We are facing a global warming crisis duel largely to the impacts of transportation. Governments around the world are slowly making a more concerted effort to ensure that their residents are financially encouraged to go green. There are currently a number of financial institutions offering ‘green’ loans specifically targeted at those looking for new ways to finance their next car purchase and offset the CO2 emissions created from use of their vehicle by buying a green car.
How green car loans work
Green financial institutions will offer those using their products the opportunity to offset the emissions that they are producing with their new vehicle. This offset is achieved by growing trees or other plants in sufficiently large numbers so that, in effect, the cars purchased with the loans become ‘carbon neutral’.
Not only are these loans excellent for the environment, but they also make good financial sense and are likely to become even more cost-effective as time goes on. Companies offering green loans have extremely strict criteria that must be met in order for the vehicle to become eligible. These typically include a maximum age for the car, a minimum level of efficiency on a city cycle and maximum emission levels. Furthermore, the duration of the loan is rarely for more than five to seven years, in order to ensure that vehicles remain efficient and environmentally friendly over the long term.
Choosing the right green car loan
As with all types of loans, terms and rates vary dramatically between suppliers and green car loans are no different, so it is important to make sure that compare car loans for your needs. Issues that should be considered when looking to buy a green car on finance include factors such as how long the loan will be valid for and whether the car has to ‘prove’ that it is environmentally friendly at regular intervals through inspections. It is also important to find out exactly how much the loan is going to cost you and to compare this with a standard loan.
Although many people will opt for a green loan mainly for environmental reasons, in many cases a green loan is chosen simply because it is the most economically viable way of financing a large purchase. Before entering into a green loan, it pays to consider carefully why exactly you want this type of loan. For example, is it primarily for the sake of the environment or for your pocket? Be honest with yourself as this decision is fundamental to your choice of provider.
It is also worth bearing in mind that although many financial companies offer green loans, there are also numerous ‘not for profit’ organisations offering similar services that may offer an attractive financial option for those looking to finance a green car. As well as favourable loan terms, there are also many government initiatives worldwide that encourage drivers to look at the greener options such as Australian governments’ Green Vehicle guide.
Going green – The way forward
Going green is bound to be a good long term way of ensuring that you get the best financial deal. As the environmental crisis deepens and governments become more concerned, the incentives to go green are set to keep rolling out for years to come!