Electric vehicles are getting popular for being cost and fuel efficient. However, confusions abound about whether these vehicles are sustainable and what one should check before buying electric vehicles. It is not just the vehicle you look at; you also need to assess the finances and make a decision basis your requirements and budget.

There are differences between electric and non-electric vehicle loans when financing a vehicle. Here are some of the critical factors to keep in mind.

Vehicle Price

Electric vehicles are often more expensive upfront than non-electric vehicles, but they can offer savings in the long run with lower fuel and maintenance costs. It can affect the total loan amount you need to finance.

Interest Rates

Interest rates on electric vehicle loans may be lower than on non-electric vehicle loans, as lenders may offer lower rates to encourage customers to purchase more environmentally-friendly vehicles. However, checking different lenders and comparing their interest rates is vital to know what fits your budget. Some banks offer lower rates, while others may not have any change in interest rates offered for electric and non-electric vehicles.

Also Read: How to save money for short-term financial goals?

Loan Terms

When you apply for a loan, it is essential to understand the terms and conditions of the loan. Read the loan agreement and talk to the bank’s representatives before you go ahead with taking a vehicle loan. Electric vehicle loans may offer longer loan terms to help offset the higher upfront cost of the vehicle, which can make the monthly payments more affordable. However, a longer loan term can result in paying more interest over the life of the loan.

Insurance Rates

Insurance rates for electric vehicles can be higher than for non-electric vehicles due to the higher cost of the vehicle and the higher cost of repairing or replacing electric-specific components. So before going to the car showroom, you can check the insurance rates and make a decision basis your budget.

Tax Benefits

Depending on where you live and the specific electric vehicle you purchase, you may be eligible for tax benefits that can offset the higher upfront cost of an electric vehicle. Some state governments offer you tax benefits when you buy an electric car. This benefit can bring down your overall cost of buying an electric vehicle.

When deciding between an electric and non-electric vehicle loan, it’s essential to consider the long-term costs and benefits of each. If you’re still unsure which option is best for you, consider speaking with a financial advisor.

The table below helps you compare the interest rates on electric vs non-electric vehicles of some banks. You can take a decision basis your requirements.

Car Loan Interest Rates: Electric Vs Non-Electric Vehicle

Compiled by BankBazaar.com

Note: Interest rate on Car Loan for electric and non-electric vehicle for all listed (BSE) Public & Pvt Banks considered for data compilation (Excluding small finance banks); Banks for which data is not available on their website are not considered. Data collected from respective bank’s website as on 14 Feb 2023. Top Banks with the lowest interest rates on e-vehicle are listed in ascending order i.e., bank offering the lowest interest rate on electric car loan is placed at top and highest at the bottom. Lowest interest rates offered by the banks irrespective of the loan amount are shown in the table.