DBS Bank claims offer industry-leading 1.68 percent p.a. loans for hybrid or electric cars beginning March 1, 2021
Things just got even better for buyers of electrified cars in Singapore with DBS Bank announcing its plans to offer car loans with an industry low of 1.68 percent for new and used hybrid or electric cars, beginning March 1, 2021.
It’s launching what is the first electrified vehicle-specific loan for Singapore, what it calls the DBS Green Car Loan. Additionally, each Green Car Loan taken up by a customer means DBS will donate towards planting a tree in NParks’ ‘OneMillionTrees’ programme. The programme run by NParks aims to plant a million trees in Singapore over the next decade, and currently has 163,324 trees planted.
This move follows the revelation that DBS is the finance partner for Tesla Singapore, with the American BEV brand announcing prices and orders for its Model 3 for the first time officially here.
Given the industry standard interest rate for car loans is 2.78 percent (though in practice it is usually slightly lower), the substantially lower 1.68 percent interest rate could mean significant savings for car buyers. For a currently popular hybrid model costing around S$100,000, it would mean S$70 less per month, and S$5,816 less interest paid overall (see below).
Toyota Yaris Cross Excite Hybrid S$107,888 with COE
7-year (84 months), 2.78 percent
payment 30 percent
|Loan amount||Interest paid||Total paid||Monthly installment|
|2.78 percent loan||S$32,366||S$75,522||S$14,219||S$90,219||S$1,074.30|
|1.68 percent Green Car loan||S$32,366||S$75,522||S$8,881||S$84,403||S$1,004.80|
This development underscores how the drive toward sustainability is slowly shifting the focus of almost every modern industry, from mobility and transport to finance.
“There is clearly much room for growth and we hope the introduction of Singapore’s first green car loan will help alleviate affordability concerns and be the tipping point for car buyers including electric or hybrid vehicles in their consideration set. Across the organisation, we’ve been single-mindedly pursuing our sustainability agenda,” said Jeremy Soo, the Head of Consumer Banking Group (Singapore) for DBS Bank.
As part of its own measurement studies in conjunction with the Impact Institute, DBS found that ‘lending to the electric vehicle (EV) instead of combustion engine vehicle (CEV) sector has lower environmental and social costs of approximately 40 percent and 16 percent respectively.’ The bank has also announced its target for sustainability finance as S$50-billion by 2024.
Electrified cars are front and centre for Singapore in 2021 thanks to government rebates from the Electric Vehicle Early Adoption Initiative and revised Vehicular Emissions Scheme making electrified cars more affordable than ever. Adding fuel to that not-a-fire is the fact that Tesla has just announced its return to Singapore with its cars officially priced, and its finance partner is DBS itself.