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Lenders offering better deals for electric cars as end of petrol cars in sight

Less than eight years from now, the sale of new petrol and diesel cars will be banned in at least nine countries.

A further 10 nations, including China and Japan, will join them by 2035.

By 2040, experts say, new petrol cars will be significantly harder to find around the world as manufacturers face increasing pressure to stop production.

In the face of these depreciating assets, some financial institutions are withdrawing from the traditional car market to only offer electric and hybrid car loans.

Others offer significant discounts for loans on low- or no-emission cars.

More than 20 Australian lenders, including Westpac, Macquarie and RACQ, now offer lower rates for loans on electric vehicles, including discounts of more than one percentage point in some cases.

Bank Australia took the trend one step further this year, announcing it would no longer offer car loans for new petrol, diesel or hybrid vehicles by 2025.

The company’s impact management head, Jane Kern, says the bank created the policy after feedback from its customers and considerations of the vehicle market and its climate impact:

We think supporting customers to buy electric vehicles makes a lot of sense, both financially, because of the running cost of electric vehicles, but also because of the future vehicle value.

Kern adds that reaction to the bank’s announcement has been largely positive and she hopes other financial institutions will follow its lead.

Swinburne University professor Hussein Dia says despite Australia’s slow uptake of electric vehicles, there is soaring interest in the technology and a growing acceptance petrol and diesel vehicles will soon be phased out:

Many people recognise today that their investment in petrol vehicles [will depreciate].

In 10 to 15 years’ time, even if someone wanted to buy a petrol vehicle, I don’t think they would be able to find a new one on the market because car manufacturers are under a lot of pressure to stop producing and selling petrol and diesel vehicles.

China, India, the UK, France: there is a long list of countries that have policies in place to ban the production and sale of petrol vehicles by 2030 to 2040.

– AAP