Electric Car Loans

Compare a variety of competitive loan deals for your electric car purchase with Savvy today!

Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
Our authors
, updated on April 19th, 2024       

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Electric vehicles (also known as EVs) are becoming increasingly common as Australians make the switch to more eco-friendly modes of transport. According to the Federal Chamber of Automotive Industries (FCAI), VFACTS data revealed that 7.2% of all cars sold in Australia in 2023 were battery electric.

Lenders are, in turn, offering a suite of products designed specifically for these cars which can make purchasing them more affordable. If you’re in the market for an EV, you can compare a range of electric car loans in one place with Savvy. We’re partnered with a suite of trusted Australian lenders to give you the best chance of finding a great deal for your car. Get started with a free, no-obligation quote today!

How do electric car loans work?

Electric car loans (commonly referred to as green car loans) in Australia are essentially the same as any other standard car loan in terms of their structure. However, in some cases, those buying electric or hybrid models (or select low-emissions vehicles) are able to qualify for a specialised car loan product which offers a discount on interest and fees.

This can be an important factor to consider in the process, as securing such a discount can help you save hundreds over the life of your loan agreement. Take the following example to compare a standard and electric car loan worth $60,000 over five years:

Type of loan Interest rate Establishment fee Ongoing fee Monthly repayment Overall cost
Standard
7.00% p.a.
$300
$10
$1,195
$72,241
Electric
6.50% p.a.
$0
$0
$1,174
$70,439

As you can see, you’d stand to save almost $1,800 by taking out a loan with a small interest discount and waived establishment and ongoing fees, making it one of the best ways to finance your car purchase.

It’s also important to mention that these loans can sometimes come with stricter requirements relating to vehicle eligibility. Each lender will have its own set of criteria and/or list of cars which qualify for financing under an electric car loan.

Even if your chosen car doesn’t make the cut, though, this doesn’t mean you won’t be able to find an affordable loan deal to purchase your chosen electric car. Your Savvy consultant will compare offers on our panel to find the best available option for your situation.

Which electric car loan features are important to compare between lenders?

As is the case with any car loan, it’s crucial to compare your options thoroughly to help you secure the best available deal for your situation. However, when you apply with Savvy, your consultant will do the heavy lifting for you, saving you valuable time in the process. Some of the key areas to consider are:

Interest rate and fees

Of course, it’s important to keep an eye on the various costs which apply to car loans. Look for the lowest interest rates and fees available on loans which otherwise meet your needs and enjoy savings worth up to hundreds, if not thousands, of dollars.

Eligibility criteria

Each lender has different criteria when it comes to who is eligible to apply for a loan. However, the general points which apply include:

  • You must be at least 18 years old
  • You must be an Australian citizen, permanent resident or, in some cases, an eligible visa holder
  • You must be employed in a stable job
  • You must be earning a consistent income (generally at least $20,000 to $26,000 per year) which is enough to support your repayments
  • You must have a good credit history (options exist for borrowers with bad credit, though)

Whether green car loans are offered

It’s worth looking at whether each lender offers specialised green or electric car loans or, more specifically, a rate discount for electric and hybrid vehicles.

Accepted vehicles

As mentioned, not all electric vehicles will qualify for rate discounts, so it’s important to check different accepted vehicle lists to find a lender that can work with your car (which your Savvy consultant will help you do).

Minimum and maximum loan terms

While you can repay the loan over between one and seven years, some lenders may require you to stick to a minimum of two to three years or a maximum term of five.

Repayment flexibility

It’s often worthwhile having the option to repay your car loan ahead of schedule, as doing so will reduce the amount of interest and fees you’d otherwise be liable to pay. Because of this, you might look for lenders who offer free additional repayments and low or no early exit fees.

The most popular electric cars in Australia: 2023

The following statistics are for the most recent completed year of 2023 (at the time of writing) and are obtained through the FCAI’s VFACTS data.

Car make and model Total new car sales
Tesla Model Y
28,769
Tesla Model 3
17,347
BYD Atto 3
11,042
MG MG4
3,134
Volvo XC40 Recharge
2,846
MG ZS EV
2,794
Polestar 2
2,463
Kia EV6
1,831
Mercedes-Benz EQA
1,196
Volvo C40 Recharge
1,103

Why Australians take out green car loans through Savvy

The pros and cons of buying an electric car

PROS

More environmentally friendly

The biggest bonus when buying electric or hybrid cars is the impact (or lack thereof) on the environment, with far lower emissions produced on the roads.

Save on petrol costs

Petrol can be a massive drain on your finances, particularly if you’re driving often, but buying electric means you won’t have to worry about it at all.

Able to be charged in your home

You can install a vehicle charger at home, saving you from having to search around for an outlet at service stations and maximising convenience in the process.

Less costly ongoing maintenance

Because electric cars don’t have a complicated engine under the hood or other parts present in petrol cars, you’re likely to save on ongoing maintenance work.

Tax and on-road cost discounts

Depending on where you live, you may be eligible for discounts or waivers on stamp duty and registration costs, as well as a higher threshold for the luxury car tax (LCT).

CONS

More expensive to purchase

As electric cars are still relatively new in the Australian market and not offered by all, or even most, manufacturers, you’re likely to pay a higher price for them.

Longer recharge time

While filling up your tank at the petrol station may only take a minute or less, charging your electric car could be an hours-long process in some cases.

Potentially greater distance limitations

Many electric vehicles aren’t capable of travelling very far without needing to be charged, with some only able to drive less than half as far as a standard car.

The Savvy EV car loan application process

Our Process

Get a quick online quote and apply

Fill out a quote with us, after which you can apply formally if you choose to. Once your consultant has your application, they can get to work comparing offers.

Speak with your consultant

Your consultant will get in touch with you to discuss the best available option for your situation based on their thorough comparison of our lender database.

Have your application prepared and submitted

Once you’re happy with the loan on offer, your consultant will prepare your formal application and submit it to your lender for approval.

Receive formal approval and drive away

You can be formally approved in as little as one day, after which you can sign your loan contract, settle the agreement and own your new or used electric car.

More common electric car loan questions answered

How often will I make my car loan payments?

On top of deciding whether to repay your loan over between one and seven years, you’ll also decide whether to set these instalments to be paid each week, fortnight or month in line with whichever frequency suits you the most.

Can I access financing for electric vehicles anywhere in Australia?

Yes – by applying with Savvy, you can be approved for a loan to help you buy your vehicle regardless of whether it’s inside or outside your home state. You could be living in Adelaide and get approved for a loan to buy a car in Sydney. Our lending partners can help you get approved for your dream car before you know it.

How much will I be able to borrow to purchase my electric car?

There’s a range of factors which can impact how much you can borrow, which include:

  • The stability of your employment
  • Your income and expenses
  • Your liabilities, such as any other outstanding loans
  • Your credit history

 

You can use Savvy’s car loan calculator to show you how much different car loans might cost you overall so you can get an idea of what loan sizes and terms you might be able to afford.

Can I include other on-road costs in my electric car loan?

Yes – vehicle costs such as stamp duty, registration and insurance premiums can all be incorporated into your car loan if you wish to include them. This helps you space out the costs more and manage one single loan payment.

What’s the difference between a hybrid vehicle and plug-in hybrid vehicle?

A hybrid car is one which operates on both an electric battery and fuel-powered engine, either at the same time or separately. In contrast, a plug-in hybrid (HPEV) relies largely on its electric battery to run but uses its petrol-powered engine as a back-up if it runs out of charge.

Are home charging sockets the best way to recharge my electric car?

Installing a socket at home is the most cost-effective and convenient way to charge your car, as you won’t have to rely on charging it at service stations which may or may not have the required infrastructure to do so. However, it’s typically much slower to recharge your car at home, as this can take up to 12 hours in some cases, compared to a public charger which will typically take less than one and as little as half an hour.

What is the Luxury Car Tax (LCT) threshold for electric cars?

For the 2023-24 financial year, the threshold for LCT on electric, hybrid and fuel-efficient vehicles is $89,332. This is charged on imported vehicles, with every dollar above the threshold taxed at 33%. For reference, the threshold for all other vehicles is 76,950.

Can I get a discount on stamp duty or car registration with an electric car?

Yes – as mentioned, depending on where you live, you may be able to receive incentives for purchasing an EV. Check your state or territory’s website in the list below for more information:

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