Login
ISCOVER
Data from a major bank has revealed a significant increase in the number of hybrid and EV new car loans for young borrowers.
The Commonwealth Bank of Australia (CBA) has released data showing a spike in the number of young Australians seeking finance for “sustainable vehicles”, such as hybrid and electric vehicles (EVs).
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
According to CBA, demand for new car loans for hybrid cars and EVs from borrowers under the age of 35 rose 117 per cent during the first six months of 2024, compared to the same period in 2023.
CBA data showed a significant increase in the number of hybrid and EV new car loans for borrowers aged 24–34 (up 111 per cent), while also noting a 30 per cent year-on-year increase for borrowers aged 35–49.
Joel Larsen, CommBank’s general manager of personal lending, said the result was driven in part by supply-side relief and pricing.
“We are now seeing more and more manufacturers enter the low emissions vehicle market in Australia and this additional supply is really driving down the price point,” Larsen said.
“During the second half of FY24, the average price of electric vehicles dropped by more than 7 per cent to just over $63,000 when compared to the same period last year.
“It’s good to see the price point on hybrid and electric vehicles tracking lower, as we know cost is a major concern among people on the hunt for their next car.”
Appetite for ‘green’ solutions
Demand for hybrid vehicles and EVs continues to come from different segments of the economy.
In September, CBA released small business data showing a 553 per cent increase in demand for hybrid vehicles during the financial year ending June 2024, while finance for electric vehicles was up 254 per cent.
During this period, many non-bank lenders such as Pepper Money and Metro have also worked to provide solutions that will meet this demand for “sustainable” products.
Earlier this year, senior mortgage broker at Aussie Home Loans Southbank Victoria, Sabin Sthapit, told The Adviser he’d observed many clients “asking about EV purchase costs and running costs”.
“This is mainly because of the rise of fuel prices,” Sthapit said.
“If you compare two cars with monthly expenses including repayments, you will save money buying a slightly more expensive EV when you add together fuel, repayments and regular engine maintenance.”
[Related: Finance brokers observe increased demand for EV loans]
JOIN THE DISCUSSION