Last updated: 30 October 2014
AN INCENTIVE FOR THE AUTOMOBILE INDUSTRY : “FIRST CAR” PROGRAM
The Government has recently passed a Program aiming at stimulating the purchase of new vehicles by natural persons, granting them the possibility to buy a new car with the help of a governmental program guaranteed by the State. Government Ordinance no. 66/2014, published in the Official Journal no. 768 of October 22, 2014, created the general framework for the purchase of new vehicles, but the procedure shall be detailed only after the implementing regulations will have been passed, within a maximum period of one week.
In short, the program aims at granting an incentive for the development of the automobile industry by creating a competitive funding offer, without any material guarantee, which shall encourage the purchase of vehicles by natural persons who have never owned a new vehicle.
CONDITIONS
In order to be eligible for the program, the beneficiary must comply with several conditions.
First off, the vehicle that the beneficiary wishes to buy must be produced in the European community or imported, to comply with the Euro 5 emission standards and its price must not exceed 50,000 Lei. Each beneficiary can only purchase one vehicle and sellers must be legal persons whose main activity is selling vehicles.
Secondly, the beneficiary of this program must necessarily be a natural persons. In order to benefit from this program, it must comply with the following conditions:
- Make a sworn statement that it has never owned a new vehicle
- It does not have debts resulting from another bank loan
- It does not have any debts towards the general consolidated State budget.
Most probably, the implementing regulations shall provide other conditions, such as an advance payment of 5%-10% of the credit value, the maximum duration of the credit, as well as the age and nationality of the future beneficiary.
THE CREDIT
The credit granted to the beneficiary by a credit institution or by a non-banking financial institution shall be guaranteed by the State up to 50%. The beneficiary undertakes to accept the registration of a movable mortgage in favor of the State on the account open at the institution granting the credit, valid until the full payment of his debts.
Should the credit not be paid, the bank shall be compensated within the limits of the guarantee by the Ministry of Finance, which shall thus recover such amounts from the beneficiary, following the procedure of fiscal debts recovery.