Globally, automotive manufacturers are looking for ways to produce environmentally sustainable and recyclable materials for automobiles to meet new regulations and customer desires. To enable the needs for rapid response, this study investigated the feasibility of using waste and virgin wool fibres as cost-effective and sustainable alternatives for automotive sound and heat insulation using a chemical-free approach. Several properties of the currently available commercial automotive insulators were investigated in order to facilitate the designing of green wool-based needle-punched nonwoven materials. The effect of fibre diameter, nonwoven surface, layer structure, thickness, and area density on sound absorption and thermal resistance was investigated. The results suggested that the wool nonwoven materials, fabricated using waste and virgin wool fibres, possessed extremely efficient acoustic and thermal insulating properties comparable with the currently used commercial synthetic insulating materials. Besides, the wool nonwoven materials showed identical antibacterial and antifungal properties with a greater biodegradation rate (50%) than that of the commercial synthetic insulating materials. Hence, this study showed that natural wool fibres have the potential to be used as green, lightweight, and sustainable materials in the automobiles, while they qualify for Reuse–Recycle and Reuse–Recover purposes at the end-of-life of vehicles.