How to buy a green vehicle: Snap up your eco-friendly ride

With increasing fuel prices, energy insecurity and climate concerns due to carbon emissions, there has never been a better time to drive an eco-friendly car.

What type of car are you looking to buy?
4.6 based on 833 reviews

Key takeaways

  • Before buying a green vehicle compare the total cost of ownership for hybrid and electric cars to find out which suits your budget.
  • Check for government incentives or reduced stamp duty in your state to make a new green vehicle more affordable.
  • Plan your charging options early by confirming home setup compatibility or nearby public charging stations before you buy.

A significant level of carbon dioxide emissions in Australia is attributed to personal car use. Although public and self-propelled transport are generally less polluting than personal cars, it is sometimes necessary to use a car.

One way of reducing the amount of emissions produced from driving is to own an eco-friendly (green) car. Green cars offer an alternative to traditional petrol-consuming vehicles that rely solely on fossil fuels to run. Green cars produce low or no emissions, helping to reduce greenhouse gas emissions. There is an ever expanding range of green cars, making them an increasingly viable option. However, green cars do have limitations such as a higher price and restricted range.

What is a green vehicle?

While there is no standardised definition of a green car, it is generally considered to be one that has low carbon emissions. All cars sold in Australia must meet minimum emission requirements, but green cars exceed the minimum threshold or completely cut exhaust emissions. To do this, green cars either use electric or hybrid drive systems.

1. Hybrid

Hybrid vehicles use both petrol and electric engines to power the car. Unlike electric cars, they do not need to be plugged in to recharge the battery as the petrol engine charges the batteries. Some also utilise deceleration when braking to charge the electric engine.

They run on either the petrol or electric engine, and the onboard computer in the car switches between the two engines to maximise efficiency. For example, when the car is idle and during acceleration, the electric engine will switch on, but while cruising, the petrol engine will take over.

2. Electric

Electric cars run solely on a rechargeable battery. They are charged from charging points either at home or in public places. Some electric cars can also utilise the deceleration process to charge the battery.

Electric cars have no fuel tank or exhaust pipe and never need an oil change. However, they are restricted by the need to recharge, which can only be done in certain locations.

What are the benefits of a green vehicle?

Green vehicles have a range of benefits for both the owner and the community. Here are some reasons to drive a green car:

  • Fewer emissions. Green cars have low exhaust emissions reducing the amount of carbon released into the atmosphere.
  • No or low petrol costs. While hybrids do require petrol, they consume a lot less than regular cars. Hybrids can travel approximately 100 kilometres on 3-5 litres of petrol. This is roughly half of what is used by a comparable petrol car to travel the same distance. Electric cars don’t use petrol but do require electricity to recharge.
  • Cleaner cities. Car emissions are a major contributor to poor air quality in cities. By driving a low emission vehicle, you won’t be increasing the amount of smog.
  • Less noise. Electric engines are quieter than petrol engines. This reduces the amount of road noise in cities.
  • Reduced stamp duty. Some states and territories charge less stamp duty on eligible low-emission cars, which can help offset a higher purchase price. These concessions vary and some have ended, so check with your state or territory revenue office before you buy.
  • Increasing consumer demand. By generating demand for electric vehicles, you are helping improve the technology and bring down the price. Doing so makes them more attractive to others, creating a cycle of benefits.

How do I know a vehicle is green?

All cars sold in Australia must meet emissions testing requirements. This information should be displayed somewhere on new vehicles (generally on the windscreen).

If you are buying a fully electric car, then your vehicle won’t produce any emissions. The situation with hybrids may be slightly murkier as the manufacturer will report fuel economy that you may never be able to achieve during real-life conditions.

It is important to research prospective cars before you commit to buying one. There are independent bodies that test emissions and fuel economy on most new vehicles and might give a less biased figure.

One thing to consider with an electric car is how the car will be charged. Although electric cars have no exhaust emissions, if coal powered electricity is used to charge the car, then it is still responsible for carbon emissions. Electric cars can only be truly emission-free if a renewable source of electricity is used to charge the car.

WATCH: How to save money on an eco-friendly vehicle

2:52

What are some examples of eco-friendly vehicles in Australia?

Here are some common eco-friendly cars available in Australia:

  • Toyota Prius. An early hybrid and perhaps one of the more common green cars. They come as a medium sedan or hatch and are similar to a Toyota Corolla.
  • Nissan Leaf. A fully electric hatch with a small solar panel for internal accessories. It can do a partial recharge in 30 minutes from specific quick-charge points.
  • Tesla Model S. Tesla only makes electric cars. They aren’t cheap but are designed to perform like a sports car, not a golf cart.
  • BMW i3. A fully electric hatch for city drivers who appreciate German engineering.
  • Mitsubishi Outlander PHEV. This one is for the whole family. A hybrid SUV which reportedly gets 100km on just 1.9L of petrol.

Are there any drawbacks of green cars?

The two main drawbacks of green cars are the upfront cost and the limited range. Green cars are much more expensive than a comparable petrol vehicle. Even considering the savings on petrol, oil, maintenance and stamp duty, it would take a few years to offset the upfront expense. However, this is assuming petrol prices do not drastically increase.

Range refers to how far the vehicle can travel before needing to refuel. When compared to petrol vehicles, electric cars have a very restricted range. They are also limited to areas which have recharge stations, such as your own home or a public recharge station. This makes electric cars problematic for those who need to travel longer distances or stay away from home. However, hybrids could be a suitable option in this situation.

Green car technology is still developing, and while both these issues are certainly legitimate, you should expect rapid improvements as they become more common.

Must read: How much do green cars cost?

Green cars can cost more upfront than comparable petrol vehicles, but the price gap depends on the model, so compare current drive-away prices for the cars you're considering. Stamp duty concessions for low-emission cars vary by state and territory, so check with your revenue office before you buy.

Need a loan to buy an eco-friendly car? Compare your repayments on the below loans

$
years
Finder Score Interest Rate (p.a.) Comp. Rate (p.a.) Application Fee Monthly Fee Monthly Repayment
Interest Rate (p.a.)
6.2%
to 18%
Comp. Rate (p.a.)
6.63%
to 23%
Application Fee
$395
Monthly Fee
$0
Monthly Repayment
$622.31
Your own personal car loan broker can help you borrow up to $300,000 for your new car by choosing from a range of finance options.
Go to siteView details
Compare product selection
RACV logo
RACV New Car Loans
Fixed1 - 7 Years $5,000 - $100,000
Interest Rate (p.a.)
6.99%
to 18.19%
Comp. Rate (p.a.)
7.57%
to 18.29%
Application Fee
$499
Monthly Fee
$0
Monthly Repayment
$632.86
Go to siteView details
Compare product selection
Stratton Finance logo
Stratton Finance Used Car Loan
Fixed1 - 7 Years $10,000 - $300,000
Interest Rate (p.a.)
6.2%
to 16.53%
Comp. Rate (p.a.)
6.63%
to 17.85%
Application Fee
$395
Monthly Fee
$0
Monthly Repayment
$622.31
Your own personal car loan broker can help you borrow up to $300,000 for your new car by choosing from a range of finance options.
Go to siteView details
Compare product selection
RACV logo
RACV Used Car Loans
Fixed1 - 7 Years $5,000 - $100,000
Interest Rate (p.a.)
7.99%
to 17.99%
Comp. Rate (p.a.)
8.57%
to 18.47%
Application Fee
$499
Monthly Fee
$0
Monthly Repayment
$642.27
Benefit from no ongoing fees, 5-hour approval and a 21-day satisfaction guarantee. Interest rate discounts for members.
Go to siteView details
Compare product selection
Heritage Bank logo
Heritage Bank Green Car Loan
Fixed1 - 7 Years $20,000 - $100,000
Interest Rate (p.a.)
5.99%
Comp. Rate (p.a.)
6.34%
Application Fee
$250
Monthly Fee
$0
Monthly Repayment
$615.95
View details
Compare product selection
loans.com.au logo
loans.com.au - Green Car Loan Fixed
Fixed3 - 7 Years $10,000 - $150,000
Interest Rate (p.a.)
7.49%
to 16.29%
Comp. Rate (p.a.)
8.62%
to 17.41%
Application Fee
$400
Monthly Fee
$8
Monthly Repayment
$642.47
View details
Compare product selection
Great Southern Bank logo
Great Southern Bank Green Car Loan
Fixed1 - 7 Years $5,000 - $100,000
Interest Rate (p.a.)
6.29%
to 12.24%
Comp. Rate (p.a.)
6.43%
to 12.39%
Application Fee
$225
Monthly Fee
$0
Monthly Repayment
$617.94
The $225 establishment fee waiver is available for new or existing customers who submit a Great Southern Bank personal loan application between 30 April 2025 and 23 February 2027. Great Southern Bank may withdraw or amend this offer at any time without notice. Lending criteria, limits, conditions, and fees apply.
View details
Compare product selection
RACV logo
RACV Green Car Loan
Fixed1 - 7 Years $5,000 - $100,000
Interest Rate (p.a.)
6.49%
to 17.69%
Comp. Rate (p.a.)
7.08%
to 17.79%
Application Fee
$499
Monthly Fee
$0
Monthly Repayment
$628.18
View details
Compare product selection
Unity Bank logo
Unity Bank Green Car Loan
Fixed1 - 7 Years $1,000 - $150,000
Interest Rate (p.a.)
6.49%
Comp. Rate (p.a.)
6.49%
Application Fee
$0
Monthly Fee
$0
Monthly Repayment
$612.89
View details
Compare product selection
Bank First logo
Bank First Green Car Loan
Variable1 - 7 Years $10,000 -
Interest Rate (p.a.)
6.29%
Comp. Rate (p.a.)
6.56%
Application Fee
$195
Monthly Fee
$0
Monthly Repayment
$617.03
View details
Compare product selection
Queensland Country Bank logo
Queensland Country Bank Green Car Loan
VariableUp to 7 Years - $150,000
Interest Rate (p.a.)
6.49%
Comp. Rate (p.a.)
6.78%
Application Fee
$150
Monthly Fee
Monthly Repayment
$617.49
View details
Compare product selection
Australian Mutual Bank logo
Australian Mutual Bank Green Car Loan
VariableUp to 7 Years $5,000 - $100,000
Interest Rate (p.a.)
6.45%
to 7.1%
Comp. Rate (p.a.)
6.45%
to 7.1%
Application Fee
$0
Monthly Fee
$0
Monthly Repayment
$612.52
View details
Compare product selection
loading
Showing 12 of 12 results

Finder Score for car loans

To make comparing car loans even easier we came up with the Finder Score. Interest rates, fees and features across 200+ car loan products and 100+ lenders are all weighted and scaled to produce a score out of 10. The higher the score, the more competitive the product.

Read the full methodology

Tips for eco-friendly driving

If nothing else, you can substantially reduce your vehicle's emissions just by changing your behaviour. Here are some green driving tips:

  • Accelerate slowly and smoothly. Engines use the most fuel when operating under strenuous conditions. In terms of driving, this is when you are accelerating. Try to limit rapid or erratic acceleration.
  • Anticipate traffic conditions. The most efficient way to drive is to maintain a fairly constant speed. Rapid slowing and accelerating wastes fuel. Anticipate the conditions ahead to minimise the amount you need to slow down or speed up.
  • Remove unnecessary equipment. Extra weight and accessories decrease the efficiency of your vehicle. Roof racks cause drag and tools add extra weight. If you don’t regularly use or need them, get rid of them.
  • Maintain your vehicle. Basic maintenance such as checking tyre air levels and engine oil is an easy way to keep your car running efficiently. Performing routine services will also help identify problems to keep your vehicle operating optimally.

Green cars are becoming increasingly viable for those living in cities. If you are concerned about your vehicle's carbon emissions and its effect on the environment, then you should consider an eco-friendly alternative. However, be aware of the additional upfront cost and limitations before you commit.

Frequently asked questions

Elizabeth Barry's headshot

Elizabeth Barry is an experienced journalist with over 10 years of expertise in personal finance, contributing to outlets like the ABC, Sydney Morning Herald, and 7News. She holds a Master of Arts in Creative Writing and a Bachelor of Arts in Communication from the University of Technology Sydney, and has earned multiple award nominations, including a Highly Commended recognition at the 2017 Lizzies. Elizabeth began her career at Finder in 2013, progressing through roles to become Lead Editor, where she oversaw a wide range of personal finance coverage until 2024. See full bio

Elizabeth's expertise
Elizabeth has written 154 Finder guides across topics including:
  • Banking
  • Personal finance
  • Investing

Get rewarded $$ for switching with Finder Rewards

Find a better deal, save on your bills and get a free gift card. Sign up to be the first to hear about new Finder Rewards.

Ask a question

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms Of Service and Finder Group Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

More guides on Finder

  • carbar Novated Leasing

    Choose from one of carbar’s wide range of vehicles and drive away with simple repayments and less income tax

  • RACV Boat Loan

    RACV offers competitive rates, flexible repayments and no maximum limits on their boat loans.

  • Toyota finance options in Australia

    Your comprehensive guide to car finance to help you buy a new Toyota.

  • Compare car loans for classic cars

    Want to buy a classic car but don't have the ready money? There are still financing options available for classic vehicles. Find out what loans you have to choose one and which one will work best for you.

  • How do you buy an encumbered car?

    Buying a financed car is a little more complicated than it is with normal vehicles, but this shouldn’t put you off – find out what you need to know.

  • Uber car rental Melbourne

    Find out how you can still earn with Uber even if you don't have a car (or don't want to use yours).

  • IMB New Car Loan

    This loan pairs a competitive interest rate from the top 20% of our database with no ongoing monthly fees.

  • Used car buying tips

    Learn what you need to know about the used car buying process, ranging from how to finance your vehicle to what you need to check on the car.

  • RACV Car Loans

    Find out the range of RACV Car loans available for you to compare. You can finance a new car and lock in a competitive rate for your loan – find out about all the fees and features that come with this loan to apply today.

Go to site