Hybrid Car Loans in New Zealand: Finance Your Eco-Friendly Drive

A car plugged in for charging

Hybrid vehicles are becoming increasingly popular among New Zealand motorists.

 

At the end of 2024, there were more than 300,000 registered in New Zealand, up from fewer than 15,000 ten years earlier.

 

With lower fuel consumption and fewer carbon emissions, they can be a good option for your budget and for the planet.

 

But what do you need to know when it comes to getting a loan for one?

 

Here’s a 101 on how it works.

 

What is a hybrid car loan?

 

A hybrid car loan is a loan that you take out to pay for the purchase of a hybrid vehicle.

 

You borrow a set amount of money and pay it back, plus interest and fees, over a set period of time.

 

Usually, these loans will be secured against the vehicle itself. This means that the lender can sell your car if you do not repay your loan.

 

You may be able to access a lower interest rate because there is less risk for the lender.

 

Key benefits of financing a hybrid car

 

There are lots of reasons why it may make sense to take out a loan to purchase your hybrid vehicle.

 

Your hybrid may well have lower running costs than a fully petrol or diesel vehicle.

 

Spreading the cost of the purchase through a loan may be easier on your cashflow  - all while you’re getting the benefit of lower fuel costs.

 

Sometimes you may be able to access lower interest rates or special offers for eco-friendly vehicles.

 

What do lenders look for?

 

When a lender is assessing your application, a few different things will be taken into account.

 

Your credit score and financial health

 

The better your credit, the easier it may be to get a loan. It’s helpful if you can show that you’re on top of your financial life, keeping up with your obligations and not falling behind on any payments.

 

Employment status and proof of income

 

You’ll also need to show that you have sufficient income with which to repay the loan. If you’re employed, that might be evidence of your pay being directly credited to your bank account, or you might show financial statements if you’re in business for yourself.

 

Deposit

 

Some lenders require a deposit. We can help you work out whether this is likely to be the case for you.

 

Vehicle eligibility

 

Lenders need to feel comfortable with the vehicle you’re taking a loan to buy, particularly if the loan will be secured against it.

 

Step-by-step guide: Applying for a hybrid car loan

 

Here are a few steps to work through if you’re thinking about applying for a loan.

 

Gather necessary documentation

 

Getting your information together at the outset can make the process smoother. This might include collating your proof of income, identification and proof of address.

 

Get pre-approved for faster dealership negotiations

 

We can help you apply for preapproval, which gives you confidence about what you’ll be able to borrow. This means you’re in a strong position when it comes time to talk to a car dealer about a vehicle.

 

Finalise the loan and purchase your hybrid car

 

Once you know which vehicle you want to buy, we can help you get the loan in place and have you on the road in no time.

 

Tips for getting the best hybrid car loan deal

 

You may be able to give yourself a step up towards your car loan in a few different ways.

 

Improve your credit score before applying

 

If your credit score could use some improvement, you might like to attend to this before you put in your loan application. You could do this by making sure all your bill payments and other financial obligations are made on time.

 

Consider the total cost of ownership, not just repayments

 

When you’re repaying your loan, you’ll also pay interest and fees. Understanding these at the outset will give you a good understanding of what your new vehicle will cost overall.

 

Negotiate the car price

 

One way to save money on your vehicle is usually to get a good price when you’re at the point of purchasing it. See if you can shop around for a great deal, or ask a dealer whether there’s room to negotiate. If they won’t move on price, sometimes they may include extras at no additional cost to you.

 

Common pitfalls to avoid

 

As with all borrowing, there can be situations where things don’t quite go to plan.

 

Make sure that you’re comfortable with the amount you’re borrowing. Your lender won’t give you more than they have assessed you could afford, but it’s important that you feel that you can fit the repayments into your budget, too.

 

Understand any fees that might be involved, including at the application stage or in situations where you might want to make changes to your loan or repay it early.

 

Ready to snap up a hybrid?

 

If you’re ready to go car shopping, get in touch with the team at better finance™. We can answer any questions you have at any stage of the process.

 

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.