Car Loans

Compare green car loans 2021

Learn what a ‘green car’ is and what some of its benefits are.

Low rate green car loans 2021

The table below features car loans with some of the lowest fixed interest rates for low-emissions vehicles on the market.


VariableNew1 yearMore details

Electric and Hybrid Car Loan

    FixedNew2 yearsMore details
    • Quick application process and no monthly fees
    • Low fixed interest rates with terms of up to seven years
    • New car loans cover cars up to 3 years old

    New Vehicle Fast Loan Low Rate

    • Quick application process and no monthly fees
    • Low fixed interest rates with terms of up to seven years
    • New car loans cover cars up to 3 years old
    FixedNew, Used5 yearsMore details

    Fixed Car Loan (with Low Emission Vehicle discount)

      FixedNew1 yearMore details

      Green Car Loan Fixed

        *Comparison rates based on a loan of $30,000 for a five-year loan term. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 22, 2022. View disclaimer.

        Guides and resources:

        What is a green car?

        A green car is a car that is better for the environment than standard cars because it produces fewer carbon dioxide emissions. Carbon dioxide (CO2) is a greenhouse gas and one of the biggest contributors to global climate change. It is produced by burning organic and carbon compounds such as petrol so environmentally friendly cars often run on little-to-no fuel.

        Some lenders offer a discounted interest rate on car loans for low emission vehicles to encourage borrowers to be more environmentally aware.

        So essentially, lower emissions can equal lower interest rates, which means more savings. 

        What qualifies as a green car?

        A car needs to have significantly lower than average carbon dioxide (CO2) emissions to qualify as a ‘green car’ and this must be compared to other vehicles of its size. This means it doesn't necessarily have to be a hybrid or electric model

        According to, you are likely to qualify for a green car loan if the car:

        • Is a new or demonstration vehicle
        • Is more fuel efficient than average (when compared to cars of its size)
        • Is a hybrid or electric vehicle (which uses both petrol and electric engines to power the car)
        • Emits less than 141 grams of CO2 per kilometre for a passenger vehicle, or less than 188 grams of CO2 for a ute or van

        This information should be displayed somewhere in the vehicle – either on the windscreen or in the service manual.

        What are the benefits of owning a green car?

        There are a number of benefits involved in driving a green car – both for the environment and for the owner. In particular, green cars:

        • Can reduce the interest rate on a car loan, saving you money over the course of the loan
        • Produce fewer emissions, which reduces the amount of CO2 released into the environment
        • Create less noise than regular vehicles with sole combustible engines
        • Will generally save you money on the cost of fuel as they are more fuel efficient (which means fewer stops at the fuel station)

        Can I save money with a green car loan?

        A recent initiative to help reduce carbon emissions was the introduction of discounted loans for environmentally-friendly cars. Vehicles which meet the eligibility requirements above can receive interest rates up to 100 basis points lower, saving you money over the course of the loan.

        Case study

        Damien was looking at taking out a $30,000 car loan (5yr term) when he noticed that his lender offered a 0.7% p.a. discounted rate for green cars. After doing some research, he discovered that while green cars were a little more expensive upfront, he would not only save money from fuel efficiency (and reduce his CO2 emissions) but that he would also save nearly $600 in interest payments over the loan term from the discount he would get from his lender.
        Damien decided that the sum of the benefits was worthwhile in buying a car that qualified for a green car loan.’s two cents

        For some people, the benefits of discounted interest rate and fuel efficiency of green cars outweigh the higher purchase price. At the end of the day, it depends on your personal financial situation.

        Frequently Asked Questions

        The process to obtaining a green car loan is very much identical to a regular car loan, with the addition of factoring in fuel emissions and carbon dioxide value to ensure your vehicle meets ‘green' requirements. Lenders will assess the vehicle you intend to purchase as well as your financial position while ensuring you meet the requirements of being over the age of 18, an Australian citizen or permanent resident and having a regular income.

        If you are in the market for a new car and are leaning towards purchasing an eco-friendly vehicle, a green car loan can help save you thousands over the life of your loan. While green cars are generally more expensive upfront, the benefits outweigh the costs as you are not only saving money from fuel efficiency but also interest payments across the entire loan term. As mentioned, it’s important to note green car loans are generally restricted to cars with lower fuel emissions, so not all cars are eligible.

        Green in nature, not colour, a green car loan is a vehicle finance option tailored to vehicles designed to be beneficial for the environment with below average fuel emissions. These include hybrid and electric vehicles, as well as normal cars with noticeably better fuel efficiency.

        As a rule of thumb, green car loans offer lower interest rates as an incentive for choosing eco-friendly vehicles. The lower interest rate is typically available to cars with carbon dioxide value of 180 g/km or less, although this threshold may vary by lender.