Hong Leong Finance announced on March 23, that it has launched its green vehicle financing initiative for vehicle rental companies, the first in Singapore.

The new initiative comes in two parts: the Vehicle-Green Loan and the Charger-Green Loan.

The former is offered at a competitive rate of 1.5% per annum for up to seven years to encourage the vehicle rental sector towards the use of green vehicles. The package is available for fully electric vehicles (EVs) and hybrid vehicles.

These companies will also have the opportunity to take up financing for charging stations as a compatible option under the Charger-Green Loan scheme for up to three years.

Financing for both the EV and charger station will be offered together to the rental companies, while they decide on the make and brand of the EVs as well as the charging stations.

Singapore’s private hire car sector grew 142% over the last five years to 71,147 cars in 2020, according to figures released by the Land Transport Authority (LTA). Of that number, EVs and hybrids grew 571% to 43,632 vehicles.

SEE:Hong Leong Finance sees 38% drop in FY20 earnings of $63.9 mil on lower net interest income

“Launching Vehicle-Green and Charger-Green Loans is part of our overall strategy to promote and support sustainable finance. We take a holistic view when exploring ways to reduce carbon emissions and air pollution contributed by vehicles,” says Ang Tang Chor, president of Hong Leong Finance.

“In addition to customers who buy cars for personal use, we note that the vehicle rental category which includes private hire cars is a significant growing sector. We want to be inclusive. With the government’s enhanced rebates on green cars in place, these companies will benefit as early adopters of eco-friendly vehicles,” he adds.

“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 petrol. Maintenance costs are also lower as electric motors have fewer parts to service.”

“Our new green financing scheme aims to maximise opportunities for vehicle rental companies by delivering greater cost savings to their customers while improving their bottom line. The Vehicle-Green Loan for these companies will enable us to expand our reach beyond the consumer group, and offer the green financing in a more complete and sustainable manner,” he says.

As at 2.17pm, shares in Hong Leong Finance are trading flat at $2.42.