Green car loan
Borrow up to 80% of the purchase price of a new or used electric car or qualifying plug-in hybrid through an authorized car dealer.
The loan finances your car purchase, and you repay the borrowed money with interest through monthly payments. The term can be up to seven years, but the car’s age plus the loan term cannot exceed 15 years.
Electric-car interest rates are 9.85% when you borrow up to 50% of the purchase price, 10.60% for 51–60%, 10.65% for 61–70%, and 10.85% for 71–80%. Qualifying plug-in hybrid rates in the same bands are 10.40%, 11.15%, 11.20% and 11.40%. These are the rates in the schedule effective 24 September 2026.
The loan origination fee varies with the repayment term: 1.85% for 6–23 months, 2% for 24–35, 2.25% for 36–47, 2.50% for 48–59, 3% for 60–71, and 3.10% for 72–84 months. The published minimum fee is ISK 25,000. Electric-car financing receives a 50% discount when the initial fee exceeds that minimum.
Eligibility
- This is an individual car-purchase loan for new or used cars. You can apply even if you bank elsewhere; the bank assesses the loan application.
- The green rates cover vehicles running on 100% renewable energy and plug-in hybrids emitting less than 50 g of CO₂ per kilometre. A hybrid must both plug in and meet this emissions limit.
- The car must cost at least ISK 700,000 and have no more than 180,000 km on the clock when the loan is taken out.
- Financing is limited to 80% of the purchase price. The maximum repayment term is seven years, and the vehicle’s age plus the repayment term must not exceed 15 years.
- An authorized car dealership must submit the application on your behalf.
How to apply
- Status
- Open continuously
- Round restrictions
- Applications must go through an authorized car dealership.[^c6]
Choose the car and contact an authorized car dealership. The dealer submits the electronic financing application to Arion Bank. You sign the loan on your phone, and it is registered electronically. Applications are available throughout the year.
Use the bank’s car-loan calculator to compare the monthly repayments for your purchase price and loan term.