Finder makes money from featured partners, but editorial opinions are our own.

How to buy a green (eco-friendly) vehicle

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.

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.

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

{"visibility":"visibilityTable","ctaLabel":"Calculate","tableCode":"AUFCL_COMPARISON_V2_TABLE","nicheCode":"AUFCL","fields":[{"name":"LOAN_AMOUNT","value":"20000","options":"","label":"Loan amount","suffix":"$","useSuffixAsPrefix":true,"useDropDownOption":false,"tooltip":""},{"name":"PERIOD","value":"3","options":"","label":"Loan term","suffix":"years","useSuffixAsPrefix":true,"useDropDownOption":false,"tooltip":""}]}
Name Interest Rate (p.a.) Comp. Rate (p.a.) Application Fee Monthly Fee Monthly Repayment
loans.com.au - Green Car Loan Variable
loans.com.au logo
Variable3 - 7 Years $5,000 - $150,000
Interest Rate (p.a.)
6.09%
Comp. Rate (p.a.)
7.21%
Application Fee
$400
Monthly Fee
$8
Monthly Repayment
$629.44
Go to siteMore Info
You'll receive a variable rate from 6.09% p.a. based on your risk profile
0.7% discount on the interest rate, applies on qualifying electric and hybrid car . Early payout available with no monthly or ongoing fees.

loading
Showing 1 of 1 results

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. All Australian states and territories have reduced stamp duty for low emission cars, which helps offset the higher purchase price.
  • 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 perspective 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

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.
  • BMWi3. 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.

How much do green cars cost?

Green cars are more expensive than petrol vehicles. An electric hatch may sell for $30,000, whereas a comparable petrol model might be $15,000. Medium size sedan hybrids go for around $40,000, whereas a petrol equivalent could be as low as $20,000. For new cars, stamp duty will be less for a green car than a regular petrol vehicle.

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.
Picture: Shutterstock

Elizabeth Barry's headshot
Lead Editor

Elizabeth Barry was the lead editor for Finder. She has over 10 years' experience writing about a range of topics with a focus on personal finance. You’ll find her writing and commentary in a range of publications and media including Seven News, the ABC, MSN, the Irish Times and Singapore Business Review. See full bio

Elizabeth's expertise
Elizabeth has written 239 Finder guides across topics including:
  • Banking
  • Personal finance
  • Investing

More guides on Finder

  • Australian Vs. USA car prices 2017

    Aussies are paying up to 185.14% extra for vehicles compared to our American friends.

  • BMW Finance 2024

    How to find the finance you need to purchase a brand-new BMW.

  • 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.

  • Tesla buying guide

    If you're looking at purchasing a Tesla – Model S, Model X or Model 3 – this guide will show you how to choose a vehicle and make your purchase.

  • How do you sell a car under finance?

    Read the guide on how to sell an encumbered vehicle to find out the extra steps involved.

  • Tesla Superchargers Map: Where you can charge in Australia

    Find out the extent of Australia's Tesla Supercharger network with our complete map of every charging station.

  • How Uber car loans can help you get on the road

    Need a new loan for your next Uber car? Find out what is on offer here.

  • Macquarie car loans

    Get funding for a new or used car, motorbike or caravan as well as access to a complimentary car-buying service with a Macquarie Car Loan.

  • IMB New Car Loan

    Read our review on the IMB offers a competitive fixed with its New Car Loan to help you finance a new car or one that's up to two years old, and find out if you're eligible to apply today.

  • Cheap Car Loans Australia

    When you're shopping around for a new car, you surely want the cheapest car loan possible.

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.
Go to site