Find out if you can get a better deal on an eco-friendly car and compare loans now.
With the rise of hybrid and electric vehicles, it's never been easier to do your part for the environment. Many lenders now offer better rates on car loans for vehicles that are considered environmentally friendly.
Find out how green car loans work, how to apply, and compare loans below.
Compare green car loans
What is a green car loan?
A green car loan is any vehicle finance option available for cars that are better for the environment, generally meaning those with lower than average emissions. These include hybrid and electric vehicles, as well as normal cars with noticeably better fuel efficiency.
WATCH: How to save money on an eco-friendly vehicle
How does a green car loan work?
A green car loan effectively works the same as any other car loan. If you apply for a loan for a vehicle that meets the lender's definition of environmentally friendly, you will generally receive an interest rate discount of 0.5%-1% and may be exempt from certain fees.
In addition to a discounted rate, some lenders will also offset your carbon emissions for the term of the loan to help reduce your carbon footprint.
You will generally apply for a green car loan like you would any other car loan, and simply select the green car loan option during the application process.
How do I know which cars can be used on a green car loan?
While the list of eligible vehicles will vary by lender, a car may be eligible if it meets one or more of the following requirements:
- It is a new vehicle
- It is a hybrid or electric vehicle
- It is more fuel efficient than the average car in its class
However, you will need to check with the specific lender to see if a certain vehicle is eligible, and not all versions of the same model will necessarily meet the criteria.
What are the benefits of a green car loan?
- Interest rate discount. Most green car loans offer you a reduced rate as part of the loan.
- Saving on car running costs. As green cars are more fuel efficient, you will likely be paying less to drive your car.
- Reducing emissions. Green cars also have lower-than-average CO2 emissions and help protect air quality and the environment.