If you’re thinking of getting a green vehicle, now is the perfect time to do it. With most businesses shifting their focus to sustainability, the number of green options available to consumers has skyrocketed. Regardless of recent events, green cars aren’t the cheapest type of vehicle around. To afford one will mean taking out a green auto loan from a reliable lender.
Below, you’ll find details on everything you need to know about applying for a car loan for your first electric car.
What are green auto loans?
You’ll find an endless number of auto financing options available on the market today. The latest and possibly the most overlooked are green auto loans.
Green auto loans are available to people who plan on purchasing green cars or vehicles with fewer emissions. Vehicles that fall under the green category are often electric or hybrid. Today’s most popular manufacturers of eco-friendly vehicles are Tesla, Ford, and Nissan.
Green auto loan lenders encourage people to participate in the green auto movement by offering the best auto loan rates, payment term extensions, and discounts on interest rates. This makes taking out a loan more economical for borrowers.
What passes for a green vehicle?
Vehicles that are generally better for the environment are considered green vehicles. These cars use alternative sources of energy to power their functions. Typically, these include electric, solar, or hybrid electric/diesel cars.
To identify a green vehicle, look for its SmartWay designation.
SmartWay is a program headed by the U.S. Environmental Protection Agency (EPA) to help drivers reduce transportation-related emissions. Most lenders use a green vehicle’s SmartWay designation to determine whether it’s available for a green auto loan.
Green loans vs. regular loans: What’s the difference?
In terms of function, green loans and regular loans are generally the same. They’re a financing option that buyers can tap into to afford services they can’t pay for upfront. The process of getting a green loan and a regular loan also goes quite similarly.
- You gather your requirements and send your application to the lender.
- The lender processes your application and sends you an offer based on your credit score.
- You choose a repayment term that’s suitable for your budget.
- You make sure that you don’t miss any payments; otherwise, you may lose credibility and your car.
The great thing about green loans is that they usually come with lower interest rates. Yet, since green vehicles also tend to be much more expensive compared to regular vehicles, it may take a while to pay back the difference. Keep that in mind when you’re deciding between getting a regular or green vehicle.
Where can you find green auto loans?
Although they are new to the market, there are about a dozen green auto loan providers in the U.S. Here are some of the best green auto loan providers today:
LightStream is currently one of the best lenders for anyone looking for green auto loans. They offer same-day approval on loans, even for new borrowers. Plus, they have various loan packages for borrowers with exceptional credit scores.
Repayment terms last around 36, 48, or 72 months—even longer for those with healthy credit histories. The interest rates are also minimal compared to other lenders, ranging between 2.49% to 4.69% annually.
Green Light Auto Credit
For borrowers with a not-so-healthy credit score, Green Light Auto Credit is a great company to get your auto loans from. They offer services across the United States and have the fastest approval process—unlike regular bank loans. You simply send your application, wait for confirmation, and everything else should be smooth sailing from there.
This company offers both regular and green auto loans. They offer some of the best loan rates in the market; they also go the extra mile for their customers by helping them find rates that fit their budget and needs.
PlugStar is yet another excellent green loan lender. The one thing that sets them apart is that they provide their customers with a rough list of estimates, incentives, local partners, and more from the very first step of the process. This allows you to assess your needs better and adjust your budget accordingly.
Buying a car, whether second-hand or brand new, is a huge step forward for any person. You need to be ready both financially and emotionally to carry the responsibility of car ownership. Green vehicles are some of the best investments you can make today. Not only is it a much more sustainable option for transportation, but it also saves you a ton of money in terms of gas, maintenance, and loan interest.
Green auto loans offer much more affordable rates to borrowers. This makes payments more manageable for clients. Since green vehicles are much more expensive compared to regular cars, car loans may last longer too. Before getting a green auto loan, think about whether you can maintain monthly payments for a term of 3 to 7 years—which is the typical loan term of most companies. Financial stability shouldn’t be sacrificed for a fancy, new toy.