New proposals from banks for customers of electric cars

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Two new loan proposals were submitted by banks to attract customers’ attention to environmentally friendly cars as part of the strategy of sustainable development of the UAE “2021 Sustainability Vision”.

The National Bank of Fujairah presented its loan product Green Auto Loan (issued for purchase of vehicles with minimal environmental impact). For the clients who want to get financing for the acquisition of such cars, the bank allocates an amount of 1 million Dhs.

Emirates Islamic also announced its Green Auto Finance program, according to which the bank allocates up to 1.5 million dirhams for the purchase of green cars.

Banks play an important role in promoting and implementing the principles of sustainable development in the UAE. Especially the banks’ contribution is noticeable in the sphere of financial support to customers who want to purchase expensive hybrid cars and electric cars.

It is expected that the adopted tariffs and favorable conditions should contribute to the increase in sales of vehicles with zero carbon emissions.

Those who want to take advantage of the Green Auto Loan offer of the National Bank of Fujairah must be over 18 years of age, have an income of more than 5,000 dirhams a month and be able to use the new car for 5 years, a used car – for 48 months. The owners of electric cars can get a loan rate of 2.2%, while the loan rate for the purchase of traditional cars varies between 2.75% and 4.25%.

The Green Auto Finance program of the Islamic Bank of the Emirates was presented in February this year. It is also available for customers with a minimum income of 5,000 dirhams a month. In accordance with the new offer, which was presented last week, customers with incomes less than 30,000 dirhams a month receive a 50% discount on the service commission (it will be 0.5% of the lending amount), and customers whose monthly income is more than 30,000 dirhams, are exempt from payment of this commission. Nevertheless, according to experts, owners of hybrid cars and electric cars should also consider other proposals that are presented on the market.

Experts believe that other banks can join the Green loan initiative.

In addition, incentives such as free charging at stations approved by the Dubai Authority for electricity and water supply until 2019, free parking in special places and lack of fees for the system of payment of road charges “Salik” of the Road Administration, are aimed at increasing demand for electric cars and the increase in the number of sales in the coming years.

Representatives of the HSBC Bank declared that customers over the age of 21 with the income more than 7500 dirhams a month can receive a loan from 30,000 dirhams to 918,000 dirhams, depending on certain criteria, within the framework of the Green Car Loan program. In relation to HSBC customers wishing to use Green Car Loan when buying an electric car or a hybrid car, a reduced interest rate and a preferential service charge are applied – a discount of 50 basis points on the applicable interest rate and a 50% discount on the service commission.

Emirates NBD offers customers interested in purchasing electric and hybrid cars a 0.25% discount on applicable interest rates. According to the leadership of Emirates NBD, their Green Auto Loan program is part of the bank’s investment strategy to create a sustainable environment. Emirates NBD was the first bank in the region to install a charging station, and also allocated special parking spaces for electric vehicles near their certain branches. The Bank seeks to introduce environmentally friendly business models, including working to digitize internal and external processes to reduce the use of paper, introduce initiatives to save energy and work on conducting client activities with a minimum amount of carbon emissions.

Considering the facts that Tesla has already entered the UAE market, and large automakers such as GM and Ford have presented their electric cars in the Middle East region, the future of electric vehicles in the country looks rather promising.