Things to consider when Financing an electric vehicle

More and more New Zealanders are opting for an electric vehicle when they’re looking to buy a new car. According to the Motor Industry Association, there has been a fresh surge in the number of people looking at electric options, probably driven by an increase in fuel prices in the first half of 2026.

If you’re buying an electric vehicle, you might be wondering how to finance it. Generally, the considerations are similar to those for a conventional vehicle but there may be additional factors to take into account, which might affect the affordability and long-term value on offer.

Having a good understanding of these may help you when it comes to choosing a suitable vehicle and finance option.

Understanding electric vehicles

An electric vehicle is one that uses electricity to power some or all of its movement. It’s an alternative to traditional vehicles, which use either petrol or diesel. Electric vehicles can have a lower running cost, particularly if you have access to low-cost electricity, such as via a solar power system. Some people also choose to go electric because of the lack of emissions, which can make them a more environmentally friendly option.

Types of Electric Vehicles

There are a few different types of electric vehicles.

• Battery Electric Vehicles (BEVs): A battery electric vehicle is run entirely on electricity. You plug it in to charge the battery, use that charge to power your car, then recharge as necessary.
• Hybrid Electric Vehicles (HEVs): A hybrid electric vehicle has both an electric motor and a petrol engine. You don’t have to charge the vehicle, because the battery is charged through braking and by the engine. You still need to fuel up with petrol from time to time, but your fuel usage and emissions are less than a conventional vehicle.
• Plug-in Hybrid Electric Vehicles (PHEVs): Plug-in hybrids also have an electric motor and a petrol engine, but they can be charged from an external power source, which can provide a bigger electric-only driving range.

Consider the upfront cost of going electric

Electric vehicles can sometimes have a higher purchase price than comparable petrol vehicles. That might mean you need to borrow a bit more money upfront to purchase one, even if you expect the long-term running costs to be lower.

When you’re thinking about what sort of vehicle to buy, you might weigh up whether a new EV or a used one is a better option for your budget. There are a range of vehicles available at various price points. Sometimes, you might also want to add accessories or upgrades to your vehicle, which could increase what you need to pay at the time of purchase.

Budget for home charging setup

If you opt for an electric vehicle that will be charged from your home, you may need to consider the setup you’ll need. Many EV owners install a dedicated home charger, which can be a much more convenient way to charge your vehicle, and could mean you can take advantage of cheaper power options overnight if you’re on a time-of-use electricity plan, or solar from a home system if you have one installed. How much it costs to add a charging setup can vary a bit, depending on how your house is set up for electrical purposes.

In other cases, you might decide to charge your vehicle at work, if that’s an option or you, or via public charging stations. Having a plan for this can help you to work out what you’ll need to set aside in your upfront costs.

Understand the real running costs

How much it will cost to run your EV depends a lot on your individual circumstances. Standard hybrids don’t incur any cost for the electricity, but you’ll still need to pay for petrol.

Plug-in hybrids and battery electric vehicles’ running costs will vary according to what power costs you. The Energy Efficiency and Conservation Authority (EECA), estimates that an EV charged at home off-peak will cost about $11 to run 100km. Charged via a public fast charger, the cost for 100km would be about $19.

Electric vehicle owners pay road user charges, at a rate of $76 per 1000km.

Electric vehicles often have lower servicing requirements than conventional cars because they do not have as many moving parts. What you’ll pay for insurance will vary depending on vehicle model and complexity. There have been reports that some electric vehicles are more expensive to insure, but this can have a lot of variables.

As with any vehicle, it’s helpful to think about the total cost of ownership when you are planning to buy an EV, rather than the purchase price alone.

Evaluate battery health before financing a used EV

If you haven’t owned an EV before, questions about the battery health could feel a bit foreign. It’s important to understand, though, because battery condition can have an impact on the driving range of a vehicle and its overall value.

You’ll usually need to look into the battery condition of each EV you buy because degradation varies between vehicles and different usage patterns. There can be more involved than simply the age of the vehicle.

If you can, it’s often helpful to request a battery health report so you can see what you’re dealing with and look at what manufacturer warranty might be available for the battery. A cheap EV may prove to be a more expensive option in the long run if you end up having to replace the battery.

Think about how long you plan to keep the vehicle

The sort of finance that’s suitable for your purchase may depend a bit on your plans for the vehicle. It’s often helpful for the loan term to either be less than or equal to the length of time you plan to own the vehicle, so you aren’t left with a significant loan balance at the time when you’re thinking about selling. You may find that any rapid improvements in EV technology could influence the future resale value of your vehicle.

It may also be helpful to think about how your loan term aligns with your warranty period.

Compare EV finance and green loan options

If you have a home loan with a mainstream bank, you may be able to access a low or no-interest rate loan to pay for an electric vehicle. This is generally an option for people who will have 20 percent equity in their homes after the loan has been advanced.

There are a lot of people who don’t qualify for these offers, though. It’s still possible to borrow via a personal loan to buy an EV. Often, these loans will be secured against the vehicle, which means you may be able to access lower interest rates than if you took out an unsecured loan.

It may be useful to think about the total cost of borrowing rather than just the interest rate you’re being offered. You might consider things like the fees and charges involved, and how flexible the loan will be for any changes in your circumstances.

We can help you consider what options might be available to you and what might be a suitable fit.

Consider Resale Value and Future Demand

As part of your planning, you might think about what you’ll do when you decide to upgrade from the vehicle you’re buying now.

Unlike conventional vehicles, EV resale values can also be influenced by the battery condition and any technological developments in the industry. But, as we’ve seen lately, they can also be affected by external factors such as increases in the price of fuel.

Brand reputation, battery warranty and charging capability may also affect future demand. It’s always hard to predict the future with any certainty, but if you can get a sense of the potential resale value of your vehicle in the future, it may help you to decide what is an appropriate amount to borrow to purchase it.

Assess your position

Before you make your application, you might look at your current financial position and check a few things.

What sort of level of borrowing is likely to be affordable based on your current income and expenses? Lenders aren’t allowed to lend you more money than you can demonstrate you can comfortably pay back, but it helps to do your own exercise, too.

Think about what lenders will be looking for when they assess your application. We can help you to determine where any gaps might be.

Check your credit history. If there are any errors, you can ask to have them corrected. Understanding your credit score and whether lenders will see any potential problems when they run a check may also help you to gauge how your application may be treated.

Don’t borrow more than you’re comfortable you can repay over the long term. Loans are often for a period of a number of years, and you’ll want to know that you can comfortably handle yours for that time.

Frequently Asked Questions (FAQs)

Is financing an EV different from financing a petrol car?

It may be possible for some borrowers to access low- and no-interest loans to buy an EV. But for those who do not meet the criteria for these, borrowing is likely to be very similar. The lender may be interested in things like battery health, which are not a factor for conventional vehicles.

Can I finance a used electric vehicle in New Zealand?

Yes, you can. It’s possible to take a loan for a new or used electric vehicle.

Are green loans available for EV purchases?

Yes, some banks offer these. Usually, you’ll need to have a home loan with the bank. If you don’t meet the criteria, we can help you to see what other options might be available.

Should I finance charging equipment as part of my EV purchase? 

Many people find it’s a sensible idea. Having a charging set-up at home is a convenient option and can make it cheaper to run your vehicle.

Does battery health affect EV financing?

Battery degradation can reduce the vehicle’s resale value. If a lender is holding your vehicle as security, it may want reassurance that the battery is in good condition.

Ready to get on the road?

If you’d like to make a move into an electric vehicle, get in touch with us. We can help you look at the options that might be available to get you going.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.