Starting in 2025, a local bank will only offer new car loans to customers who buy electric vehicles.
Buyers looking to finance their new car through your bank may be soon limited to electric models.
Bank Australia has announced it will suspend loans for petrol and diesel cars from 2025, with the customer-owned bank aiming to achieve net zero carbon emissions by 2035.
The decision means customers will be limited to purchasing battery-only vehicles, with traditional and plug-in hybrid models excluded from their eligibility for new car loans.
However, even though future new car loans are limited to electric vehicles, the company’s chief impact officer, Sasha Courville, says second-hand cars won’t be subject to the same guidelines.
“Although we will suspend loans for new fossil fuel cars from 2025, we are very conscious that we must support people who cannot yet afford an electric vehicle while the market grows,” said Dr. Courville in the announcement.
“We will continue to offer loans for second-hand fossil fuel vehicles until there is a viable and thriving market for electric vehicles,” he added.
Australia’s largest non-bank lender, Pepper Money, has taken a different approach, instead incentivizing the adoption of zero-emission cars by offering 12 months of free charging.
By 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 change to [electric vehicles] removing barriers and contributing to systemic and lasting change, from finance to infrastructure and beyond,” said Ken Spellacy, General Manager of Asset Finance at Pepper Money.
The company claims it helped 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 Ride showed that there were a number of alternative finance providers offering favorable interest rates for those looking to purchase low or zero emission vehicles.