How lenders finance an electric car on an ABN: chattel mortgage, balloons and resale, green car loans, and the 2026-27 luxury car tax and car limit.
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Electric Car Finance · ABN Car Loan · Green Car Loans
If an electric ute or car suits your business, does a lender treat it any differently from the petrol version, and does the tax? Mostly no. The borrower read is the same; the vehicle read, the pricing and two tax thresholds are where the differences sit.
Quick Answer
Most lenders finance an electric car on an ABN much like a petrol one, through a chattel mortgage or business car loan, though some price green vehicles lower and may be more careful with balloons and resale on newer models. The structure is the same chattel mortgage a business uses for any vehicle, so an ABN car loan for an EV is assessed on your business first and the car second.
Also called: EV business car loan, green car loan, electric vehicle finance. They are the same product family; a green car loan is a lender's priced variant of its ordinary car loan, not a separate product.
Can you finance an electric car through your ABN?
An electric car can be financed through your ABN in the same way as a petrol one, usually with a chattel mortgage or a business car loan secured over the vehicle. The business owns the car from settlement, the lender holds security over it, and the repayments come out of the business.
In this post, "electric car" means what the Commonwealth Green Vehicle Guide covers: battery electric cars, utes and vans that run only on a rechargeable battery, plus plug-in hybrids that pair a battery with a petrol engine. The guide also covers hydrogen fuel cell vehicles, which are rare in small business fleets.
If you have seen electric cars promoted through a novated lease, that is an employee salary packaging product, and the Electric Car Discount behind it is an exemption from fringe benefits tax for employers and their staff. It is not the product a self-employed owner uses to buy a car for the business.
When an EV deal reaches us, the structure question is settled the same way it is for any business vehicle: who will own it, how much of its use is for the business, and whether a balloon suits the cash flow. If you are still weighing the options, our guide to chattel mortgage vs lease vs hire purchase sets them side by side.
How do lenders assess an electric car for a business loan?
Lenders assess you for an electric car exactly as they would for any other business vehicle; what can change is how they read the car itself. An EV is still a car to the credit team. Your ABN age, trading history, credit file and ability to service the repayments carry the decision, and none of those care what is under the bonnet.
For the lender, the open questions sit on the vehicle side:
- Resale history. Resale history is the open question on newer models, and how much weight it carries varies by lender. A car with a short used-market record gives the lender less evidence of what it will be worth in three or five years.
- Balloon and residual. Because the balloon payment is set against the car's expected residual value, some lenders may cap it lower or prefer a shorter term on a newer electric model.
- Valuation. The lender's valuation sets how much it will lend against the car, so a conservative read on a newer model can mean a larger deposit for the same loan-to-value ratio.
- Insurance. The lender will want comprehensive insurance noting its interest before settlement, the same as for a petrol car. Premiums for some electric models can differ, so get a quote early.
None of these is a reason a lender will refuse an electric car outright. They shape the term, the balloon and the deposit. Our guide to balloon payments and residual values explains how the end-of-term figure is set.
What is a green car loan, and can a business get one?
A green car loan is a lender's lower-priced version of its ordinary car loan, offered for vehicles that meet its low or zero emission test, and some lenders extend it to business borrowers. Green pricing is a lender's discount, not a different loan: the contract, the security and the assessment are the same as the standard product.
What usually qualifies is a battery electric vehicle, and sometimes a plug-in hybrid or a vehicle under a set emissions rating. The catch for a business buyer is that some lenders only offer the discount on consumer car loans, while others extend it to sole traders, companies and chattel mortgages. Ask whether the discount applies to the business product you are taking, not just to the lender's headline offer.
A discount on the rate can still lose to a cheaper contract once fees and the balloon are counted, so compare the whole cost. Our post on the comparison rate on a business car loan shows what to line up, and the ABN car loan calculator gives an indicative repayment for the amount you plan to finance.
| Question | Petrol or diesel | Electric or plug-in hybrid (indicative, varies by lender) |
|---|---|---|
| Loan structure | Chattel mortgage or business car loan secured over the vehicle | The same structures; ownership and security work the same way |
| Term | Typically up to the lender's standard maximum for the vehicle's age | Often the same; some lenders may prefer a shorter term on newer models |
| Balloon | Set against the lender's residual guide for the model | May be capped lower where the model's resale history is thin |
| Valuation and resale | Priced off established used-market data | Newer models may be valued more conservatively |
| Insurance | Comprehensive cover noting the lender, in place before settlement | Same requirement; premiums and repair costs can differ, so quote early |
| Green pricing | Not usually available | Some lenders discount the rate for qualifying vehicles; eligibility and size vary |
What tax points differ for an electric car bought on an ABN?
The tax rules for an electric car bought on an ABN are mostly the same as for any business car, with two numbers worth checking before you choose the model: the luxury car tax threshold and the car limit. Both reset each financial year. At the time of writing, the 2026-27 figures are:
| Item | 2026-27 figure | Why it matters for an electric car |
|---|---|---|
| Luxury car tax rate | 33 per cent of the amount above the threshold | Where it applies, it sits in the price and so in the amount you finance |
| Threshold, fuel-efficient vehicles | $91,661 | The higher threshold, for cars that meet the ATO's fuel-efficient definition |
| Threshold, other vehicles | $80,809 | Applies to cars that do not meet that definition |
| Car limit | $69,883 | Caps the cost a business can use for depreciation on a car, whatever it runs on |
Sources: Australian Taxation Office, Luxury car tax rate and thresholds, last updated 1 June 2026; Australian Taxation Office small business newsroom, Car thresholds from 1 July, published 9 June 2026. Read 28 October 2026.
Which luxury car tax threshold applies depends on whether the car meets the ATO's fuel-efficient definition, and that definition changed from 1 July 2025, so confirm it with your dealer and accountant rather than assuming an electric car clears the higher figure. On a dearer model, the difference between the two thresholds can change what you finance.
The car limit caps the cost base for depreciation, so an expensive electric car does not depreciate on its full price. The mechanics sit in our business vehicle depreciation schedule post. The GST credit on a car is worked from the same limit; the ABN car loan guide covers how GST and tax time work on a business car.
Charging is the one running cost that is new. In general terms, the electricity used to charge a car used in the business is a running cost like fuel, claimed for the business use share. How you work out that share, especially for charging at home, is a question for your accountant.
Do states still give electric vehicle duty or rego discounts?
Some states and territories still offer electric vehicle discounts on duty or registration, but they vary and several have ended, so check your state before you count on one. A saving you read about last year may not exist when your car is delivered.
At the time of writing, the Commonwealth Green Vehicle Guide electric vehicle information page notes that state and territory incentives differ and that several have closed, including the Tasmanian and Western Australian rebates and Victoria's registration discount. It is the simplest place to start before you check your own state's transport or revenue office.
Source: Department of Infrastructure, Green Vehicle Guide, Electric vehicle information, read 28 October 2026.
For the island state, our ABN car finance in Tasmania post covers duty on a business car, and the ABN car finance in Canberra post covers the Australian Capital Territory's rules.
Duty and registration form part of the on-road costs, which some lenders will finance with the car. Where a concession applies, it lowers the drive-away price and so the amount you need to borrow.
Is an electric ute or van right for your work?
An electric ute or van suits work where the daily distance sits comfortably inside the range, the vehicle comes home or back to the depot each night, and towing and payload needs are modest. Where those three things are not true, a hybrid or a petrol or diesel vehicle may still be the better buy for now.
Suits an EV now
- Predictable daily runs well inside the range
- Overnight charging at home or at the depot
- Light loads and only occasional towing
- Mostly metro or regional town work
- Time spent charging does not cost jobs
Wait or go hybrid
- Long regional runs with few chargers on the way
- Regular heavy towing or full payloads
- No off-street parking to charge
- Work that cannot wait for a charge
- A new model with little resale history and a large balloon planned
That is the test: if your work fits the first list, an EV suits now; if it fits the second, wait or go hybrid. Charging setup matters as much as the car: the Green Vehicle Guide notes that charging from a standard wall outlet is slow and a dedicated charger is faster. The charger is a separate decision, with its own cost and finance, covered in our guide to solar, battery and EV charger finance.
If the choice is between a ute, a van and a light truck, our post on the ABN vehicle loan for a ute, van or light truck covers how each class is read. More finance guides for owners sit in the Business Owners Hub.
If the vehicle fits the work, check eligibility before you lock in the order, so the lender's view on term, balloon and deposit is known before the car arrives.
An electric car on an ABN goes through the same chattel mortgage or business car loan as a petrol one, and you are assessed on the same business file. The differences sit on the vehicle: resale history on newer models, how far a lender will go on the balloon, valuation and insurance. Green pricing can lower the rate where a lender extends it to business borrowers, but the whole cost still needs comparing. On tax, check the 2026-27 luxury car tax threshold and car limit before you choose the model, and check your state for any incentive still running.
Key takeaway: settle the work fit and charging first, then get the lender's view on term and balloon before you order the car.Frequently Asked Questions
A business can often get a green car loan, because some lenders offer a lower-priced version of their car loan for qualifying low or zero emission vehicles and extend it to sole traders and companies. Others keep green pricing for consumer loans only, and the size of the discount varies by lender. Check that the discount applies to the business product you take, such as a chattel mortgage, and compare the whole cost rather than the headline rate.
Lenders do finance electric cars with a balloon, but some set it more cautiously on newer models because the resale history that supports the residual is still thin. The balloon a lender accepts varies with the lender, the model and the term. Our guide to balloon payments and residual values explains how the figure is set.
Luxury car tax can apply to an electric car when its value is above the threshold that applies to it, which at the time of writing is $91,661 for fuel-efficient vehicles and $80,809 for other vehicles in 2026-27. Which threshold applies depends on the ATO's fuel-efficient definition, so confirm it with your dealer and accountant. Luxury car tax is separate from the car limit that caps depreciation on a business vehicle.
A sole trader can generally claim the business share of the electricity used to charge an electric car used in the business, in the same way other running costs are claimed. How you work out that share, especially for charging at home, is a question for your accountant. The car loan itself is assessed the same way for a sole trader as for any other business borrower.
Insurance for an electric work car can cost more than for a comparable petrol vehicle where repair and parts costs for the model are higher, though premiums vary by insurer and model. A lender will still want comprehensive insurance noting its interest before settlement. Get a quote before you commit to the model so the cost is in your budget.
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