Guarantees for “First car” programme up to EUR 79 million in 2015

The government will allocate this year a limit of guarantees for the “First car” programme of RON 350 million (EUR 79 million), according to a draft bill that also foresees the possibility of other creditors interested in the program to register by March 2, according to Mediafax.

“For the limit level there were considered the requests from credit institutions and non-banking financial institutions as eligible for participating in the program and it is envisaged in talks with the IMF and with the EC in establishing the performance criteria regarding the guarantees, part of the agreements closed with the international financial institutions,” reads the note accompanying the draft bill, according to Mediafax.

The initial limit allotted for 2014 was RON 50 million (about EUR 11 million), considering that the legislation was adopted at year-end.

People purchasing a car through the “First car” programme will benefit from a credit period of up to 5 years at a car cost of more than RON 50.000 plus VAT (EUR 11.293), and with a subsidized interest rate of 50 percent.

This program can be accessed by all individuals aged 18 and older who have incomes and who can prove, through affidavit, that they did not own a new car previously. They also need to prove through a copy of the invoice issued by the vendor that the vehicle purchased through the programme is new, meets the minimum requirements of the Euro 5 standard, is purchased from a legal person whose main activity field is the sale of motor vehicles and its purchase price does not exceed RON 50,000 plus VAT (EUR 11.293), depending on each case.

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The program is meant to encourage the sale of new cars, however, it does not enjoy the IMF’s support. As part of the consultations that the Romanian Government is having with the IMF, the latter requested that the government give up the “First car” programme, informs local media reports. An IMF-EC delegation is currently undergoing consultations in Bucharest and the third review of the stand-by agreement with Romania, expected to be completed this year in September.

Andreea Marinas