“Green” cars can cut your carbon foot print, 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, you likely won’t be stuck choosing the first car you find. But watch out — it might get expensive.
What makes a car eco-friendly?
A green 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.
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 engine that charges the battery. Some also utilize deceleration when braking to charge the electric engine.
The onboard computer in the car switches between the two engines to maximize efficiency. For example, the electric engine switches on when the car is idle and during acceleration, but while cruising, the gas engine takes over.
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, and some electric cars also utilize the deceleration process to charge the battery.
Because they lack a gas engine, electric cars have no fuel tank or exhaust pipe and never need an oil change. However, they need to be recharged — usually every 50 to 100 miles — which can only be done in certain locations. The good news? There are more than 31,100 alternate fueling stations available in both the US and Canada.
Click here to visit the CAA website in order to find a charging station near you.
How can I finance an eco-friendly vehicle?
If you’ve decided on going green but aren’t sure how you can finance your car purchase, you have options.
Car loan. Green cars are like any other car, and you’ll likely qualify for a car loan from a lender. The benefit? Some banks and credit unions offer interest rate discounts for green car purchases.
Home equity loan. If you’ve built up enough equity in your home, you could use that money to finance your green car.
Personal loan. A personal loan can be used for just about anything. So if you have good credit, you may be able to finance your car without using it as collateral.
Browse financing options for an eco-friendly car
Representative example: Leon buys a hybrid car
Leon, a resident of Ontario, runs a successful cleaning business known for using plant-based, non-toxic cleaners. He wants to buy a car to travel between job sites and is hoping to find an affordable model that will make less of an environmental impact than a traditional vehicle.
After doing some research, Leon decides to buy a Ford Fusion Hybrid SE priced at $33,000.00. He places a 20% deposit of $6,600.00 and heads to his local bank to get an auto loan to cover the rest. Because of his strong credit, Leon is approved for a loan to cover the outstanding amount plus 13% HST ($26,400.00 + $4,290.00). He also pays approximately $180.00 to register his vehicle with the provincial government – this includes the cost of license plates, a sticker and a vehicle permit.
Cost of new vehicle
$33,000.00
Loan type
Auto loan (term loan)
Loan amount
$30,690.00
Interest rate (APR)
5.50%
Loan term
7 years
Additional fees
4.00% origination fee ($1,227.60)
Payment amount
$441.02 monthly or $203.34 biweekly
Total loan cost
$37,045.68 with monthly payments $37,007.88 with biweekly payments
*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.
How much do green cars cost?
Green cars are more expensive than gas vehicles. An electric hatchback may sell for $40,000, and mid-size sedan hybrids go for around $30,000. Comparable gas models for both might cost as low as $20,000. Here are a few popular fully electric and hybrid models.
Model
Hybrid/Electric
Starting price
MPGe
BMW i3
Electric
$48,750
118 MPGe
A3 Sportback e-tron
Hybrid
$40,900
83 MPGe
Kia Soul EV
Electric
$41,080
111 MPGe
Ford Focus Electric
Electric
$34,998
118 MPGe
Chrysler Pacifica Hybrid
Hybrid
$50,695
84 MPGe
Chevrolet Volt
Hybrid
$40,195
106 MPGe
Ford C-MAX
Hybrid
$27,465
38 MPGe
Ford Fusion Hybrid
Hybrid
$32,195
42 MPGe
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. Green cars have low-exhaust emissions, reducing the amount of carbon released into the atmosphere.
No- or low-gas costs. While hybrids require gas, they consume much less than regular cars. Electric cars don’t use any gas but do require electricity to recharge.
Cleaner cities. Car emissions are a major contributor to poor air quality in cities. By driving a vehicle with low emissions, you won’t contribute to the smog in your area.
Less noise. Electric engines are quieter than gas engines. This reduces the amount of road noise in cities.
Tax credit. When you buy a hybrid or electric car, you could be eligible for a tax credit through your provincial or federal government .
Increasing consumer demand. By generating demand for electric vehicles, you’re helping to improve the technology and bring down the price. Doing so makes them more attractive to others, creating a cycle of benefits for everyone.
If you’re buying a fully electric car, then your vehicle won’t produce any emissions. The benefits with hybrids may not be as clear if the manufacturer reports fuel economy that’s unattainable in your situation.
Research prospective cars before you commit to buying one by looking at user reviews and and other independent, unbiased articles about emissions and fuel economy on most new vehicles.
An inside look at the hybrid engine of a Toyota Prius C
A few hybrid and electric cars to consider
Here are some of the most eco-friendly cars found on the road across Canada:
Toyota Prius. An early hybrid and perhaps one of the more common green cars. They come as a medium sedan or hatchback and are similar to a Toyota Corolla.
Nissan Leaf. A fully electric hatchback with a small solar panel for internal accessories. It can do a partial recharge in 30 minutes from specific quick-charge points.
Mitsubishi Outlander PHEV. This one is for the whole family. A hybrid SUV which has been reported to get up to 74 MPG from its electric and gas engines.
Ford C-Max Energi. One of the cheaper hybrids, the rear seat battery may make it cramped for your passengers. However, its performance makes up for it if you only have occasional guests.
BMWi3. A fully electric hatch for city drivers who appreciate luxury German engineering.
Tesla Model S. Tesla only makes electric cars. They aren’t cheap, but they’re designed to perform like a sports car. If you want to drive an uncommon car, the Model S should put you in the spotlight.
What's the most fuel-efficient car?
According to Natural Resources Canada, the Hyundai IONIQ Electric is the most fuel-efficient, mid-sized car on the road in 2019. The IONIQ has an impressive 88 kW electric motor, which earns the equivalent of 4.1L of gasoline per 100 kilometres of driving.
The least efficient mid-sized car out there? Bentley’s Mulsanne. This car only gets you 12L/100km and could cost you upwards of $4,000 a year in fuel. The Cadallac CTS-V earns an honourable mention, getting you only 14L/100km.
What to watch out for
The cost. Green cars are much more expensive than a comparable gas vehicle. Even considering the savings on gas, oil and maintenance, it would take a few years to offset the upfront expense.
The limited driving range. Range refers to how far the vehicle can travel before it needs to refuel. Compared to gas vehicles, electric cars have a very restricted range.
Limited chances to power up. Not all gas stations have recharge stations, such as your home or a public recharge station.
It’s a new technology. Green car technology is still developing and working out the kinks.
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 just by changing your behavior as a driver. Here are some handy green driving tips:
Accelerate slowly and smoothly. Engines use the most fuel when starting up or accelerating. Try to limit rapid or erratic acceleration.
Anticipate traffic conditions. The most efficient way to drive is to maintain a fairly constant speed. Rapid slowing and accelerating wastes fuel. Anticipate the conditions ahead to minimize the amount you need to slow down or speed up. And of course, don’t be afraid to use cruise control on the highway.
Remove unnecessary equipment. Extra weight and accessories decrease the efficiency of your vehicle. Roof racks cause drag and tools add extra weight. If you don’t regularly use or need them, take them off.
Maintain your vehicle. Basic maintenance such as checking tire air levels and engine oil is an easy way to keep your car running efficiently. Performing routine services will also help identify problems to keep your vehicle operating optimally.
Bottom line
Green cars are becoming an increasingly better option for those living in cities. If you’re concerned about your vehicle’s carbon emissions and its effect on the environment, then consider getting an eco-friendly alternative. Be aware of the additional upfront cost and limitations before you commit, and compare your financing options when you’re ready to buy.
Frequently asked questions
MPGe stands for “miles per gallon of gasoline-equivalent.” This term is used by the U.S. Environmental Protection Agency (EPS) and car manufacturers to compare energy consumed by electric and hybrid vehicles with gas-powered vehicles. In Canada, the fuel efficiency of vehicles is often stated in terms of the number of Litres required to drive 100 kilometres (L/100km).
It depends. If you’re able to handle the high upfront purchase price, then you’ll likely be pleased with how far green cars have come in the past few decades. In addition, you’ll be making it easier for manufacturers to reinvest in the technology, lowering the price and making it more affordable for everyone down the road.
If you don’t think you can handle high monthly payments from a car loan, it might be best to hold off on such a large purchase and instead follow our green driving tips listed above.
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, an electric car is certainly a greener option than a hybrid. If you’re afraid you might run out of a charge on long drives or don’t have many charging stations in your area, a hybrid will be the better option for your needs.
As far as actually emitting fumes, yes, an electric car is emissions-free. However, if coal-powered electricity is used to charge the car, then it is still responsible for carbon emissions. Electric cars can only be truly emissions-free if a renewable source of electricity is used to charge them.
In addition, the production of an electric car will consume more fossil fuels on average than a gas-powered vehicle. This may make some environmentally-conscious drivers wary, but this initial pollution is outweighed by the lowered lifetime emissions of an electric battery. Studies have found that electric cars produce 80% less emissions than equivalent gas-powered cars.
Overall, an electric car will still produce emissions – but this doesn’t mean that it’s not worth it! You’ll still be making huge strides in reducing your carbon footprint when driving an electric vehicle.
Elizabeth Barry is Finder's global fintech editor. She has written about finance for over six years and has been featured in a range of publications and media including Seven News, the ABC, Mamamia, Dynamic Business and Financy. Elizabeth has a Bachelor of Communications and a Master of Creative Writing from the University of Technology Sydney. In 2017, she received the Highly Commended award for Best New Journalist at the IT Journalism Awards. Elizabeth's passion is writing about innovations in financial services (which has surprised her more than anyone else).
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