Insurance Companies Role in Replacement & Renewal Initiative

A while back President Abdel Fattah Al-Sisi launched the Automotive Replacement & Renewal Initiative. After which the Ministry of Finance stated that the first phase of the initiative will take 3 years to complete during which they will replace and renew 350,000 vehicles (taxis, privately owned, and microbuses) while the initiative as a whole will take 10 years to complete.

Which cars fall under the initiative?

• Cars that are 20 years old (or older).
• Owned by an Egyptian citizen.
• In case the car’s price will be paid in installments the owner must be between 21 and 65 years old.
• In case the owner wishes to pay for the replacement car in cash then there is no age limit.
• Installments are available over 7-10 years or less according to the wishes of the owner as well as their bank of choice.
• The loan interest fee is a fixed 3% calculated on the total loan (it is not a compounded interest).

One of the advantages of the presidential initiative is that it offers the car’s price as a loan to the citizen with only a 3% interest rate. The interest payment may even be divided over the installments for ease of payment and is determined according to the car’s brand and model as well as each applicant’s individual financial ability.
 

Car Price Incentive:

The initiative also offers a “Green Incentive” to the applicant which is a 10% deduction on the price of the replacement car (to be paid directly by the government to the car seller) with a maximum ceiling of 22,000 EGP in case of private cars, a 20% deduction with a ceiling of 45,000 EGP for taxis, and a 25% deduction with a maximum ceiling of 65,000 EGP for microbuses. The initiative also offers discounts on car prices, unlike the regular market. 

What is the role of insurance companies in this initiative?

Insurance companies will provide the following benefits:

• Car insurance against fire, theft, and accidents.
• Insurance in the case the car owner passes away whereby the insurance company shall pay off the remaining car loan installments on behalf of any heirs.
• Free additional coverage for the initiative participants in the form of an extra personal accident insurance policy for 100,000 EGP to be paid out if an accident results in death or total disability.
• The initiative also offers a car insurance policy and a life insurance policy for those who are paying in installments whether privately owned or otherwise. 
   

To register in the initiative to replace obsolete cars that run on natural gas click here.

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