Back to the complete issue
Sunday, 29 May 2022

How it works: The CPA’s refund scheme on car down payment

Want to get a refund on your car payments? Here’s what you can do: Customers who made a down payment or paid partial installments on a car before 12 April but have yet to receive their cars are entitled to receive a full refund plus 18% annual interest, according to a Consumer Protection Agency (CPA) decision published in the Official Gazette on Thursday.

How much can you expect to pay for the car you’ve been waiting on? It depends on whether or not you made a full payment. Customers who paid 100% up front set are entitled to receive their cars “without any additional cost burden,” the decision reads, meaning that dealers can’t ask them for more money.

You still have a good measure of price protection if you didn’t pay 100% up front: Customers who only made partial payments prior to 12 April (regardless of what percentage of the total amount they have paid) will be subject to as much as a 5% price increase, as per a previous CPA decision.

Consumers have the upper hand: The full text of the decision, which informally circulated earlier last week, gives consumers the option to decide whether to take the refund and interest, or try and reach a “better” agreement with the dealer. What exactly a better agreement entails would be in the consumer’s hand to negotiate.

“Each customer can decide how to move forward and try to find alternative arrangements with dealerships that they’re happy with,” head of the Egyptian Association of Automobile Manufacturers and the deputy general director of Bavarian Auto Group Khaled Saad told Enterprise. The CPA’s decision is designed to give customers their basic rights, but it’s only binding for the sellers, not the buyers, Saad said. “For example, a customer can settle with the dealership to pay an extra EGP 100k in exchange for reserving the car. It makes sense to try and negotiate on a case-by-case basis because the 18% interest on your money isn’t going to do much when some car prices have effectively increased 100%,” he said.

The timeline: Dealers will have a maximum period of five weeks to comply with the decision. This includes a two-week deadline to notify the CPA of why they are unable to deliver cars and another three-week period to refund customers. The decision does not, however, stipulate a timeline for dealers to actually deliver the cars.

Some automotive players are already letting their customers know that they won’t be able to deliver their cars: Toyota Egypt notified people who had made down payments on cars that it would not be able to deliver their cars and that they can begin heading to the company’s branches to claim their refunds, Masrawy reported last week.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.