Green Car and EV Loans in Australia
ADS Team
Author
August 10, 2026
3 months ago
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In short: Several Australian lenders offer a discounted rate - commonly 0.5 to 1.5 percentage points below their standard car loan - for electric and low-emission vehicles. The discount is real, but for an employee it is usually beaten by a novated lease on an eligible EV, because that removes FBT rather than shaving the interest rate.
Key takeaways
- Green car loan discounts typically run 0.5-1.5 points below standard rates.
- Eligibility is usually tied to emissions thresholds or an approved vehicle list.
- For employees, an FBT-exempt novated lease usually beats a discounted loan.
- Factor in charging installation - often $1,000-$2,500 - when comparing.
What the discount is worth
On a $60,000 vehicle over 5 years:
| Rate | Monthly | Total interest |
|---|---|---|
| Standard 8.5% | $1,231 | $13,860 |
| Green 7.25% | $1,195 | $11,700 |
| Saving | $36/mo | $2,160 |
Qualifying
Criteria vary by lender but usually rest on one of:
- Battery electric or plug-in hybrid drivetrain
- An emissions threshold in grams of CO2 per kilometre
- An approved vehicle list maintained by the lender
Some lenders extend green rates to solar, batteries and home efficiency upgrades under the same product family.
The costs people forget
- Home charger installation - typically $1,000-$2,500 including electrical work.
- Insurance, which can be higher on EVs due to repair costs.
- Resale uncertainty - the used EV market is still maturing, and residual values are less predictable than for established petrol models.
Frequently asked questions
Is a green loan better than a novated lease?
For an employee whose workplace offers salary packaging and where the vehicle qualifies for the FBT exemption, the novated lease is usually well ahead. For a sole trader or someone without access to packaging, the green loan is the practical option.
Do hybrids qualify?
Plug-in hybrids often do; conventional hybrids frequently do not. It depends on the lender's emissions threshold or approved list.
Can I finance the charger too?
Some lenders allow the charger and installation to be included in the loan. Otherwise a green personal loan or adding it to a mortgage redraw are the alternatives.
Related reading
- Novated Leases Explained
- Car Loans: Dealer Finance vs Bank vs Broker
- Personal Loans: Secured vs Unsecured
Sources
- Fringe benefits tax - electric cars exemption — Australian Taxation Office
- Electric vehicles — Australian Government Department of Climate Change, Energy, the Environment and Water
Rates checked as at 2 September 2026. Interest rates, lender policies and government schemes change frequently. Figures in this article are illustrative and were accurate at the date shown.
General advice warning: This article contains general information only. It does not take into account your objectives, financial situation or needs, and it is not personal credit or financial advice. Consider whether it is appropriate for you and seek advice from a licensed credit representative before acting.
Any interest rate shown is an example only and is not an offer of credit. Where a rate is quoted, the applicable comparison rate is available from the relevant lender and should be considered alongside it.
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