Auto bonus: Italian government announces new car discounts of up to €3,000

The Italian government has announced that it will give buyers thousands of euros towards the purchase price of a new car in a new scheme aimed at supporting the automobile sector.

Auto bonus: Italian government announces new car discounts of up to €3,000
Photo by Sarah Brown on Unsplash

Italy’s government on Wednesday announced a 650 million euro ($700 million) stimulus package for the next three years to encourage the purchase of new cars – including older models as well as low-emission electric or hybrid vehicles.

READ ALSO: ‘How we used a government bonus to buy an electric car in Italy’

The decree adopted at a cabinet meeting chaired by Prime Minister Mario Draghi took the money from the “automobile fund”, a budget for which 8.5 billion euros ($9.27 billion) is earmarked until 2030.

Under the new decree, purchases of low-emission electric or hybrid vehicles will be eligible for a bonus of between 2,000 and 3,000 euros.

A 2,000-euro cash bonus will also be available on a wide range of older-generation vehicles, “including those with traditional petrol and diesel engines, as long as they have emissions contained between 61 and 135 grams of CO2 per kilometer”, according to reports from financial newspaper Il Sole 24 Ore.

Further funding is made available to those who scrap older vehicles at the time of purchasing the new car,

The payment will be made directly to individuals “in the event of a purchase with financing, as long as the holder retains ownership of the vehicle for at least one year”, writes Il Sole 24 Ore.

The decree text containing full details of the scheme is yet to be published.

Italy has offered several new car ‘bonuses’ in recent years after it first introduced a discount to tempt drivers to trade in their old cars for lower-emission models back in 2019.

Announcing the new scheme, Economic Development Minister Giancarlo Giorgetti.said: “With this greenlight for bonuses, we are giving a concrete and much-awaited response to the automobile sector which is suffering profoundly at the moment.”

“This multi-year measure will allow companies to get their industrial plans onto the path of development,” he added.

“First the pandemic, the shortage of raw materials and now the war (in Ukraine) are putting a severe strain on this sector which represents one of the jewels of Italy.”

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What is Italy doing to fight rising cost of everyday goods?

The level of inflation in Italy reached 8 percent in June so what products are getting more expensive in the country and what measures are being taken by the Italian government to keep prices down?

What is Italy doing to fight rising cost of everyday goods?

Italy’s national statistics institute Istat has estimated inflation for June 2022 will hit 8 percent, up from the 6.8 percent in May, a record in the country that hasn’t seen such a spike in prices since January 1986.

“All of us in the government have the task of killing the inflation monster”, Minister for Public Administration Renato Brunetta said in an interview with the Quotidiano Nazionale on Sunday.

The minister said that the government is pushing for a price cap on gas and oil prices and calls for a “European agreement now” to regulate limits.

Any measures to create a ceiling for prices would need to follow European regulations, and EU countries must agree on them before members implement limits on fuel prices.

READ ALSO: EXPLAINED: What is Italy’s new digital invoicing rule for freelancers?

A major issue with rising prices is that wages lose their value, Brunetta explained. As a result, Italians can now buy fewer things with the same salary as one year ago.

Worker’s unions are looking to adjust collective agreements for wage readjustments, while companies fear that simply increasing salaries could prolong the crisis, Brunetta said.

What is the government doing to combat inflation?

The minister said then that the government is proposing a reduction in taxes incurred in workers’ wages to increase purchasing power without overburdening the employers.

He added authorities are also looking into “targeted and selective interventions”, including extending social benefits to low-income people.

Among the measures and proposals, he mentioned the targeted €200 bonus for Italian households to help with utility bills.

READ ALSO: Who can claim Italy’s €200 cost of living bonus?

The payments were announced in May alongside other government measures to offset the soaring cost of living, such as extending energy bill discounts and rolling on the deadline to claim Italy’s popular ‘super bonus 110’.

Pension amounts will also be reevaluated and adjusted for inflation more often and at higher rates, the minister said – the same with severance payments. He didn’t give further details, though.

Where can the increases be seen more dramatically?

Italy’s statistics institute says that “several types of products” have had price increases in the country, according to a press release. The main increase (48.7 percent year on year) can be seen in “energy goods”, such as fuel and gas.

READ ALSO: Italian property prices continue to rise in 2022

Food in Italy is also more expensive, both unprocessed food (9.6 percent increase) such as fruits and vegetables, and processed food (up by 8.2 percent). Recreational, cultural, and personal care services are also more expensive, up 5 percent compared to June 2021.

The institute says that the highest increases can be seen in housing, water, electricity and fuel supply. Or essential goods and living conditions for Italian households.

As fuel prices soar worldwide, Italians also see an increase in transport costs. The third sector with the most dramatic increases is food and beverage products, according to the institute report.