What Are Green Auto Loans?

Financing a clean-energy vehicle works much like financing any other car. Whether you’re purchasing an electric vehicle (EV), plug-in hybrid vehicle (PHEV), or another vehicle that uses alternative fuel technology, a lender will evaluate factors such as your credit history, income, and overall financial profile when determining loan eligibility and terms. The loan process generally works the same as financing other vehicle types. Individuals apply through a lender, who will make a loan offer based on criteria that typically include the applicant’s credit score and proof of employment. If approved, the applicant chooses a repayment plan that determines the vehicle’s monthly payment.

Clean-energy cars, which are often referred to as green-energy cars, are powered by alternative fuels or technology that differs from vehicles that require fueling at the pump. While many clean-energy vehicles are electric, some can also be powered by hydrogen fuel cells, biofuels, and other alternative energy sources.

Although federal tax credits for most new electric vehicle purchases have ended, there may still be opportunities to save through state, local, and utility-sponsored incentive programs. If you're considering an electric or plug-in hybrid vehicle, take time to explore the rebates, incentives, and financing options available in your area to help make your purchase more affordable.

Because incentives for clean-energy vehicles can change over time, it's important to research current offers before making a purchase. Depending on where you live, you may be eligible for state, local, utility, or manufacturer-sponsored rebates and incentives that can help reduce the overall cost of ownership.

Financing an Electric Vehicle

As with any vehicle purchase, the best financing option is one that meets your financial needs and long-term budget. If you have a good credit score, a sizable down payment or trade-in, discretionary income, or other financial flexibility, you may want to consider a shorter loan term, which can result in lower interest costs over the life of the loan.

On the other hand, if keeping monthly payments manageable is your priority, a longer loan term may be a better fit. This approach can help free up room in your budget for other expenses such as housing, groceries, utilities, and everyday costs. 

Electric Car Monthly Payments

When financing an electric vehicle, loan terms can vary by lender and borrower qualifications. Longer loan terms may help lower monthly payments, while shorter terms can reduce the amount of interest paid over the life of the loan. Most standard auto loans range from 60 to 72 months, although some lenders may offer longer repayment periods. Your credit score, loan amount, down payment, and other factors will all influence the terms and options available to you. Want to know how much your electric car monthly payment would be with our credit union? Use the loan calculator to estimate your monthly payments. 

Financing Your Next Vehicle

Whether you're shopping for a new or used vehicle, including an electric or plug-in hybrid model, or looking to refinance an existing auto loan, Digital Federal Credit Union’s auto loans can help you finance your next vehicle with competitive rates, flexible terms, and a streamlined application process. Follow our three-step application process to start your auto loan application. Please note that you may submit your application without being a member of our credit union, but in order to qualify for a loan with DCU you must finalize your membership upon receiving a loan decision. 

*Source: https://www.kbb.com/car-advice/how-much-electric-car-cost/

Please note, membership is required to open any account or loan with DCU. Visit our membership eligibility page for more information.

This article is for informational purposes only. It is not intended to serve as legal, financial, investment or tax advice or indicate that a specific DCU product or service is right for you. For specific advice about your unique circumstances, you may wish to consult a financial professional.