Hong Leong Finance rolls out lowest interest loans for electric vehicles

Hong Leong Finance is the latest lender to jump on the electric vehicle (EV) bandwagon, with a competitive loan tailored for rental companies. Following a similar move by DBS Bank to woo buyers of electric cars last month, Hong Leong Finance announced on 23 March 2021, a rental car loan with an interest rate of 1.5% for a tenure of seven years 'to steer the vehicle rental sector towards green vehicles usage'.

It is the lowest rate in Singapore, and applies to full electric cars as well as hybrids with a petrol engine paired with an electric motor. Interest rates for private passenger car buyers currently range from 1.68% to 1.98%. Dealers said rates for rental firms are usually higher because of perceived risks. Hong Leong Finance is also offering loans for rental companies looking to build their own charging stations.

"This will help accelerate the number of charging stations to 60,000 under the Government's Singapore Green Plan 2030," Hong Leong Finance said in a statement, adding that charger financing will be expanded progressively to cover commercial buildings and private condominiums.
Last month, OCBC Bank announced a tie-up for EV infrastructure firm Charge+ to accelerate the roll-out of charging points. Hong Leong Finance president Ang Tang Chor said the company is targeting vehicle rental firms because 'the vehicle rental category, which includes private-hire cars, is a significant growing sector'.

Singapore's private-hire car sector grew by 142% over the last five years to 71,147 cars in 2020, according to Land Transport Authority figures. Operators are beginning to add EVs to their fleet. For instance, Grab added 200 Hyundai Kona Electric crossovers to its fleet in 2019 and local car rental group RMG is looking to add Tesla Model 3s to its stable.

Mr. Ang added, "Green cars are becoming more affordable. With the price of petrol increasing, the daily cost of running an electric vehicle is cheaper than a car on fossil fuel. Maintenance costs are also lower as electric motors have fewer parts to service."

Last month, DBS announced similar green car loans with an interest rate of 1.68%, which it claimed was the lowest rate then.