Discounted loan rates and upcoming initiatives support take-up of electric vehicles
This article was produced in partnership with Resimac Asset Finance
As Australia picks up the pace in its efforts to reach net-zero emissions by 2050, electric vehicles will have a key role to play in reaching this goal – and so too will the brokers who help customers secure EV finance.
Leading non-bank lender Resimac is committed to helping individuals and businesses make the switch to electric vehicle by providing competitive financing options and working closely with its broker partners and their customers.
Danny Tuttlebee (pictured above), the head of sales at Resimac Asset Finance, said state governments had done a fantastic job of making electric vehicles more affordable, as well as encouraging Australians to make the switch with incentives such as cashbacks, free rego, and discounts on stamp duty.
“At Resimac Asset Finance, we’re actively exploring other opportunities with a view to potentially launching something in the next six to 12 months,” Tuttlebee said.
“If we go down that path, it will be a product that makes sense for commercial borrowers (who typically have different considerations to consumers) and fills a need that isn’t currently being addressed to make it an easy sell for brokers. Watch this space!”
Resimac Asset Finance has been offering a lower commercial rate on loans for EVs since early last year, in line with its commitment to help increase EV uptake in Australia.
In the lead up to Easter, the non-bank has stepped this up with promotional pricing that shaves up to 50 basis points off the regular interest rate for new and near-new (up to three years old) motor and electric vehicles, until March 27.
Tuttlebee said this was one of the lowest rates right now for electric vehicle loans, and “it’s a bit of a test to see what the current appetite is like for EV-specific offerings”.
Resimac’s commitment to electric vehicles
The importance of supporting EV take-up can’t be overstated, said Tuttlebee,
“Passenger cars and light commercial vehicles account for more than 10% of the total emissions in Australia, so getting everyone to switch to electric will make a huge contribution to getting Australia to net zero,” he said.
“Of course, there are opportunities to reduce our carbon footprint outside of passenger vehicles, too. Road freight transport plays a huge role in Australia’s supply chains, however the trucks are responsible for 4% of Australia’s greenhouse emissions.”
Resimac Asset Finance was in preliminary talks with transportation companies that had an interest in transitioning to cleaner vehicles.
However, Tuttlebee said these conversations couldn’t progress until the federal and state governments stepped in to help reduce the cost of electric, hydrogen and renewable diesel-powered trucks and create the critical infrastructure to support them.
In addition to Resimac Asset Finance’s always-on EV discount and occasional offers, such as the current Easter special, the non-bank is also looking at various options to support borrowers and brokers.
“We may develop an EV-specific product in the future if it makes sense,” said Tuttlebee.
“Generally, we’re going to be broadening our motor vehicle loans to include the consumer market in the back end of this year, and we expect EVs will be a popular option in that channel.
“We’ll also be looking to offer a novated lease solution soon after, and this kind of finance is a match made in heaven for EVs. Unlike regular petrol guzzlers, EVs are exempt from fringe benefits tax, and this can save a lot of money if it’s for both work and personal use.
“This is where brokers can offer a lot of value, as they can help commercial borrowers evaluate the different options and provide recommendations that are in line with the business’ needs and requirements. With EVs still being relatively new to the market, brokers have an opportunity to skill up in this area and have an advantage over their peers.”
Opportunities for brokers in EV lending
Tuttlebee said EV lending for commercial borrowers was much the same as regular car finance.
“Mortgage brokers will need to get additional accreditation for commercial finance through their aggregator, but it’s not an onerous process,” he said.
The three main things that brokers should be aware of for EV finance:
- Government incentives and subsidies – it’s worth checking if any of these apply, as it can make a difference to the borrower’s up-front and ongoing costs
- Misconceptions that borrowers may have around purchase price – EVs are now much more affordable, and this reduction in cost means they can pay themselves off (with regards to savings in fuel) in as little as three years
- The costs for servicing and parts will be different to regular motor vehicles, and these need to be taken into consideration when assessing the overall running costs of an EV versus a motor vehicle.
Why Australia is behind the world on EV purchases
Australia’s EV car sales are increasing, with the Electric Vehicle Council estimating that as of July 2023, 8.4 % of all new cars sold were EVs but this lags behind other parts of the world such as Europe where EVs had a 14.6% market share of all new cars sold in 2023.
“We’re largely at the mercy of the car manufacturers, battery technology and public charging infrastructure when it comes to electric vehicles hitting critical mass in Australia,” said Tuttlebee.
“Cost is a less of a concern. While EVs still demand a premium over their motor vehicle counterparts, there are an increasing number of entry-level options on the market, with the cheapest option now under $40,000.”
Tuttlebee said the main limitation probably boiled down to inconvenience.
“If you’re only doing short skips around town, the average 435km range of an electric vehicle should be more than sufficient, but motorists who regularly drive further will feel that range limitation.
“This is exacerbated by the limited public EV charging network in Australia, which currently consists of 840 charging sites (although this is expected to double to 1,600 by the end of the year), and lengthier charging times (between 30 minutes to several hours).”
These challenges should be resolved fairly quickly said Tuttlebee, based on the steep rate of innovation and growth experienced to date with battery technology and public charging stations.
“This is the time for brokers to begin talking to their clients about electric vehicles,” he said.
"It’s something that clients have probably started thinking about already, so being proactive can put brokers in good stead to own that conversation and any resulting finance requests that come off the back of it.
“The move to EVs is as dramatic a change as the move from horse and carriage to automobiles, and we’re excited about working with brokers and their customers to help drive that revolution.”
To find out more about Resimac Asset Finance’s EV offering, check out the electric vehicle finance section of the website.
With nearly 20 years of commercial finance experience across the big four and niche lenders, Danny Tuttlebee brings a wealth of knowledge and expertise to Resimac Asset Finance as its head of sales.He oversees the business’ fast-growing sales teams for Automobile & Equipment and Secured Business Lending.
