An Australian bank has come under fire after announcing it no longer provides loans for new diesel and petrol-fuelled cars.
Bank Australia has confirmed it ceased to provide loans on combustion and hybrid cars as of February and will only offer car loans for electric vehicles and secondhand petrol cars.
‘By phasing out car loans for new fossil fuel vehicles, we are sending a signal to the Australian market about the urgent need to accelerate the transition from internal combustion engines to electric vehicles,’ a Bank Australia spokesman said.
‘We recognise that the energy transition will require a wide range of policies and initiatives, and we are committed to playing our part in reaching a net-zero economy.’
Other major Australian banks continue to offer car loans for combustion vehicles.
Aussies were left fuming over the announcement with many expressing their rage on social media platform X.
‘Net Zero madness means only the wealthy will continue as normal … buying a new internal combustion engine vehicle will be classified as an “unacceptable loan purpose”. Wow,’ one wrote.
‘Bank Australia will be punished by the market,’ another said.
‘Australians driving around in ageing ICE cars a bit like Cuba then, not a good look,’ a third added.
On Reddit, customers expressed concerns over the price of a new electric vehicle.
‘(I) feel for those who need a loan to buy a new car. You have to get a bigger loan, for a car you don’t want. EV’s cost more than ICE,’ one wrote.
In Australia, the cheapest new electric vehicles cost about $40,000 including on-road costs, but the majority of models sell in the $60,000 to $90,000 range.
Bank Australia addressed price-related concerns, clarifying customers can still apply for car loans on ‘secondhand’ combustion cars.
‘We know that not everyone will have access to new electric vehicles right now, and we want to make sure customers who need cars still buy them,’ a spokesman said.
‘That’s why we still finance second-hand hybrid and combustion engines because this still avoids bringing a new fossil fuel-powered car into the market.
‘We also recognise that it will take time to develop a second-hand car market for electric vehicles.’
The policy is consistent with the customer-owned bank’s wider priorities and ethical views.
‘Even with today’s electricity grid, driving with an EV generates 29-41 per cent less emissions than other car fuels, and for customers who can charge their cars at home using 100 per cent renewable energy from solar panels, those emissions can be brought down to zero,’ their website stated.
Some drivers supported the move, saying the bank had every right to ban the loans.
‘They are not forcing anyone to do anything. They can decide to whom they will lend, and people can decide to use their products or not,’ one wrote.
‘Oh no, a business doesn’t want to provide a service they’ve decided not to provide,’ another sarcastically added.
