Think of buying a hybrid, low emissions or electric vehicle? You’re not the only one.
According to research conducted by Westpac, seven out of 10 Australians plan to buy an electrified vehicle in the future, with 34% of current petrol or diesel owners saying them aim to do so for their next automotive purchase.
So, aside from lowering your emissions, what kind of benefits can you expect from making the switch?
Every state and territory in Australia currently provides incentives for electric vehicle ownership, either in the form of lower taxes or rebates.
On top of that, from 1 July 2023, the federal government will increase the Luxury Car Tax (LCT) thresholds for ‘fuel efficient’ vehicles from $84,916 to $89,332, expanding the choice for buyers of electric vehicles.
But that’s not all. If you plan to finance your purchase, you could benefit from a lower rate on your car loan by going green.
We’ve put together this list of lenders currently offering green cars loans. Most offer a lower rate to borrowers financing a green car, with some also offering some nice extras on the side.
Back in June 2022, Westpac became the first Big Four bank in Australia to offer lower interest rates on loans for electrified vehicles.
Now, one year later, the bank is providing new borrowers with a special offer: 1,250 kWh of free charging, for up to 12 months, with Australia’s largest public charging network, Chargefox. Allowing for travel up to 7,000 km, this equates to roughly $750 in savings on charging costs.
The loan itself is designed for personal use, allowing borrowers to access $10,000 to $100,000, over a period of one to seven years. Rates are fixed. The vehicle must be listed within Westpac’s selection of electric or hybrid range of vehicles, and it must be seven years old or less.
Joining the party in April 2023, CommBank became Australia’s second Big Four bank to offer discounted rates on car finance for green vehicles.
Borrowers who opt to finance their vehicle through CommBank can benefit from up to 1% off the bank’s standard rate, when buying a new or used hydrogen vehicle valued up to $250,000.
Additionally, assets such as EV charging equipment, battery storage systems, LED lighting upgrade projects and solar, wind and hydro-powered hardware are eligible for a 0.5% discount.
With no specific Green Car Loan on offer, CommBank instead allows green car buyers to choose from the bank’s current line-up of car finance options, to benefit from that discounted rate.
CommBank states eligible vehicles must either be fully electric, or hybrids emitting less than 120g C02 emissions per kilometre. If the vehicle is to be secured against the loan, it must be up to five years old, not currently under finance and have an active comprehensive insurance policy.
Secured loans are offered up to $100,000, while unsecured loans max out at $50,000.
As part of its aim to reach net-zero by 2035, Bank Australia ended all offers provided to borrowers financing petrol and diesel cars back in August 2022. The bank also announced it will no longer fund loans for new fossil-fuel vehicles from 2025.
Further encouraging Aussie car buyers to make the switch to a greener option, Bank Australia offers an LEV Car Loan featuring a discounted car loan rate for hybrid or electric vehicles.
Designed to offer lower interest rate and no fees to buyers choosing a LEV (low emission vehicle), the loan features a fixed rate on finance amounts of $1,000 and up, over a period of up to seven years.
The loan can be used to buy a new or used car up to seven years old, or to refinance an existing car loan.
The bank classes LEVs as cars and motorbikes that are pure electric, plug-in hybrid electric, regenerative hybrid, and those with an internal combustion engine that produces less than 125 g/km Tailpipe C02 according to the Green Vehicle Guide.
Aside from waiving the loan’s $150 establishment fee and applying the LEV interest rate, Bank Australia also promises to offset the purchased car’s carbon emissions for the life of the loan.
Pepper Money’s electric vehicle loan was rated best in the 2022 Canstar Green Excellence Awards.
Its Electric Car Loan allows buyers to finance any brand of electric vehicle, whether new, used or a dealer demo. Offering a fixed rate over a period of one to seven years, loans offer finance up to $300,000.
Pepper Money has also partnered with Evie Networks to provide all new customers with up to 12-months (or 2,000 kWh, whichever comes first) charging using Evie’s national network of charging stations.
Prior to Westpac, Macquarie was the biggest bank offering electric vehicle loans. It offers finance on loans up to $500,000, provided on new, demonstration and used vehicles. Buyers can choose from a fixed or variable rate, with the option to take advantage of the bank’s specialised electric vehicle buying service.
Macquarie classifies vehicles eligible for this loan as an electric car, solely powered by an electric battery. This does not include hybrid vehicles.
Member-owned RACQ (Royal Automotive Club of Queensland) offers a Green Car Loan for EVs, plug-in hybrids (PHEVs) and hydrogen fuel-cell vehicles (FCEV). The rate is fixed over a period of up to five years, with loan amounts ranging from $3,000 to $150,000.
There are no establishment, ongoing or additional repayment fees on this loan, and finance is available on vehicles up to 12 months old.
With the Green Car Loan from loans.com.au, buyers can apply for finance on a loan of $5,000 to $150,000, borrowed over a period of up to seven years. This fixed rate loan provides a 1% discount on qualifying new electric cars.
To qualify as a green car, the vehicle must have a battery instead of a petrol tank, and an electric motor instead of a normal engine.
With its Electric Vehicle Loan, NRMA offers a 1.5% discount on its current interest rate for fully electric vehicles. Designed to finance brand new and used fully electric vehicles, these loans feature a fixed rate, with loan terms offered up to seven years.
Queensland Country Bank
Queensland Country Bank provides a Green Car Loan on new or demo green vehicles, offering a variable rate over a period up to seven years. Car buyers also have the option to borrow up to an additional 10% of the initial loan value to fund charging technology to support their green choice. This could include solar, battery storage or electric charging equipment.
The bank classifies a ‘green’ vehicle as one with emissions intensity that does not exceed 120 grams of C02 emissions per km (g/km). This category includes many electric and plug-in hybrid vehicles.
Community First Credit Union
The Community First Credit Union Green Car Loan offers a lower interest rate than the credit union’s standard car loan, designed to finance brand new electric and hybrid cars. Buyers can borrow from $10,000, over terms from one to seven years.
Opting to finance with Move Bank, borrowers can take advantage of the bank’s Green Car Loan, which offers a low rate for low emissions vehicles. Loans are available for new vehicles over a period of up to seven years, with finance offered from $10,000 to $150,000. A free car buying service is also available.
Bank First provides a Green Car Loan with a low rate on low emissions cars. Available on cars with C02 value of 180 g/km or less and a build date of the current year or previous calendar year, this loan features a variable or fixed rate, over a period of up to seven years.
With its EV Loan, Plenti offers a 0.5% p.a. discount to borrowers financing an electric vehicle. Loans of $10,000 to $100,000 are offered over three to seven years, with the option to bundle insurance and charging costs into the overall loan amount.
People’s Choice provides a Green Car Loan with a discounted interest rate for borrowers financing a green vehicle, whether it’s hybrid, electric or hydrogen. Loans start at $20,000 over a period of one to 10 years, to finance the purchase of a new or used vehicle up to seven years old.
Member-owned Horizon Bank offers a Green Car Loan, allowing buyers to purchase either an electric or hybrid vehicle at a low rate. Rates are fixed on loan terms up to five years, with minimum loan amounts starting at $5,000.
All information is correct at time of writing.