Australians bought a record number of new cars in 2025, favouring SUVs and utes while showing a strong appetite for hybrids. EV sales also grew, and while Toyota led the field and Ford Ranger was the best seller, BYD and other Chinese brands are rising fast.
Car Loans
Buying an electric car with finance: what to know
Green loans for electric vehicles (EVs), plug-in hybrids (PHEV) and hybrids often come with incentives, such as lower interest rates. Find out more in this guide.
Electric vehicles are no longer a niche choice. As more Australians weigh up the switch, many are also asking whether financing an EV works any differently to financing a petrol or diesel car.
For most buyers, taking out a car loan for an EV works much the same way as financing a petrol or diesel car. The main differences tend to come down to the loan products on offer, the vehicle’s purchase price and how the total cost of ownership compares over time.
Here’s what to keep in mind when comparing car loans for an EV or hybrid, and the broader ownership costs that can come with making the switch.
More: Research and compare different cars on sale in Australia
How EV car loans work
Some lenders offer green car loans that have competitive interest rates for eligible EV buyers. But as with any loan, rates, fees, features and approval criteria can vary, so it pays to compare the full cost of borrowing, not just the headline rate.
“One of the practical differences with EVs is that buyers may be borrowing against a higher purchase price, so even a small difference in rate or loan term can have a noticeable effect on repayments,” explains Carlos Gasser, General Manager at RACV Finance.
“That’s why it’s worth looking at how the loan is structured overall, including the term and what the repayments look like over time, rather than comparing products on rate alone.”
Some employees may also look at novated leasing, when employer arrangements or tax settings are relevant. But for most people comparing day-to-day borrowing options, the key things to focus on are still the car loan’s rate, fees, repayment structure and overall cost.
EV vs petrol running costs
The purchase price is only part of the picture. When comparing an EV with a petrol vehicle, it also helps to look at the broader cost of ownership, including finance, charging or fuel, servicing, insurance and depreciation.
Running costs can be one of the bigger differences between an EV and a petrol car. For some drivers, charging at home may cost less than filling up with fuel, while households with rooftop solar may be able to reduce those costs further.
How much difference that makes will still depend on electricity prices, charging habits, vehicle efficiency and where the car is charged.
“Those ongoing costs can also shape how much buyers feel comfortable borrowing in the first place,” says Gasser. “If you have a clearer view of what the car may cost to run, it can be easier to judge what loan repayments are realistic for your budget.”
Servicing can be different, too. Some EVs may have fewer routine maintenance needs than comparable petrol or diesel models, but schedules and costs still vary from one manufacturer and model to the next.
More: EV insurance in Australia: costs, coverage and what you need to know
Incentives and rebates
EV incentives and tax settings can shift over time, so it’s a good idea to check the latest federal and state or territory rules before you buy. Depending on the vehicle and the way it’s financed, that could include tax thresholds, exemptions or rebates.
More: Electric vehicle rebates, discounts and incentives in Australia
How to compare car loans for an EV
If you’re planning to buy an EV with a car loan, start by working out how much you can comfortably borrow and repay. From there, compare lenders on more than just the advertised rate, including fees, loan term, balloon payments, repayment flexibility and any conditions attached to the product.
It also helps to look at the full cost of the loan over time, not just the monthly repayment. Checking fees, total repayments, eligibility criteria and whether pre-approval is available can make it easier to compare your options before you commit. As always, final approval will depend on the lender’s assessment and terms.
EV ownership costs
If you want to get a clearer picture of the numbers, comparison tools such as RACV’s Car Match can help you weigh the ownership costs of an EV against a petrol vehicle across different models.
Used alongside car loan comparisons, that can give you a more complete sense of what the vehicle may cost to own and finance over time. Any loan repayment figures should be treated as indicative only and checked against a lender’s current rates, fees, terms and approval criteria.
More: How to calculate your car loan repayments
Ready to start your car buying journey?
- Compare cars with Car Match to see estimated ownership and running costs across electric, hybrid and petrol models.
- Get your personalised loan rate to understand what finance options may be available to you.
- Explore RACV Car Loans to learn about different loan types, features and eligibility.
- Essential car-buying advice to help plan your purchase and budget with confidence.
- The latest car reviews from RACV experts to compare real‑world performance and ownership insights.
R.A.C.V. Finance Limited ABN 82 004 292 291 Australian Credit Licence No. 391488. RACV Finance is subject to RACV lending criteria. Conditions, fees and charges apply.
Advice given in this article is general in nature and is not intended to influence readers’ decisions about financial products. You should always seek your own professional advice that takes into account your own personal circumstances before making financial decisions.
