Green Car Loans

Reduce your carbon footprint and buy an environmentally friendly car with a green loan through Savvy.

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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The push towards electrified and partially electrified vehicles is gathering momentum in Australia. According to the Federal Chamber of Automotive Industries (FCAI), 23.5% of all cars sold in Australia in March 2024 were EVs, PHEVs or hybrid vehicles, while they accounted for 16.2% (196,868) of all new Australian cars sold in 2023.

With this rise in demand, lenders are now offering green car loans to cater to those looking to finance their eco-friendly vehicles. You can compare a range of options for your electric or hybrid car right here with Savvy, so get started today with a free, no-obligation quote!

What are green car loans?

Green car loans are a type of secured car finance designed to help you buy an environmentally friendly car, such as an EV or hybrid vehicle. The key factor setting it apart from other products is that it often comes with a rate discount and/or fee reductions or waivers. The product itself is no different from a standard car loan in terms of its structure.

Although electrified and low-emissions vehicles are growing in popularity around the country, not all lenders offer this product. As a result, it’s worthwhile comparing your lending options to find one which allows you to finance your green car the most cost-effectively, which you can do with Savvy.

What is classified as a green car?

The exact makes and models which can be purchased under a green finance deal will vary depending on the lender and their criteria. However, the general vehicle types which you can buy with a green loan can include the following:

  • Electric vehicles: these are cars which are run 100% on battery power and are also known as battery electric vehicles (or BEVs) as a result.
  • Plug-in hybrid electric vehicles (PHEVs): one of two types of hybrid vehicle currently available, PHEVs run on both electricity and petrol but, as the name suggests, can be charged via a plug-in electricity source.
  • Hybrid vehicles: the second type of hybrid car, simply known as hybrid vehicles (or HEVs), operate on both electricity and petrol but aren’t able to be charged.
  • Low-emission petrol-based vehicles: green loans aren’t just for cars which partially or entirely run on electricity. Some lenders offering these products will also allow the purchase of models which produce low emissions.

If you’re unsure whether the vehicle you’re looking to buy qualifies as a green car, get in touch with your lender or read their green car loan requirements. Alternatively, you can check the Australian Government’s Green Vehicle Guide to see how different models rank against one another in terms of emissions.

The most popular green 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.

Electric vehicles

Car make and model Total new car sales
Tesla Model Y
Tesla Model 3
BYD Atto 3
Volvo XC40 Recharge
Polestar 2
Kia EV6
Mercedes-Benz EQA
Volvo C40 Recharge

Hybrid vehicles

Car make and model Total new car sales
Toyota RAV4
Toyota Corolla
Toyota Camry
Toyota Kluger
Toyota Corolla Cross
Toyota Yaris Cross
GWM Haval H6
GWM Haval Jolion
Lexus NX
Toyota C-HR


Car make and model Total new car sales
Mitsubishi Outlander PHEV
Mitsubishi Eclipse Cross PHEV
Mazda CX-60 P50e
Volvo XC60 Recharge
Kia Sorento PHEV
Cupra Formentor VZe
Volvo XC90 Recharge
Mini Countryman Cooper SE
Lexus NX450h+

How much will my green car loan cost?

As mentioned, green car loans are generally cheaper than standard car loans due to the interest rate discount included by most lenders who offer them. However, the cost of your loan will ultimately come down to a variety of factors specific to your profile, including the following:

  • Your interest rate: the lower your rate, the lower the cost of interest on your loan.
  • Your fees: another area to consider closely is fees. Even if you find a product with the lowest rates, it’s important to check its fees to confirm whether it’s actually the cheapest.
  • Your loan term: the faster you pay off your car loan, the less interest you’ll pay.
  • Your loan size: the same rate on a smaller loan compared to a larger one will result in less interest charged overall.
  • Whether you make additional payments: extra payments across your loan term will reduce the amount of interest you’ll pay, although you may be charged early break fees by some lenders.
  • Whether you add a balloon payment: a balloon or residual payment can be added as a lump sum to be paid at the end of your loan, which will increase the interest paid overall.
  • Your repayment frequency: even if you decide to pay weekly or fortnightly instead of monthly, you can save money across your loan.

The following table demonstrates how different interest rates and loan terms can impact the cost of car finance:

Loan size 7.00% p.a. 8.00% p.a. 9.00% p.a. 10.00% p.a.

Source: Car Finance with Instant Approval Online – Savvy

You can use Savvy’s car loan calculator to help you work out the monthly and overall cost of your finance deal.

How should I compare green car loans?

There are several key areas in which to compare green car loans, with some of the most important being the following:

  • Interest rates: the minimum rates offered are very important to consider, as these will form the most substantial cost of your car loan. Even small differences of 0.5% p.a. can save you hundreds of dollars overall.
  • Fees: additionally, many green car loans may either reduce fees or waive them entirely. This can include establishment and ongoing fees, which can add up to hundreds of dollars combined. However, not all lenders may reduce their fees, so these are crucial to consider.
  • Vehicle eligibility: of course, it’s essential to make sure the car you’re buying qualifies for finance with different lenders, so this is a simple way to compare and narrow down your options.
  • Available terms: while some lenders will offer the full range of terms from one to seven years, others may limit you to a minimum of three and/or a maximum of five, so it’s important to ensure you find a term which suits your needs.
  • Applicant eligibility: on top of ensuring your vehicle is eligible, you should narrow down your options to include only those which can accept your application. Factors include age, residency, employment, income and credit history.

When applying with Savvy, however, your consultant will do all the heavy lifting and car loan comparisons for you. They’ll keep your preferences and situation front of mind when comparing offers to find the best one for your needs, seeking out the most affordable deal and only considering those for which you and your vehicle are eligible.

The pros and cons of green car loans


Discount on interest rate and fees

The main benefit offered by green car finance is the discount available to vehicle buyers, which comes in the form of both reduced rates and reduced or waived fees.

Same loan structure as standard car loans

These are effectively the same product as a car loan, meaning there aren’t any major structural differences which applicants will need to wrap their head around.

Reducing your carbon footprint

By purchasing a green car, such as an electric or hybrid vehicle, you can be safe in the knowledge that you're helping reduce emissions in Australia.


Criteria differs between lenders

What constitutes a green car and the other eligibility criteria for vehicles which fit under this product can vary between lenders, so it’s important to apply with Savvy.

Fewer options available for used green cars

Green car loans are designed to incentivise the purchase of the latest environmentally friendly vehicle technology, which may make it more difficult to purchase a used car.

Not available with all lenders

Additionally, green loans aren’t offered by every lender, meaning you won’t have as many options to choose from compared to standard car loans.

Why Australians take out green car loans through Savvy

How to apply for a green car loan with Savvy

Our Process

Submit your application online

Firstly, tell us about yourself and the car you’re after. This will help your consultant determine which of our partnered lenders can offer the best green finance deal. You can do this online or apply over the phone.

Submit any further documents

We may request additional documents to verify your employment and income, which you can submit through our online portal. You can also electronically sign documents like your consent form here.

Discuss with your consultant

Once we’ve compared from our lenders, your consultant will reach out to inform you of what the best options are and offer an indicative interest rate. If you're satisfied with this choice, we can proceed.

Get approved, settle and sail away

Your consultant will prepare and submit your application for formal approval, which can come as soon as one business day after. We’ll handle the settlement with your vendor so you can drive away!

More common green loan questions answered

Are there any other costs to think about when purchasing a green car?

Yes – as is the case with all cars, you’ll have to budget for costs such as stamp duty, vehicle registration, comprehensive car insurance and other on-road costs. If you’re buying an electric vehicle, you’ll also have to consider a charging station in your home to ensure it remains charged when you need it.

Do I have to take out a green loan when buying a green car?

No – electric and hybrid vehicles can still be purchased with a standard car loan, which may be required if they don’t otherwise meet the eligibility criteria set in place by your lender. You might also find that in some cases, the standard rate offered by one lender may be lower than the green car loan rate offered by another, so it may be your best option. Apply with Savvy and your consultant will help you find the most suitable car loan for your vehicle purchase with the lowest rate.

Will my interest be fixed or variable?

Secured car loans typically come with fixed interest rates, meaning you’ll know for certain what you’ll be paying each month and over the course of your agreement should you stick to your schedule. You can speak with your Savvy consultant if you're looking for a product with variable rates.

Can I take out a green loan for a commercial vehicle purchase?

Yes – there are lenders amongst our partners who can offer business operators purchasing green vehicles for commercial purposes a discount on rates and fees. As such, you can still take advantage of this benefit even when buying on behalf of your business.

Will I have to pay the Luxury Car Tax (LCT) on my green car purchase?

You may have to pay LCT if you decide to import a green car and its value exceeds the taxable threshold. However, the threshold for fuel-efficient vehicles, which is defined by the ATO as those which don't exceed a combined fuel economy of 7L/100km, is higher than for other vehicles. As of the 2023-24 financial year, this is set at $89,332, compared to $76,950 for other cars.

Are there any incentives for buying a green car in my state?

Various states offer incentives to buyers purchasing green cars, especially EVs. This can come in the form of reductions on costs like registration or stamp duty. You can find out whether they apply in your state or territory here:

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