No More Car Loans for Petrol or Diesel Vehicles, Bank Declares

Bank Australia has announced it has stopped providing car loans for petrol and diesel vehicles – including hybrids.

While the decision only affects loans for brand-new cars, Bank Australia has listed a host of environment-related reasons behind the change.

According to a statement on its website, electric vehicles generate between 29 and 41 per cent less emissions than internal-combustion vehicles – even taking into account Australia’s dependence on coal-derived electricity.

However, despite the bank’s overt support for a transition to a cleaner world, its Electric Vehicle Loan is one of the most expensive on the market, with a 6.95 per cent fixed rate per annum (6.95 per cent comparison rate).

According to Canstar, Heritage Bank and People’s Choice both offers Green Car Loans for 5.69 per cent fixed per annum (6.04 per cent comparison rate), while Bendigo Bank has a Green Secured Personal Loan for 5.49 per cent fixed per annum (6.2 per cent comparison rate).

It was mid-2022 when Bank Australia first announced it would implement the electric-car-only loans by 2025 – with the goal of the customer-owned bank to reach net zero carbon emissions by 2035.

Around the same time, Westpac became the first of the ‘big four’ banks to announce a specific Hybrid and Electric Car Loan, with favourable rates for low- and zero-emissions vehicles.

In late 2023, the Commonwealth Bank announced it had partnered with Tesla to provide loans with a fixed rate of 5.49 per cent per annum (6.92 per cent comparison rate) for a secured car loan.