Car Loans in Canada for Hybrid or All-Electric Vehicles
There’s a seismic shift underway in the Canadian world on wheels. Slowly but surely Canada is turning away from pollutive fossil fuels, looking more closely at hybrid and electric options.
Keeping pace with this trend, banks, credit unions, manufacturers, and dealerships (both online and bricks-and-mortar businesses) offer auto financing, despite these vehicles often being more expensive than their fossil-fuelled counterparts. Each of these outlets offers a range of options (larger amounts or longer terms) to cover the purchase prices for hybrid and electric cars.
Getting the Best Financing Deal while Preserving the Environment
Across the entire automotive market, rising prices have been forcing lenders to adapt to their auto financing schemes to needs. Here are a few ways of getting the best on a hybrid electric car, no matter whether it’s new or second-hand:
- longer auto loans mean easier monthly payments, particularly when stretched over a whopping 96 months;
- larger down payments up the chances of approval for your car loan application, especially if you put down significantly more than the usual 10% – 20%, and with less to repay over the coming years as well;
- trading in your old car is a quick and easy way of fast-tracking your auto loan approval, with lower costs down the line.
Hot tip: always check for subsidies, as local governments sometimes offer credits for electric vehicles. For instance, Ontario’s Plug ‘n Drive Program offers attractive incentives of CAD 1,000 on purchases of used electric vehicles. EV drivers applying for this Used EV Incentive can also sign up for the Scrappage Incentive when recycling their old fossil-fuelled vehicles. Most dealerships apply these government incentives at the time of purchase.
Some banks – including the RBC – offer special rates on auto financing for EV vehicles made by partner manufacturers such as Chevrolet, Chrysler, Hyundai, Kia, and Tesla. Another budget-friendly alternative is to sign up for the RBC Energy Vehicle Program.
EV Pros and Cons for Auto Loan Applicants
Once their car financing is approved, eager buyers must pick their new wheels. And they are looking at alternative fuels with steadily increasing interest, while the popularity of traditional combustion engines has fallen by almost a quarter.
Well over a third of surveyed consumers said they would like a hybrid as their next vehicle, with half that number up to for all-electric models. For the moment, it looks as though consumers are planning to hedge their bets through hybrid electric vehicles, keeping one foot in the fossil fuel world, while stepping into an electric future.
However, buyers still have two main concerns about hybrid and electric cars: affordability and range. Here’s why:
- A recent (2021) automotive consumer study of almost 1000 adult residents in Ontario found that 76% of buyers intending to purchase an electric vehicle expect to pay less than $ 50,000. At well over twice that price, Tesla’s X is way beyond their reach, but the Nissan Leaf and Volkswagen e-Golf fall well within these budget guidelines.
- For daily commutes, per-charge ranges that vary from 250 to 350 kilometres are quite adequate. In fact, 80% of consumers looking for an EV would treat it like their smartphones, charging it overnight at home. However, on the trips, the hybrid option offers greater peace of mind, at least until charging stations are as commonplace as gas pumps.
Car Loans Underpin Canada’s Future on the EV Market
Infrastructure projects are moving in the same planet-preserving direction. Opened in late 2019, Canada’s first electric vehicle fast-charge network – Petro-Canada’s Electric Highway – now runs coast to coast, with high-speed chargers every 250 kilometres or less between Victoria, BC, and Halifax NS.
There seems little doubt that these alternative fuels are the path towards a sustainable future. As the technology progresses, streamlining-assembly costs and lowering market prices, auto financing paves the way for all Canadians to access this environmentally-friendly technology.
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