Electric Car Finance

How financing an electric car works

Electric car finance works much the same as financing a petrol or diesel vehicle. You borrow an amount, the vehicle usually acts as security for the loan, and you repay it with interest over an agreed term. Most lenders finance electric vehicles through a standard secured car loan, though some offer green car loans with rate discounts for vehicles that meet certain environmental criteria. Whether an electric vehicle qualifies for a green loan depends on the lender and its eligibility list.

What lenders typically look at

• Your income, employment status and living expenses.
• Your credit history and existing debts.
• The purchase price of the vehicle and your deposit or trade-in value.
• The loan amount and term you are considering.
• The age of the vehicle, which matters more for used electric cars.
• Whether the vehicle meets the lender's criteria, including for any green loan discount.

Things to keep in mind

Electric vehicles often have a higher purchase price than comparable petrol cars, so the amount you need to borrow may be larger. Battery warranty terms vary between manufacturers and can affect the longer term value of a used electric car, so it is worth checking the warranty before buying. Charging options also matter: home charging is typically the cheapest way to run an electric car, while public fast charging usually costs more. Some states and territories offer incentives such as stamp duty concessions on electric vehicles, and these change over time. Running costs, insurance and resale values can all differ from petrol vehicles, so it is worth comparing the total cost of ownership rather than the purchase price alone.

New versus used electric cars

New electric cars usually come with a full battery warranty and the latest technology, but cost more upfront. Used electric cars can be more affordable, though lenders may apply stricter age limits on older vehicles, and battery condition becomes an important consideration. Having the battery health checked before buying a used electric car can help you understand what you are purchasing.