How to buy an eco-friendly car

Environmentally friendly cars can cut your carbon footprint, offering a reliable alternative to traditional gas guzzlers that rely on polluting fossil fuels. And thanks to the ever-increasing demand for eco-friendly cars, it’s easier than ever to buy a hybrid or electric car in Canada. Find out more about how you can find the car you want at a price that suits your budget.

How can I finance an eco-friendly car?

If you’ve decided on going green but aren’t sure how you can finance your car purchase, you have the following options.

• Car loan. You can take out a car loan for an eco-friendly car and some lenders may even give you a lower interest rate when you buy a hybrid or electric car in Canada.
• Home equity loan. If you’ve built up enough equity in your home, you could use that money to finance your eco-friendly car. Just be aware that your house will be used as collateral to secure your loan.
• Unsecured personal loan. If you have good credit, you may be able to finance your eco-friendly car with an unsecured personal loan. This means you won’t need to use your new vehicle as collateral to secure your loan.
• Secured personal loan. If your credit is not as good, you may be able to use assets like your investments to secure your loan. This will usually help you get lower interest rates as well.

Browse financing options for an eco-friendly car

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Name	Product	Loan Amount	Interest Rate	Loan Term	Min. Credit Score	Requirements	Table description
CarsFast Car Loans		$500 - $75,000	4.90% - 29.90%	12 - 96 months	300	Min. income of $2,000 /month, 3+ months employed	Get a new or used vehicle delivered to your door.	Browse thousands of vehicles from dealers across Canada and get matched with financing that meets your needs.	Go to site More Info	Compare	loading Fetching your data...
Loans Canada Car Loans		$500 - $35,000	0% - 29.99%	3 - 96 months	300	Min. income of $1,800 /month, 3+ months employed	Compare rates from multiple lenders.	Complete a single application to get quotes from different lenders. Bad credit, CERB and EI borrowers considered.	Go to site More Info	Compare	loading Fetching your data...
AutoLoanProviders		$7,500 - $85,000	3.99% - 29.99%	12 - 96 months	300	Min. income of $1,800 /month, 1+ months employed	Available in Ontario only.	Apply online and get your new vehicle delivered to your door anywhere in Ontario free of charge. All credit scores considered.	Go to site More Info	Compare	loading Fetching your data...
Coast Capital Car Loan		$10,000 - No Max.	Varies	18 - 84 months	650	Able to service debt payment of $300/month	Competitive rates and flexible terms.	Finance new and used vehicles from one of Canada's largest credit unions. No credit union membership required. Available across Canada except SK, QC, NT, NU, YT.	Go to site More Info	Compare	loading Fetching your data...
Splash Auto Finance		$10,000 - $50,000	9.90% - 29.90%	24 - 84 months	300	Min. income of $2,200 /month, 3+ months employed	Apply with any credit score.	Get financing for a new or used car. Auto loans for borrowers with fair credit, bad credit, no credit or bankruptcy.	Go to site More Info	Compare	loading Fetching your data...
goPeer Car Loan		$1,000 - $25,000	8.00% - 31.00%	36 - 60 months	600	Min. income of $40,000 /year	P2P platform with competitive rates.	Canada's first regulated consumer peer-to-peer lending platform that connects creditworthy Canadians looking for a loan with Canadians looking to invest.	Go to site More Info	Compare	loading Fetching your data...
Carloans411 Car Loans		$500 - $50,000	1.90% - 19.99%	Up to 72 months	300	Min. income of $1,600 /month, 3+ months employed	High application approval rate.	Get connected with suitable lenders to finance your next car, van or truck. Check eligibility for this loan through LoanConnect.	Go to site More Info	Compare	loading Fetching your data...
Canada Auto Finance		$500 - $45,000	4.90% - 29.95%	3 - 96 months	300	Min. income of $1,500 /month, 3+ months employed	Get financing from partnered local lenders.	Financing for a new or used car is available for borrowers with bad credit, no credit, CERB, EI or bankruptcy.	Go to site More Info	Compare	loading Fetching your data...
LoanConnect Car Loans		$500 - $50,000	9.90% - 46.96%	3 - 120 months	550	No min. income requirement	Pre-approval in as little as 60 seconds.	Get access to 25+ lenders through this brokerage. Get your funds in as little as 24 hours.	Go to site More Info	Compare	loading Fetching your data...

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What makes a car eco-friendly?

A eco-friendly car is a car that gets more kilometres to the gallon and emits less pollutants than a conventional gas or diesel vehicle, according to the Environmental Protection Agency (EPA).

Many provinces in Canada have minimum emissions requirements, but green cars exceed the minimum threshold or cut exhaust emissions entirely. To do this, they either use electric or hybrid systems.

• What is a hybrid car?

  Hybrid vehicles use both gas and electric engines to power the car. Unlike electric cars, they don’t need to be plugged in to recharge because the operation of the gas engine creates energy that charges the battery.

• What is an electric car?

  Electric cars run solely on a rechargeable battery – no fuel is involved. They’re charged at charging points located either at home (perhaps in the garage) or in public places. Economy models may need to be recharged every night or between trips. Higher end models can last from 300km to 500km between charges.

Should I buy an electric car in Canada?

That depends on your lifestyle and budget. If you don’t mind charging up every night or a higher price tag, you could benefit from an electric car in the following ways:

• Government incentives. Depending on where you live, you may get a rebate from the government when you buy an electric car in Canada. For example, Quebec offers rebates of up to $8,000 and BC offers rebates of up to $3,000.
• No fuel costs. Since electric vehicles run without fuel, you can save tons of money on skyrocketing fuel costs in Canada.
• No requirement for routine maintenance. You won’t have to pay for oil changes or other maintenance associated with having a gas engine.

Should I buy a hybrid car?

Hybrids may be a better option if you don’t want to take the full plunge into buying an electric car. They require routine maintenance and usually come with a higher initial price tag than gas-powered cars, but they offer the following benefits:

• Government incentives. You’ll usually get a lower rebate for a hybrid car than you will for an electric car, but it’s still worth exploring in most cases.
• You can use fuel to power your car. Your engine can switch between fuel and electric, which means you aren’t completely reliant on charging stations to get around.

How much do eco-friendly cars cost?

Most environmentally-friendly cars are more expensive than gas vehicles. An electric hatchback may sell for $40,000 while a mid-size sedan hybrid might go for around $30,000. Comparable gas models for both might cost as low as $20,000. Here are a few popular electric and hybrid models.

Are eco-friendly cars more expensive?

Typically, you’ll pay between $10,000 and $20,000 more when you buy a hybrid car or buy an electric car in Canada. That said, many governments offer rebates to help you cover the costs of purchasing an eco-friendly car.

You’ll save a significant amount of money on gas when you have a hybrid or electric car. With an electric car, you’ll also save on routine engine maintenance since you won’t need to change your oil or other consumables.

What’s the most fuel-efficient car?

According to Natural Resources Canada, the most fuel-efficient new (non-plug-in) vehicle on the market in 2020 is a Hyundai Ioniq. The Ford Escape Hybrid is listed as the most fuel efficient SUV.

What’s the most environmentally friendly car?

A study conducted by the American Council for an Energy Efficient Economy (ACEEE) lists the Hyundai Ioniq and MINI Cooper SE as tied for the most environmentally friendly car. These are followed closely by the Toyota Prius Prime, BMW i3s and Nissan Leaf.

5 factors to consider when shopping for an eco-friendly vehicle

There are a number of factors to consider when you want to buy an electric car in Canada.

1. Fuel efficiency. Ask how many miles per gallon (MPG) or equivalent (MPGe) you’ll get when you buy a hybrid or electric car in Canada. The higher the MPG, the more efficient your vehicle will be and the less you’ll spend on gas.
2. Transmission. Manual transmission might be harder for Canadians to drive, but it’s more eco-friendly than automatic.
3. Suspensions. Cars with sport suspensions give you better control of the vehicle, meaning you won’t have to stop as much.
4. Colour. Lighter-coloured cars keep things cool in places where it’s hot most of the time. Dark coloured cars can keep in the heat in locations with a cooler climate.
5. Reviews. Look at online forums to find out what customer experiences have been with the vehicle. If you spot too many red flags, consider another car.

What are the benefits of an eco-friendly vehicle?

Eco-friendly vehicles have a range of benefits for both the owner and the community. Here are some reasons to drive a green car:

• Fewer emissions. Eco-friendly cars don’t emit as much carbon dioxide, which means cleaner cities and less pollution in your neighborhood.
• Save money on gas. Electric and hybrid vehicles require you to spend a fraction of what you would pay for gas with a normal car.
• Tax credit. When you buy a hybrid car or an electric car, you could be eligible for a tax credit through your provincial or federal government .
• Lower insurance rates. You may qualify for lower rates or insurance rebates if you insure an eco-friendly car.

An inside look at the hybrid engine of a Toyota Prius C

What to watch out for with an eco-friendly car

• More expensive. Eco-friendly cars can be much more expensive than gas vehicles, even when you consider the money you’ll save on fuel, oil and maintenance.
• Limited driving range. You may get less mileage for a fully charged battery than you will with a tank of gas, which means you may need to recharge mid-drive. Getting a hybrid can help with this downside.
• Fewer chances to power up. Not all gas stations have recharge stations for electric vehicles, meaning you could get left high and dry if your battery runs out.

3 alternatives to buying an electric or hybrid car

1. High MPG gas vehicles. While gas-powered vehicles won’t be as efficient as electric vehicles, some non-hybrid vehicles come with relatively low fuel consumption (like the 2020 Mitsubishi Mirage or Toyota Corolla).
2. Smaller cars. Smaller, two-door vehicles can sometimes get higher mileage than gas-guzzlers like SUVs.
3. Biodiesel cars. Cars that run on animal fat or vegetable oil are a novel choice, and they typically cost less than a Tesla or Prius.

4 tips for fuel-efficient driving

Even if you can’t afford to buy a new car right now, you can substantially reduce your vehicle’s emissions by following these tips:

1. Accelerate slowly and smoothly. Engines use the most fuel when starting up or accelerating. Try to limit rapid or erratic acceleration.
2. Anticipate traffic conditions. The most efficient way to drive is to maintain a fairly constant speed. Try to anticipate the conditions ahead to minimize the amount you need to slow down or speed up.
3. Remove unnecessary equipment. Extra weight on your car will increase the amount of drag, cutting into your fuel savings. Remove accessories such as roof racks, tools chests and bike racks when not in use to lighten your load.
4. Maintain your vehicle. Basic maintenance such as checking tire air levels and engine oil is an easy way to make sure your vehicle isn’t burning dirty oil or expending more energy than necessary.

More ways to cut back on your carbon footprint

If you can’t afford an electric car, you may want to consider other options to reduce your emissions:

• Take public transport. Take the bus or train to work and save on parking. Schedule public transit into your routine once or twice a week to cut down on how much you drive.
• Ride a bike. If you live in a bike-friendly town, you might be able to get around even faster on a bike than you would with a car, especially during rush hour.
• Avoid unnecessary flights. Air travel is one of the least environmentally friendly ways to get around. Try to limit how much you fly and aim to take on-ground transportation to reduce your carbon footprint wherever possible.

Bottom line

You may want to consider getting an eco-friendly car if you’re concerned about your vehicle’s carbon emissions and their effect on the environment. Hybrid and electric cars tend to cost more than fuel-powered cars, but they also come with government rebates and gas savings to offset the cost. Learn more about eco-friendly cars and compare your financing options when you’re ready to buy.

Frequently asked questions

• Is an eco-friendly car worth the investment?

  It depends. Getting an eco-friendly car is usually more expensive up front, but it can save you money in the long run. This is because you’ll avoid spending extra on gas, maintenance and other costs associated with fuel-powered engines. You may also get discounts on your car insurance if you choose to buy an electric car in Canada.

• Should I choose a hybrid or an electric car?

  The choice really depends on how you plan to use your car. If you’re in an area that has plenty of charging stations and you drive short distances, you may want to buy an electric car in Canada. If you want an engine that can switch between gas and electric for longer commutes, then it might make sense to buy a hybrid car.

• Is an electric car truly emissions-free?

  Yes, but only when it comes to emitting fumes. If coal-powered electricity is used to charge the car, then it’s still responsible for carbon emissions. Your electric car will also be responsible for any emissions produced in the manufacturing process.