Tips & GuidesCan You Save On Your Car Loan By Going Green?

Can You Save On Your Car Loan By Going Green?

February 28, 2022

Green car sales are on the rise here in Australia, with new data revealing sales of plug-in electric vehicles almost tripled in the past year, rising from 6,900 in 2020 to 20,665 in 2021.

According to the Electric Vehicle Council (EVC), EVs now account for 1.95% market share of new vehicles, up from 0.78% in 2020.

So, which EVs are Aussie buyers snapping up? According to EVC sales figures, the top 10 battery and plug-in hybrid EV sales in 2021 were recorded as follows:

  • Tesla Model 3 with 12,094 sales
  • MG ZS with 1,388 sales
  • Mitsubishi Outlander with 592 sales
  • MG HS with 580 sales
  • Porsche Taycan with 531 sales
  • Hyundai Kona with 505 sales
  • Volvo XC40 with 495 sales
  • Hyundai Ioniq with 407 sales
  • Nissan Leaf with 367 sales
  • Mercedes-Benz EQA with 367 sales

Why go green?

Wondering whether a ‘green’ car is right for you? There are several advantages to choosing a green car. First up, emissions. Green cars are designed to be kinder to environment as they have lower CO2 emissions.

Using your vehicle day to day, you may also be pleased to discover that your green car can help save you on running costs.

In saying that, buying a green car may mean putting down a larger sum than you would to buy a standard car. However, depending on the state or territory you live in, you may enjoy various incentives to lessen than burden.

For example, if you live in the ACT, you can benefit from two years of free registration and an exemption from stamp duty for ‘zero-emission’ vehicles if you buy a full battery-electric or fuel-cell vehicle. You can also make use of transit lanes to cut down on your commute.

Need a car loan? Here’s where you could save even more. A number of car loan providers are now offering green car loans to car buyers looking to invest in an eco-friendly car.

What is a green car loan?

A green car loan works in much the same way as any other type of car loan in that it provides borrowers with a sum of money to buy the vehicle of their choice, which they then pay back over a set period, alongside fees and interest.

With a green car loan, however, borrowers looking to buy a green or eco-friendly car can benefit from lower costs, typically in the form of lower interest rates and/or lower fees.

Which cars are eligible for green car loans?

Whether your choice of car is eligible for a green car loan will depend on the lender. Generally, cars must have lower than average emissions to be eligible, but for some lenders, much stricter eligibility criteria can apply.

If you want to read up on the best green vehicles, the government’s green vehicle guide is a great reference tool, which not only provides up to date information on the best in market options, but also the most popular green vehicles by sales.

Comparing Green Car Loans

Time to compare? At Car Loan World, we specialise in helping you find the right car loan to match your needs. Of course, it’s still important you know what to look for as you compare options.

Consider how much you can afford to borrow, taking into account the interest and fees you will pay. Larger loans and loans borrowed over a longer time may cost more overall.

Think about whether a secured or unsecured option is right for you. Typically, car loans are secured against the vehicle being purchased. Opting for a secured car loan can offer lower interest costs, while also making it easier to get approved.

Fixed rate or variable is another aspect to consider. Again, car loans typically offer a fixed rate, but be aware if you opt for a variable rate loan, that rate may increase over time, which could affect the affordability of your repayments.

It’s worth remembering green car loans aren’t necessarily cheaper than standard car loans. You may find a green car loan from one provider is actually more expensive than a standard car loan from another provider.

Lastly – and perhaps most importantly – check the eligibility requirements before you apply. Be sure to read the lender’s terms fully to make sure your car of choice is eligible for the green car loan you want to apply for.

Author

  • Roland is the founder of Credit World Pty Ltd and a leading financial expert in Australia. He has extensive knowledge on car loans in Australia. Known as a car loan expert, Roland has been featured on TV and in various publications. He started in finance comparison in 2005. Now a 17 year industry veteran.