industry survive the effects of Covid-19.
The growing grant scheme
The new more generous scheme, called the prime à la conversion pour remplacer un véhicule by the government – prime à la casse by nearly everyone else – will run until December 1. Buyers of certain very low-emission cars can get a state payout of up to €7,000, while buyers of petrol or diesel cars can now also receive up to €3,000, if they and the vehicles meet criteria.
A grant of €2,000 can be obtained towards a plug-in hybrid vehicle (PHEV) with a range of more than 50km, a CO2 level of between 21 and 50 g/km, and a price of €50,000 or less. For a new electric car, the existing €5,000 conversion premium can be combined with the €7,000 bonus, giving a total of €12,000 for some. This bonus applies to both private individuals and companies.
Support for the car industry also comes with the objective of making France a European leader in the production of electric cars.
Encouraging electric vehicles in France
As well as supporting individuals and businesses wanting to buy “clean” vehicles, President Macron stated an intention to “make France the number one producer of such vehicles in Europe, by supporting the production of more than a million electric, rechargeable hybrid and hybrid vehicles per year by 2025”. The government also plans to install 100,000 electric charging terminals in France by the end of 2022.
Ecologists have criticised the scheme, even though one of its justifications is to encourage a move away from polluting vehicles to cleaner ones. Greenpeace France’s Sarah Fayolle said the government’s €8billion package “could have led to a profound transformation of the automobile industry. But the plan announced perpetuates a deadly dependence on vehicles, which – whether electric, hybrid or internal combustion engines – are incompatible with an ecological transition.”
She said it was “scandalous” that cars with petrol and diesel engines were included in the scheme and that it could be used to buy many of the large and heavy SUV vehicles which now make up 40% of new car sales in France. Greenpeace said the prime à la conversion should be transformed into a prime à la mobilité durable, offering help instead with car-sharing schemes, bicycles, or season tickets on trains and buses.
Who can benefit from the bonus?
To benefit, vehicle owners must live in France and have declared income (as a share of a revenu fiscal de reference) of €18,000 – up from €13,489 previously – or less on their tax avis for 2019.
- The new car must be bought between June and December 2020. After that, the scheme reverts to the one that was in place before June. If it is a petrol car to be destroyed, it must have been first registered before 2006 and have been owned by its present owner for at least a year.
- The car must be registered in France and have definitive registration documents.
- It must not be tied to any finance scheme nor considered by the car trade as a véhicule endommagé – that is, a damaged car which can be sold only to a professional and not to the public. No ongoing insurance claims for the car are allowed either.
- The old car will have to be taken for destruction at a registered scrapyard, called a centre de véhicules hors d’usage in the official documentation, in the period of three months before the date on the new car’s invoice. For diesel-engined cars, the conditions are the same except that vehicles registered before January 2011 are included.
- The only exception to the destruction order is if you are able to show you have replaced the old engine with an electric one. As the French government has only just authorised retro-fitted electric engines, with many rules and regulations, it is unlikely anyone will be able to do so during the six-month timeframe.
- The car eligible for the bonus must either be an electric car with official CO2 figures of under 20 grammes per kilometre, or be a hybrid or internal combustion-engined car with official CO2 figures of 137 grammes per kilometre and which meets the Crit’air 1 or 2 standards – a limit which includes many SUVs. Crit’air 2 vehicles must have been registered after September 2019.
- It will have to be bought outright or rented under a contract which runs for at least two years, be priced under €60,000 for an electric vehicle or €50,000 for a hybrid or internal combustion engine, and be fully registered in France. It cannot be sold in the six months after purchase, or until it has at least 6,000km on the clock.
- For Crit’air 1 and Crit’Air 2 vehicles which meet these standards, the amount of state aid to the buyer is €3,000. This can rise to €4,000 if you live in a zone à faibles emissions mobilité (ZEF – see tinyurl.com/y8jtnvxz) and your local government has a scheme to encourage clean cars. In these areas, the amount of state aid for electric cars can rise to €7,000.