A green car loan guide

Compare green car loans and find out if it can help you save money on a loan plus do your bit for the environment.

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After a hybrid or an electric car?

You can save money with a green car loan in Australia plus 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, benefits, how to apply, and compare loans below.

Compare green car loans

Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Application Fee Monthly Service Fee Monthly Repayment
Loans.com.au - Green Car Loan
3.97% (fixed)
3 to 5 years
You'll receive a fixed rate from 3.97% p.a. based on your risk profile
0.7% discount on the interest rate, applies to a new or demo green car. Early payout available with no monthly or ongoing fees. Settle the loan before 30 November 2021 and enter the draw to win a $1,000 fuel gift voucher. T&Cs apply.

Compare up to 4 providers

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.

If you're just searching for a car that has a limited environmental impact, you can use the Government Green Vehicle Guide to find a vehicle.

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.

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Car Loan Offers

Important Information*
Logo for IMB New Car Loan
IMB New Car Loan

You'll receive a fixed rate of 4.88% p.a.
A low minimum borrowing amount of $2,000 that you can use to purchase a new car or one up to two years old.

Logo for Beyond Bank Low Rate Car Loan "Special Offer"
Beyond Bank Low Rate Car Loan "Special Offer"

You'll receive a fixed rate of 4.69% p.a.
Take advantage of a competitive rate, pre-approval and no early repayment fees when you finance a car under two years old.

Logo for RACV New Car Loans
RACV New Car Loans

You'll receive a fixed rate from 4.99% p.a.
A larger loan of $5,000 or more to help you buy a new or used car. 5-hour pre approval available and no ongoing fees.

Logo for NRMA New Car Loan
NRMA New Car Loan

You'll receive a fixed rate of 4.99% p.a.
Purchase a new or used car up to 2 years old and benefit from a fixed rate and no monthly fees. Pre-approval available within 5 business hours.

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