Rising fuel costs and global warming are enough reasons to go green with your ride. If you are one of a rising number of Aussies ready to invest in a new car with less environmental impact, here’s a quick guide.

What is a green car & how does it work?

A green car is a vehicle that produces minimal to zero emissions. It utilises renewable energy sources or a fuel-efficient engine to minimise negative environmental impact. A green car also runs more quietly compared to a regular gas or diesel-engine vehicle. It also contributes to lowering the noise pollution in major cities in Australia.

Economically speaking, green cars are also beneficial to their owners in the long run because they consume less petrol and, in some vehicles, none at all.

Different types of green cars

To buy the right green car for you, first learn the three different types: Fuel-efficient cars, hybrid vehicles, and electric cars.

Fuel-Efficient Car

A fuel-efficient car uses numerous new automotive technologies to consume petrol efficiently without emitting a large amount of carbon dioxide and other pollutants in the air. Some of these technologies include engines with high efficiency, mechanisms for efficient changing of gear, automatic gearing, energy-saving brake systems, and light bodyweight.

According to CarsGuide, some of the most fuel-efficient petrol cars in Australia are Audi A1, Skoda Fabia, Peugeot 308 Diesel, Mazda MX-5, and RAV4 GX.


Meanwhile, hybrid cars pair the combustion engine with an electric motor, which is powered by a traction battery. It uses less fuel compared to combustion engine vehicles and therefore, produces fewer emissions.

Most hybrid cars also have a regenerative braking technology that recharges the batteries when stopping or slowing down, enabling them to save more fuel and electricity.

There are currently four types of hybrid car in Australia:

  1. Parallel Hybrid – The electric motor supports the petrol engine. Honda Civic Hybrid is a good example
  2. Series-Parallel Hybrid – The electric motor is capable of propelling the car solely. A popular series-parallel hybrid is Toyota Prius.
  3. Series Hybrid – The electric motor mostly runs the vehicle while the petrol engine recharges the battery. Holden Volt is the only series hybrid available in Australia.
  4. Plug-in Hybrid – Either a parallel or series hybrid with the capability to recharge the battery by plugging it to an external power source. The top-selling plug-in hybrid for 2018 in Australia is Mitsubishi Outlander PHEV.

Electric Vehicle

The last type of green car is an electric vehicle. Unlike hybrid cars, it runs on electricity alone, making it the most environmentally-friendly vehicle of all. Currently, there is a limited number of pure electric models available for Aussies. For this reason, plus the fact that they are more expensive compared to hybrids, fewer electric cars are running on the roads.

The cheapest electric cars you buy right now include Hyundai Ioniq, Renault Zoe, Nissan Leaf, and Tesla Model 3.

Pros and Cons

As the type of green car becomes more electric, the more it becomes eco-friendly, the more it runs quietly, and the more it saves fuel. Also, since electric cars have the fewest moving parts of all, they require the least servicing and maintenance.

However, the greener the car is, the more expensive it becomes as well. In terms of kilometres, electric cars can cover a shorter distance on a fully-charged battery compared to a fuel efficient car on a full-tank. And as mentioned earlier, there’s only a few numbers of pure electric vehicle that you can choose from right now, while hybrids and fuel-efficient cars have a wide variety of models.

What to consider before buying

With the pros and cons of each type of green car in mind, you can buy the right green car for yourself by considering the following:


How you’ll put the green car into use will greatly determine what you’ll buy. Is it just for travelling to work and back home? Or for traversing long distances with occasional off-road adventures?

Remember that electric cars only have a limited range (maximum 200 kilometres) and are, therefore, more ideal for city driving. Recharging it will not be a problem since you’ll be going home daily. But if you’re travelling long-distance, you’ll do better with a hybrid or a fuel-efficient car, which can cover more kilometres.

There will come a time when Australia is fully installed with electric charging stations and travelling long distances with electric cars is easy. But right now, petrol stations are more frequent, which makes petrol cars more equipped for longer travels.


You also need to consider the upfront cost of buying a green car. Currently, there are only two electric cars in the market that you can buy for under $50,000. That’s how expensive an electric car can get. Hybrids, you can purchase starting at $25,000; while fuel-efficient cars sell the cheapest at $15,000.

On top of these prices, you’ll also have to pay for stamp duty, car insurance, registration fees, and car loan processing fees. Hence, you must evaluate your finances carefully to determine your budget and based on it, you can find out which type of green car you can afford.

Fuel and Maintenance Cost

If you want to buy the right green car, you also must consider the operating costs for the vehicle, particularly the fuel and maintenance costs. Although a fuel-efficient car has a cheaper upfront price, it can cost you more money on petrol and maintenance in the long run compared to an electric car.

Investing in an electric car may be a wise decision despite its price if you look at the current increasing trend in fuel prices.

Green Car Loan at CarFinance

The right green car for you really depends on your preference and this information will help you make an informed decision. Most people would buy a fuel-efficient car for its cheapness and ability to travel longer, while some would go for an electric car to produce zero emissions and save money in the long run. If you want to experience both worlds, then perhaps, a hybrid car suits you best.

Whichever you prefer, CarFinance can help you buy it with our green car loan products. We offer a pre-approval on car financing that will give you confidence and bargaining power at the dealerships.

Call CarFinance today on 1300 889 669 or apply online to enjoy our competitive rates and finally get the new green car that you wanted.