Published on : 31 October 20193 min reading time

Car loans benefit from the same legal framework as any other type of consumer credit. In this case, some specific legislative articles have been designed with a view to providing greater security for the borrower when deciding to purchase a new or used vehicle. On that note, you would like to acquire the car of your dream through a loan. In this article, discover the regulations of car credit in France.

The Scrivener system, to better protect borrowers

First applied in 1978, the Scrivener law was designed to strengthen the protection of borrowers or consumers when they plan to apply for consumer credit from a banking institution. Reshaped and strengthened by the Lagarde system in 2010, this law is the subject of a specific amendment concerning credit regulations in France. This includes the cooling-off period, which allows borrowers to study the clause in the credit agreement in depth before subscribing to it. This period is now set at a minimum of 15 days. In addition, the Scrivener law also allows them to benefit from a withdrawal period of up to 14 days from the signing of the contract. In addition, this regulation also made it possible to set the limit for self-limiting credit at 75,000 euros. The latter must be repaid in a minimum of 3 monthly instalments.

The Neiertz scheme on over-indebtedness

The Neiertz Act, which came into force in January 1991, governs all types of consumer credit, including car loans. It is making greater efforts to strengthen the responsibilities of lenders in the face of the risk of over-indebtedness. Thus, through this system, the financial institution is required to keep a copy of the contracted credit offer in accordance with the reference rates. In addition, the Neiertz law introduced new regulations for car loans, namely the establishment of an over-indebtedness commission. The latter, whose function is to act as an intermediary between lenders and borrowers. However, this commission can only be paid when the borrowers are no longer able to pay the monthly instalments.

The National Personal Credit Incident File

Created as part of the implementation of the Neiertz regulations, the FICP or Fichier National des Incidents du Crédit aux Particuliers is a device of the highest importance for lenders or financial institutions. Indeed, it allows them to verify the reliability and good faith of borrowers. That said, customers or households in difficulty facing an over-indebtedness procedure will thus be included on the FICP list. The latter can be consulted by banks and lending institutions at any time.