Financing your green car is easy and can even be profitable. More banks and credit unions are offering interest rate breaks of at least 0.25 percent for loans on fuel-efficient cars.
"When shopping for a green car loan, check with your bank or credit union first," says Armaan Almeida, the automotive editor at CarsDirect.com. "Get at least three loan quotes. Rates will vary substantially."
Hybrids, electric and even some diesel-powered cars can qualify. But definitions vary widely. At Columbia Credit Union in Vancouver, Wash., discounts for green car-loan rate discounts are up to 0.5 percent on hybrids. And Rapidcarloans.net gives 0.3 percent rate discounts on cars that get at least 30 mpg in highway mileage. There also are federal tax incentives, with parameters listed at Fueleconomy.gov.
There are other bonuses. Usually green car loans carry fewer fees and no early payment penalties.
Carefully check out the loan terms to determine how the green car loan compares with one for regular cars. "If it's not significant, you want to re-evaluate it," says Almeida.