The “Cash for Clunkers” program may have come to an end but there is still some good news on the horizon for carindividuals who are looking for a good deal on cars in the near future. It is being reported that lending rates for vehicles may begin to climb higher in coming months, consumers who go green with their vehicle choice will have an advantage.

In an effort to get more gas guzzling automobiles off of the highway, banks and credit unions are focusing on environmentally sound vehicle loans and offering much lower interest rates for full-efficient or hybrid vehicles than they are for less environmentally-friendly vehicles. While there has always been some consistent lenders who have been offering better green auto loans for many years, it seems the growing trend for lenders is to improve on the rates for the greener vehicles. As the green vehicle choices also continue to grow, many more lenders are jumping on board to follow suit.

Qualifications Are Many
In order to qualify for a green loan, many lenders will require that the vehicle of choice must be certified as green by the Environmental Protection Agency. Once certification has been established, lenders will learn of their decreased rate of interest. Banks benefit from the offer because according to research, statistics show that customers who purchase fuel efficient cars have also are more consistent in meeting their payment obligations than other groups of borrowers. Less defaults mean more profit for the bank or credit union.

Longevity Of Loans
While it is still early in the game when it comes to green loans, it seems it is a promotional deal that will carry on for some time. More up and coming drivers may have a tendency to be more environmentally conscious than perhaps their parents are, meaning future sales of environmentally friendly vehicles are likely to climb within the next generation. Even with the current generation, sales records show that despite the slump in auto sales (until the Cash for Clunkers program was introduced) in the last two years, sales of hybrids have overall remained strong. People who experienced the personal financial negatives during the recession are also likely to stick with the vehicles that will save them money over the long term since gas prices have been once again rising.

Hunting a Green Loan
Finding a green loan will take some effort on your part. Amongst financial institutions, there is a difference between what constitutes a green vehicle. Some lenders will only consider the deal with hybrids while others rely on the information provided by the Environmental Protection Agency. The personal research will require that you contact several lenders to find out their policies on “green loans”. Not every lender offers the same discounts or the same criteria so it pays to ask specific questions about what kinds of vehicles qualify and in turn if that kind of vehicle meets your own financial needs.



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