Going green with auto loans - Car Finance

Chances are you have heard about the global movement toward more energy-efficient initiatives. There has also been a lot of buzz about the benefits of green cars, so choosing an eco-friendly vehicle may be in store for you. If so, there are some things even in the car loan process that are different for green vehicles than regular ones.

Green car loans
One of the biggest factors driving green auto loans is the price of gasoline. Buying a car may seem like the easy part compared to keep regular expenses at the pump under control, and since hybrid and electric vehicles use significantly less gas than standard combustion engines, they take less to fill up and go farther without needing to refuel. On average, green loans apply to automobiles that get 30 mpg or better, or are considered hybrid or electric vehicles. Specific loans are available to secure these types of cars.

The great part for those with car loans on such vehicles is that it is much easier to afford monthly payments when other ownership expenses are not taking as much to fulfill. These cars also qualify for special insurance and tax breaks, making them even more cost-effective to own.

Going green with lending
The other upside to auto loans for green cars is that they tend to have lower rates than those for standard vehicles. Bankrate wrote that the terms for such notes get between 0.5 and 1 percent interest deductions, since these kinds of loans benefit both the environment and the lender. Lenders that offer green loans may gain a reputation for doing so, which can bolster their business, so they may be more willing to approve a loan for an eco-friendly car even if the borrow has less than perfect credit.

Getting a car loan for an alternative fuel vehicle provides drivers the opportunity to save money in a number of ways. Plus, the current economic environment is favorable for borrowers, making it a good time for those with bad credit to apply. Bankrate said that Millenial generation consumers, those in their 20s and early 30s, prefer these kinds of loans for their civic-mindedness as well as the fact they have mandatory fixed rates. That way, saving money and planning for regular installment payments is easier.

Source: http://carfinance.com/going-green-with-auto-loans/

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