Social leasing stands out as one of the government’s most ambitious measures with this promise of an electric car at €100/month. Promising on paper, will the system really make it possible to not exceed this sum? Unfortunately no.
One thing leading to another, we are starting to see things more clearly regarding the famous social leasing. Part of Emmanuel Macron’s key campaign promises, this measure should allow the most modest households to acquire an electric car for only €100 per month.
Since the outgoing president has been at the head of state again, the contours of the system have remained particularly vague. We had to wait until April 2023 to hear news on the subject from Elisabeth Borne, who confirmed a detailed presentation of the measure in November 2023. As for its entry into force, it is set for the beginning of 2024 .
Bruno LeMaire provides some details on social leasing
However, the Minister of Economy and Finance Bruno LeMaire has just provided additional details on the system on the occasion of Automotive Industry Day on October 24, 2023. Firstly, the tenant of Bercy recalled some information already known. Social leasing is expected to cost the State around 50 million eurostaken directly from the envelope of 1.5 billion euros planned to finance the greening of the French automobile fleet (the ecological bonus is part of this).
Although the eligibility criteria will be discussed in detail in a few weeks, we nevertheless know that 50% of the lowest-income households (i.e. those with a reference tax income per person of less than €20,850) will be able to benefit from it. In total, this represents approximately 100,000 people according to the state.
No contribution, but no insurance either
On the other hand, given that we did not yet know, Bruno LeMaire confirmed that beneficiaries will not have to pay any contribution. As our colleagues from Les Echos clarified yesterday, the State would like to offer a subsidy of up to €13,000. An essential sum to guarantee these low monthly payments and to provide landlords with a significant first rent. Let us point out, however, that the thing is not yet set in stone, negotiations with the manufacturers are still ongoing.
Where the problem lies is that the State has not planned to include auto insurance in this famous monthly payment of €100/month. De facto, the government’s promise seems fatally unkept as the president of the Sustainable Development Commission at the National Assembly Jean-Marc Zulesi noted: “You will then need to add insurance. In other words, the final cost for the motorist could be €120, €130 or even more. he declared in the columns of Le Parisien.
Costs inherent to the proposed contracts
Then there is another sticking point. According to the Minister of the Economy, two types of contracts will be offered within the framework of social leasing. In fact, beneficiaries will be able to opt for a long term rental (LLD) or for a rental with purchase option (LOA). In both cases, it will be necessary to anticipate some hidden fees.
For the LDD for example, it will be imperative to return the vehicle in almost new condition. Indeed, at the end of the contract, the lessor sends an expert to check the good condition of the car. Bodywork, equipment, glazing, battery and mechanics, everything will be scrutinized. And in the event of damage or abnormal wear, the driver will have to pay repair costs which are sometimes very expensive.
Also read: Electric car at €100 per month – half of French households are not convinced
In the case of LOA, the situation is similar. At the end of the lease, the car must be returned in very good condition. The bodywork, upholstery, tires and even the mileage will be checked and here again, repair costs will be required in the event of irregularities noted. Mileage is of particular importance. Indeed, an LOA always provides for a maximum number of km to be covered during the duration of the contract. In case of excess, you will have to pay compensation for each excess kilometer. Enough to transform this social leasing into a financial quagmire for the most modest households.
Finally, there remains another important one still unresolved. Because, we do not yet know whether or not vehicle maintenance will be included in the monthly payments., whether it will be supported by the government or the manufacturers. If this is not the case, these are costs that households will still have to take into account (tyres, battery diagnosis, etc.).
Source: Le Parisien