Buying Volvo C40, BMW iX, or BYD Atto 3? There's a smarter way to finance your EV purchase

Electric vehicles (EVs) are fast becoming the new trophy to have. Yes, it’s always nice to have a BMW 7 Series but combustion engine cars, regardless of their status, are now seen as kind of passé.

The conversation starters at the golf club’s lounge have moved from V8 cars to high-end EVs, simply because spaceship-inspired EVs have a novelty factor that even flat-six turbocharged sports cars don’t have.

If you run a business, especially a technology-related one, you will understand the need to maintain a technologically progressive image, so a high-end EV is now almost like a necessary business car today.

At the recently concluded RHB DRIVE Premium & EV Roadshow at Pavilion Bukit Jalil, five of the most popular EV models were put on display, for prospective buyers to compare them side-by-side - the MINI Electric, Volvo XC40 Recharge, Volvo C40 Recharge, BMW iX3, and BMW iX.

All new EV models sold in Malaysia are eligible for a green financing package by RHB, tailored specifically for the needs of EV buyers.

The BMW iX is the one most aspire to own. It’s currently Malaysia’s most popular (and therefore most trusted) premium EV model, and it’s easy to see why.

Prices start from RM 403,800 for the xDrive40 variant, which is a similar asking price for a 530i M Sport (from RM 410,800). Between a 5 Series and an iX, it is obvious which is a better choice, especially if you already have another combustion engine car at home.

The iX is available in three variants:

• iX xDrive40 at RM 403,800 – 76.6 kWh battery, 425 km, 326 PS / 630 Nm
• iX xDrive40 Sport at RM 447,800 – Same as above but with Laserlight, panoramic sunroof, crystal and wood interior, Harman Kardon sound system
• iX xDrive50 at RM 546,800 - 111.5 kWh battery, 630 km, 523 PS / 765 Nm

The BMW iX is built on a dedicated EV-only platform, meaning that the vehicle's packaging is optimized for EV applications, since there is no need to make compromises to accommodate mechanical combustion engine components.

It supports up to 11 kW of regular AC charging, and up to 150 kW of DC fast charging.

While the BMW iX is the crowd puller, many will settle for the relatively lower priced BMW iX3, which starts from RM 322,800, or even the Volvo XC40 Recharge, which starts from RM 278,888. The XC40’s coupe-ish twin the C40 Recharge, which is priced just RM 10k more, will also be on display.

The pair of Volvos make a lot of power for their asking price - 408 PS and 660 Nm from the 78 kWh battery. The regular SUV body XC40 Recharge has a 438 km range (WLTP) while the sportier sloping roof C40 Recharge can do 450 km. 

Below the RM 200k mark, there’s the trendy MINI Electric, which starts from RM 196,876.

Younger generation buyers who grew up with Chinese smartphones and have little affliction to the traditional century-old hierarchy of automotive brands will be interested to test drive the BYD Atto 3, which starts from RM 149,800, as well as the Ora Good Cat, which starts from RM 140,500.

BYD is fast becoming the common person’s Tesla. It uses the company's famed LFP 'Blade' battery, which is claimed to be more robust and safer against fires than conventional NMC-type batteries. 

The Ora Good Cat is Malaysia’s most affordable (and some say best-looking) EV. If it looks like a cuter Porsche, that's because it is styled by ex-Porsche designer Emanuel Derta.

Regardless of your budget and brand preference, all EV models mentioned above are eligible for RHB Green Financing, a pioneering daily rest variable rate hire purchase that is almost unmatched by traditional fixed rate financing offerings from rival banks.

Like smartphones, EVs are not something that you want to keep for very long, especially once the manufacturer’s 8-year battery warranty expires. This RHB Green Financing is tailored specifically for EV buyers who want the latest in technology financed at an attractive rate, with flexible instalment commitment of up to 9 years.

RHB’s Green Financing’s profit charges (which is a non-compounding financing charges compared to conventional interest charges) are calculated using the reducing balance method, just like home loans/financings. In simple terms, this means that the more you pay in your monthly instalments, the faster you clear off the balance, the less you pay in total financing charges.

With a traditional fixed rate hire purchase, you pay very high interest charges up front because such products use the flat rate method to calculate, meaning that even if you were to make an early settlement, the potential rebates you get is a lot less.

This is because the flat rate method allows the bank to apportion the bulk of the monthly instalments towards servicing the interest charges first, before clearing the principal sum borrowed.

On a 9-year financing, you will spend the first 3 years paying more than 60 percent of the interest charges before making the smallest dent to the principal sum financed.

Also read: Take a lower interest 9-year car loan, put the rest in FD, but settle early? No, it doesn't work that way, here's why

With a variable rate product’s reducing balance method, this doesn’t happen. The more you pay every month, the cheaper your car’s financing cost becomes, and if you make an early settlement, you genuinely save on financing charges.

Not only that, but you are also rewarded with greater savings the sooner you pay your instalments every month. This is because RHB’s Green Financing is a daily rest product, meaning that customers who pay their monthly instalments early in the month, as opposed to waiting until the end of the month, will see even more savings.

Is there a catch? The profit rate (to calculate the financing charges) of variable rate products will move in tandem with the bank’s prevailing base rate. So in some months you may pay more than a traditional fixed rate product.

The counterargument is that with a longer 9-year tenure, the ups / downs in interest rate (or ‘profit rate’ for RHB’s Green Financing products) will average out. Combine it with the reducing balance method that genuinely rewards buyers who make an early settlement, as opposed to a fixed rate product’s unattractive reducing balance method, it’s a perfect financing option for EV buyers who don’t want to keep their cars past the manufacturer’s warranty period.

Since the calculation methods are different, customers can’t make a one-to-one comparison with interest rates of traditional fixed rate products.

However, RHB says that assuming a buyer borrows RM 300,000 with a 9-year long tenure, the variable rate Green Financing product has an equivalent rate of just 2.05 percent on a fixed rate product – an extremely low rate that’s not possible in the current high interest rate environment.

Even if you are buying a lower priced model like the circa RM 140,000 Ora Good Cat, the variable rate offer is still just as attractive - as low as 2.05 percent for a 9-year tenure (with RM 20,000 downpayment), or equivalent to an unusually low 2.22 percent on a traditional fixed rate product.

If the buyer pays RM 1,400 every month instead of the minimum RM 1,317, the tenure can be shortened by up to 6 months. This is not possible with a traditional fixed rate product.

Even if the customer doesn't pay extra, RHB's own simulation shows that monthly payments for the variable rate product is still cheaper by RM 17 every month - enough for a free Spotify subscription every month.

If you are asking whether the manufacturer’s leasing contract offers the same no-longterm commitment benefits, the simple answer is that all leasing contracts have an annual mileage cap and when you return the car, you need to sign up a new contract to lease another model from the same brand. Obviously, there are no such limitations when you finance your EV with RHB.

When taking a financing, very rarely can you have the cake and eat it too. RHB Green Financing is one of the few exemptions. You get the benefits of a very attractive financing rate and a maximum of 9-year tenure, but none of the shortcomings when you decide to make an early settlement and sell the car when a new generation EV model captures your attention.

Buyers who sign up for RHB Green Financing during this promotion period will also benefit from a free 1-year membership of ChargEV worth RM 240. If you plan your trips well, you can theoretically ‘refuel’ for free, for one year.

More information can be found here. 

This post is sponsored by RHB.