Beware of Hidden Costs for Electric Leasing at €100/month

Between January 1 and February 13, 2024, certain French households were able to benefit from an offer of leasing (rental) attractive for an electric car. Thanks to a boost from the government of around €13,000, several models of electric cars became accessible, between €40 and €150 per month. This offer was theoretically reserved for the most modest households whose tax income did not exceed €15,400, to help them switch to electric for their business travel needs.

The system generated a lot of online requests, but it also attracted a lot of people to dealerships to benefit from it. A victim of their success, the planned 20,000 files increased to 50,000 files for 2024 alone, before the government blocked new requests until next year. However, it is very likely that many people rushed to the offer a little quickly, without waiting to necessarily know all the little details. As is the case with an addition in the decree published this February 13 which threatens customers with a hefty fine, for those who thought of misusing the system.

€1,500 fine for cheaters

An addition in the Decree No. 2024-102 of February 13 attracts attention. In the middle of ” it decreases “, ” he deletes ” And ” it increases » quite usual in a text relating to the modification of the conditions of aid for the purchase of electric cars, two expressions stand out: “ he forbids ” And ” he introduces a fine “.

The device of electric leasing at €100 per month had not yet revealed all its conditions apparently. The text specifies two elements which, even if they may seem obvious, were not necessarily known during the initial decree of 1^ᵉʳ January 2024 :

• “ it prohibits the subletting of vehicles benefiting from leasing assistance during the validity period of the rental contract »
• “ it introduces a fine of €1,500 in the event of non-compliance by beneficiaries of leasing aid with the conditions of conservation of the vehicle or the ban on subletting of the vehicle “.

It is now clarified that the lessee of a car under social leasing cannot sublet his vehicle to a third party. It is not specified whether a vehicle loaned free of charge to a family member could also pose a problem for the contract subscriber. A priori, it is above all the monetization of the subsidized car which poses a problem or the use of a nominee for the subscription of the leasing contract. It must be understood that the car can only be used for personal use, it must not be a source of income.

Failure to comply with this condition may result in a penalty being applied. It can reach up to €1,500. Another case is also covered by this risk of fine, that of non-compliance with the vehicle's shelf life, set at a minimum of three years. There are, however, authorized return conditions and cases of force majeure, but the tenant who changes his mind after one year for personal convenience must honor his contract until the end, where he is exposed to a penalty. financial.

This is one of the examples of hidden costs that can accompany a very (or too) financially attractive offer. We must not forget that this system is primarily aimed at low-income households and that “surprise” costs are not really welcome with tight ends.

Insurance, maintenance and refurbishment costs

Many customers who have signed up for social leasing probably do not have experience with other previous LOA or LLD contracts. If the dealership advisor has not done enough prevention regarding the obligations relating to this type of contract, unpleasant financial surprises can quickly accumulate:

• Possible increase in the insurance rate over the 3 years of the contract (comprehensive insurance recommended);
• Cost of vehicle maintenance (generally at least 2 visits to the workshop during the rental period);
• Surprise costs upon return, if the condition of the vehicle is not like new at the end of the lease.

These elements are particularly feared by dealers when it is necessary to explain to these customers that the €100/month does not cover all these expenses. They can quickly represent several hundred or thousand additional euros until the vehicle is returned. Social leasing can be a poisoned chalice for some poorly informed households.