Environmentally conscious incentives have been popping up throughout the country through both public and private initiatives. The most notable public initiative came with the “cash for clunkers” deal which aimed at removing a large number of old gas guzzling autos off the streets.
With an increasing percentage of the population looking to make their lives a little greener – private corporations, namely big banks – have also seen a growing opportunity.
A recent study over at Bankrate went into a great deal of depth on the motives behind both banks and credit unions getting on the green bank wagon – and the approach by these financial institutions appears to be a win, win for both them and the consumers.
What’s their approach?
Offering discounts on auto loans for those purchasing hybrids and other “green vehicles.” A number of local banks and credit unions (and even one large national bank) are offering fairly noteworthy discounts for both new and used ‘green’ auto purchases.
The win, win scenario that has been playing out since the inception of these deals is that A) consumers have even further incentive to purchase an eco-friendly ride and B) the credit unions and banks issuing the discounts have found that the individuals purchasing the green vehicles are far more likely to make timely payments on their loans.
Vice President of Consumer Products at US Bank – whose currently offering this exceptional green vehicle discount – stated that “It decreases our risk in our loan portfolio” when comparing the auto shoppers who opt for green cars vs. those who do not.
US Bank’s green vehicle promotion “SmartWay” was originally issued in 2009 and was set to be available as a promotional product for a limited time, however, because of the success rate of the deal and the security of the portfolio of borrowers, its still available in 2012!
What is SmartWay?
When you identify a cleaner, more fuel efficient vehicle through the EPA Green Vehicle Guide, and choose to finance or refinance that new or used auto with U.S. Bank, you’ll snag a .50% discount on your overall APR.
US Bank also claims to have slightly looser standards when defining what a ‘green vehicle’ is. According to US Bank, some lenders offer green vehicle programs only on new or nearly new vehicles, hybrids or high gas mileage vehicles, however, they claim to make eligible vehicles include all EPA Certified SmartWay autos and even trucks.
Smaller, community-based, banking institutions have willingly jumped on board as well. For example Columbia Credit Union out of Washington state is offering auto loan rates as low as 3.74% APR, if your vehicle is eligible for their “E-Go loan discount” of 0.25% APR.
Does your bank or credit union offer green discounts? If so, let us know about it!