Green Car Loan – Finance for EVs and Hybrids Better finance.
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The take-up of EVs, electric vehicles, has been slower in Australian than in many overseas countries but has shown signs of increased sales in recent monthly car sales figures. A concerted effort is being made by government and others to reduce emissions to meet targets and the auto sector is seen as a major way to achieve that. Manufacturers are introducing new models, increasing range and infrastructure is being addressed to support EV owners. Pricing has been an issue for many buyers as has been availability of recharging and range. Issues which are being addressed.

An EV is an electric vehicle. They are available in many body types and across a range of prices. Essentially, an EV is a vehicle powered by a battery. The battery is recharged by plugging in at a charging station. A number of different variants come under the general ‘EV’ umbrella including PHEVs which are plug-in hybrid electric vehicles. These vehicles use both battery and petrol. The battery power suited for short trips while the traditional combustion engine can be used for longer trips. The move to EVs is seen as an important way to reduce carbon emissions and address climate change on a global level. EVs

Purchasing a green car – a fully battery-operated EV or a hybrid, is seen as a positive move in addressing climate change by reducing emissions. The price of green cars has been higher than for traditional fuel vehicles, but the financial benefits are seen in the reduced fuel costs and lower car servicing and maintenance expenses. Securing a green car loan at the cheapest available interest rates can result in a cheaper overall finance package and cost of the EV. An outcome which may be seen as a valuable investment for the buyer.

The interest rate on a green car loan will be calculated, assessed and offered on the same criteria and guidelines as for other finance for traditionally powered vehicles. To get the best rate on a green car loan, buyers can address several aspects of the finance application process. The interest rate on green car loans will vary across the lender market. Engaging a finance broker to assist by covering off on many lenders to source the best rate may assist. Applicants can also address issues with their credit profile as lenders typically offer the best rate to applicants with a good credit score.

The price range of electric vehicles is quite extensive while most are higher than the prices for new petrol-powered vehicles. Most manufacturers are adding new models to their ranges with each new year. The selection varies from lower priced vehicles such as hatches through family sedans and the small and medium SUVs, right up to the luxury, high-end price range for prestige brands. With cuts to import taxes on some electric vehicles, the price is expected to be reduced. As demand increases over time, pricing may also come down. The purchase price of electric vehicles may be offset by securing cheaper EV finance with better interest rates.

Yes. A loan for a hybrid vehicle is readily available through many banks, lenders and brokers that off motor vehicle finance. The type of loan required will depend on if the hybrid vehicle is for personal or business use. Private purchases of a new hybrid vehicle may be best-suited to a Secured Car Loan. Purchasers of business vehicles can select from the range of products including Chattel Mortgage, Leasing and Commercial Hire Purchase. The type of business finance will depend on the set-up of the business and accounting matters. Loans for hybrid vehicles are available for many types of buyers including those setting up new businesses and those with credit issues.

The car loan options for an electric vehicle vary for private and for business buyers. For private buyers the Secured Personal Loan may be seen as the most suitable car loan option. With this car loan, the electric vehicle is accepted as the security for the car loan. A fixed interest rate is typically applicable, as is a fixed loan term. This results in fixed monthly car loan repayments. The business car loan options for an electric vehicle include Chattel Mortgage, Commercial Hire Purchase and Leasing. Low Doc and No Doc car loan options for businesses without all the documents to complete a business application are available through specialist motor vehicle finance lenders and brokers.

The government incentives to buy an EV will vary with timing and eligibility. Several state governments have introduced incentives for EV buyers via a cash rebate system. In the past, these programs had a limited time frame but new incentives may be introduced in the annual state budgets. State budgets are handed down in March-June each year and vary for each state or territory. The Albanese Government introduced a cut to the import duty on some EVs in order to reduce the purchase price of new vehicles. Prospective buyers would be advised to check the current incentives to buy an EV prior to purchase and ensure they meet the eligibility criteria. The incentives may vary from state to state.

Yes. The full range of business car loan products is available for the purchase of an EV. To be eligible, applicants must have an ABN and the vehicle must meet ATO criteria in regard to being used in the business for primarily business purchases. The business car loan selection includes Chattel Mortgage, Leasing, Commercial Hire Purchase and Novated Car Lease with Salary Sacrificing. The suitable of finance product will depend on the accounting practices and financial objectives of the business, and the approach to taxation and balance sheet. It is highly recommended that business owners consult with their accountant in respect to the choice of business car loan type.

Yes. Secured loans are available for both private buyers and businesses that are purchasing a green car and other electric vehicles. For buyers purchasing a new green car for personal/private use, the Secured Car Loan is the most widely used type of car loan for all types of new cars and many second- hand vehicles. With a secured loan, the vehicle is accepted by the lender as the security or guarantee against the loan. With many applications, no further security by way of assets or property is usually required for the loan.

Many banks, finance companies and motor vehicle finance brokers offer the facility to apply for a loan for a green car. The process for making a loan application can be relatively easy with many lenders offering online applications. If a personal car loan is required, lenders and applicants must adhere with the consumer finance laws. The application would require details of income, employment, financials and other information. Lenders will assess each application individually and review the credit profile. Applicants with a good credit score are typically offered a better rate. For individuals with a poor credit profile or bad credit issues, getting a loan for a green car may be more difficult with some lenders. Using a finance broker may assist in facilitating the process.

Yes. Comprehensive car insurance is required to be taken out as a condition of secured car loans and motor vehicle finance contracts. This applies to Personal Secured Car Loans as well as business vehicle finance products – Chattel Mortgage, Leasing and Commercial Hire Purchase. New and used vehicles that are accepted as security for car finance must be fully covered by insurance. Lenders will request the insurance policy details and an update that the policy has been renewed each year until the finance is finalised.

The opinion on the which electric car loan is best may be personal or subjective. For many buyers the best loan will be the electric car loan which has the cheapest interest rate and which has been individually sourced and negotiated to deliver an outcome which suits their budget. The interest rates on electric car loans will vary across the motor vehicle finance market. Some conditions attached to individual electric vehicle loans may also vary depending on the details in the application. Buyers with a good credit score can be offered a better interest rate. Using a motor vehicle finance broker can assist in securing better rates and a better electric car loan.