Romania's Government approves ceiling for First Car program, half compared to 2016

Romania’s Government approved yesterday the guarantee ceiling for the First Car government program, which amounts to RON 50 million (EUR 11.1 million), half compared to the ceiling approved last year. At the end of January, the Finance Ministry launched in public debate the government decision draft to reduce the ceiling for this program in 2017. The First Car program was introduced in April 2015 by the Ponta Government with the aim to support the sale of new cars by allowing individuals to get cheaper loans partly guaranteed by the state to purchase their first car. The program remained unattractive in the second year after its launch. In 2016, the value of issued guarantees amounted to RON 1.4 million (EUR 311,400), representing only 1.4% of the total ceiling of RON 100 million, according to the Finance Ministry. In 2015, the program had a ceiling of RON 350 million (EUR 78 million), but the guarantees issued reached RON 3.26 million, or 0.93% of the total. In total, only 268 cars were bought via this program in two years. Through the First Car program, individuals can acquire a car whose price doesn’t exceed RON 50,000 (EUR 11,100), with a bank loan that’s half guaranteed by the state. To get the financing, it is necessary to make a down payment of at least 5% of the car’s price. editor@romania-insider.com