From 2025, one local bank will only offer new-car loans for customers purchasing electric vehicles.
Buyers looking to finance their new car through their bank may soon be limited to electric models.
Bank Australia has announced it will be stopping loans for petrol and diesel cars from 2025, with the goal of the customer-owned bank to reach net zero carbon emissions by 2035.
The decision means customers will be limited to buying pure battery-powered vehicles, with traditional and plug-in hybrid models to be excluded from its new-car loan eligibility.
However, despite future new-car loans being limited to electric vehicles, the company’s Chief Impact Officer, Sasha Courville, says second-hand cars won’t be subject to the same guidelines.
“While we will cease car loans for new fossil fuel cars from 2025, we are deeply aware that we need to support people not yet able to afford an electric vehicle while the market grows,” Dr Courville said at the announcement.
“We’ll continue to offer loans for second-hand fossil fuel vehicles until there is a viable and thriving market for electric vehicles,” she added.
Australia’s largest non-bank lender, Pepper Money, has taken a different approach, instead incentivising the uptake of zero-emissions cars by offering 12 months of free charging.
Partnering with Evie Networks, customers will get a year of free public charging within Australia for those who finance their electric vehicles through Pepper Money.
“We want to help accelerate the switch to [electric vehicles] by removing the barriers and contribute to lasting, systematic change – from finance to infrastructure and beyond,” said Ken Spellacy, General Manager of Asset Finance at Pepper Money.
The company claims it helped to finance 11 per cent of all electric cars sold in Australia in 2021.
In June 2022, Westpac became the first of the ‘big four’ banks to launch a dedicated loan for hybrid and electric vehicles, however Drive showed there were a number of alternative financial providers offering favourable interest rates for those looking to buy low- or zero-emissions vehicles.
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