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.

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.

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.

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

Rates last updated February 18th, 2018
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Monthly Service Fee Application Fee Product Description Monthly Repayment
IMB New Car Loan
From 5.99% (fixed)
1 to 7 years
Borrow up to $75,000 for a new car up to two years old. Competitive 5.99% p.a. rate available to all approved applicants.
Stratton Finance New Car Loan
From 5.49% (fixed)
1 to 10 years
Benefit from a car broker with over 25 years experience
Latitude Car Loan
From 6.99% (fixed)
1 to 7 years
A secured loan with a competitive rate that can help you finance a range of new or used vehicles.
Heritage Bank Car Loan
From 8.99% (fixed)
1 to 7 years
Apply for up to $100,000 to finance a new or used car at a competitive fixed rate.
RACV Personal Loan
From 7.49% (fixed)
1 to 7 years
Take advantage of a competitive rate by securing an asset to this loan. Use the funds for any purpose.
Beyond Bank Low Rate Car Loan
From 5.69% (fixed)
1 to 7 years
A great rate for cars under 2 years old.
IMB Secured Personal Loan
From 6.89% (fixed)
1 to 5 years
All approved applicants can access this competitive rate and use the loan to finance a range of purposes. Loan amounts up to $60,000 available.
MoneyForJam Car Loan
From 4.95% (fixed)
1 to 7 years
Apply for a car loan from $5,000 and get access to a panel of lenders.
From 5.16% (fixed)
1 to 7 years
AutoCarLoans can match you with a lender from its panel with rates starting from 5.16% p.a. Suitable for vehicles up to 2 years old.
MyState Secured Personal Loan
From 7.99% (variable)
1 to 10 years
Apply for a loan up to $75,000 and benefit from loan terms up to 10 years. Your choice between secured or unsecured.
Freedom Finance Car Loan
From 5.1% (fixed)
1 to 5 years
If you meet all the requirements you could get access to a range of lenders to finance a new or used car up to 4 years.
Westpac Car Loan
From 8.49% (fixed)
1 to 7 years
Finance a new or used car and benefit from great features for car buyers including a car search tool and the option to borrow extra for on-road costs.

Compare up to 4 providers

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Car Loan Offers

Important Information*
IMB New Car Loan

Borrow up to $75,000 for a new car up to two years old. Competitive 5.99% p.a. rate available to all approved applicants.

Beyond Bank Low Rate Car Loan "Special Offer"

A great rate for cars under 2 years old.

RACV New Car Loans

A competitive rate car loan from RACV with no monthly fees and 5-hour loan approval.

Heritage Bank Car Loan

Apply for up to $100,000 to finance a new or used car at a competitive fixed rate.

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