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Buying an electric vehicle: why we need to rethink credit solutions

2023-05-16T06:08:06.242Z

Highlights: Leasing companies, largely owned by banks, are accused of securing a generous margin on car rental. In France, the monthly rent charged by leasing companies for a long-term lease is on average "56% higher for an electric vehicle than for its thermal equivalent" The average monthly rent for a Peugeot e-208 is 547 euros, compared to 355 euros for the petrol model. Since January 1, individuals who wish to acquire a clean vehicle — electric or hybrid — benefit from a zero-interest mobility loan (PTZ-m)


Leasing companies, largely owned by banks, are accused of securing a generous margin on car rental


Economical, the electric vehicle? Electricity, admittedly, costs less than fossil fuel, especially in France. But the rents you pay – if you have chosen a long-term lease (LLD) contract, sometimes with option to purchase (LOA), the means now largely majority of access to the new vehicle – are likely to sink your budget.

A study by Transport & Environment (T&E), a collective of fifty European NGOs committed to carbon-free mobility, reveals that leasing companies, many of which are owned by French banks, overcharge for the electric vehicles they rent, to the detriment of motorists' wallets.

"Cars are becoming more and more expensive and, in turn, we are deploying an increasingly rich range of financing solutions," says the executive of a French establishment whose subsidiary dedicated to leasing... "is doing well, it's true." In France, the monthly rent charged by leasing companies for a long-term lease is on average "56% higher for an electric vehicle than for its thermal equivalent", notes the T&E study. For example, the average monthly rent for a Peugeot e-208 is 547 euros, compared to 355 euros for the petrol model.

Buying cash is not necessarily a good plan either

In short, "a very favorable business model, which does not include the increase in the resale value of electric in recent years," laments a representative of the NGO collective. On arrival, Renault, via RCI Bank, BNP Paribas, via Arval, or Société Générale, via ALD Automotive and LeasePlan, among others, made record profits in 2022.

So, is it better to buy your electric vehicle in cash, via a loan? Yes, but... Again, banks are not blameless. Since January 1, individuals who wish to acquire a clean vehicle — electric or hybrid — benefit from a zero-interest mobility loan (PTZ-m) if they live in a "low emission mobility zone" (ZFE-m). The amount is capped at €30,000, but the scheme can be combined with aid for the acquisition of low-emission vehicles (ecological bonus and conversion bonus).

The problem? In banks, the offer is not yet available. "The necessary agreement between the State and credit institutions is still under discussion," argues a banker. If all goes well, the situation should return to normal at the beginning of the next school year.

Source: leparis

All business articles on 2023-05-16

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