It’s no secret that picking up a brand new car costs more than just a few pennies and with budgets getting tighter, it’s not surprising to know that many Aussie drivers may be looking at other options to get their dream across the finish line, like a car loan.
You may not have thought about it before but not all car loans are alike, and it's actually possible to save more than a few dollars by opting for one type of car loan in particular - all you need to do is go green.
“Green car loans have been around for a while and were designed to help borrowers purchasing purchasing eco-friendly vehicles get a better deal,” said Mozo Director, Kirsty Lamont.
“These kinds of loans reward borrowers for making an environmentally conscious choice with a lower interest rate, which can mean savings in the thousands of dollars over the life of the loan.”
So we decided to put that idea to the test with a Mozo number crunch.
Let’s say you decided to borrow $30,000 to be repaid over five years on the current average fixed car loan in rate in the Mozo database of 6.76%. According to the Mozo car loan repayment calculator, you’d have a monthly repayment of $591 and your total interest paid would hit $5,439.
Now let’s say you instead opted for the loans.com.au Green Car Loan which has a fixed interest rate of 4.19% (4.73% comparison rate*). On the same terms, your monthly repayments would drop by $36 to $555 and the total interest paid to $3,304 - saving you a whopping $2,135 in interest!
And according to loans.com.au Managing Director, Marie Mortimer, what’s classified as a ‘green car’ is a bit more flexible than you might think.
“We know that many people aren’t ready to buy an electric or a hybrid car so we don’t require that to get our green car discount. To qualify for an ultra-low rate, a car just needs to have low carbon dioxide emissions for a vehicle of its size,” she said.
“Vehicles on our qualifying list come in all shapes and sizes including dual-cab utes, family sedans and small hatchbacks. More than 100 models from 23 car makers qualify!”
So if you’re not ready to pick up an electric vehicle just yet, check out our full review of the loans.com.au Green Car Loan or head over to our car loan comparison tool to compare other green car loans.
*The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may inﬂuence the cost of the loan.