A Chattel Mortgage is the most common finance product for a business use vehicle purchase. By purchasing using this product you will take ownership of the vehicle and can qualify for a number of important tax benefits – see below.
How much can I borrow ?
- Borrow up to 100% & $150,000 of the vehicle price for long-term ABN holders (conditions apply – see ABN Express Product)
- Borrow up to 80% & $100,000 of the vehicle price for short-term ABN holders (less than 2 year ABN)
- Borrow up to 100% & $150,000 of the vehicle price for business-use employees (with full income verification)
What do I need to get approved?
- You’ll need a clear credit file
- Ability to verify business use for the vehicle (either via an ABN or if employed – employment letter or car allowance on payslips)
- Vehicle will need to be no older than 10 years old (at the end of the loan term)
- You’ll need to provide details of your employment or income
- If your ABN is less than 12 months old or you can’t verify the car is for business use then you can look at a personal car loan option
Interest rates from:
4.59% | 5.36%* p.a (Comparison Rate)
We have over 12 lenders available from major banks to specialist commercial vehicle lenders
Discover if you qualify:
We can help you with a Chattel Mortgage approval anywhere in Australia
ABN Express Product - How do I qualify?
Benefits include: No financials required and approval in under 4 business hours.
To qualify, you will need to meet the following criteria:
- Purchase through a valid ABN that’s active for atleast 2 years
- Ensure the ABN is GST registered (no minimum period)
- Atleast 1 director or borrower must own property (home or investment property)*
- Clean credit file
*If you don’t own property you can still use this product however you will need to pay a 20% deposit
What are the benefits of a Chattel Mortgage?
Benefit 1: Lower interest rates (and fees)
- Cheaper interest rates than a consumer car loan
- You won’t be charged monthly account keeping fees (with our lender panel)
- You’ll avoid paying high rates and fees at the dealership
Benefit 2: Lots of tax benefits
- Instantly claim the GST paid on your car in your next BAS statement
- Depreciation of the vehicle can be claimed at tax time (for the business use percentage)
- Interest and running costs can also be claimed
Always confirm with your tax agent first as to the specific tax benefits to you, this is a general guide only.
Chattel Mortgage vs Hire Purchase
This is a common question so we thought we’d list the key differences below to assist you in weighing up the best solution for you.
You will take ownership of the vehicle using the vehicle as the security
As you take full ownership you will be able to claim the full input tax credit on your next BAS for a GST rebate
You therefore won’t pay GST on each repayment as this is accounted for upfront
The lender will purchase the vehicle and ‘hire’ or lease this to you for a fixed term and repayments
As the lender owns the vehicle you will not be able to claim the full GST rebate upfront but over the course of the lease agreement
You won’t have quite as much flexibility on putting down an upfront deposit or lease structuring terms
Overall, the most commonly used product is the Chattel Mortgage as most owners prefer to own their assets for more control, more depreciation benefits and more flexibility in the transaction.
What if I'm not self-employed or an ABN holder?
That’s perfectly okay – if you don’t hold an ABN you can still secure a Chattel Mortgage if you use your vehicle for work.
You will just need to provide another form of verification that you will be using your car for business or work in the form of one of the below:
- An Accountant’s Letter confirming the vehicle will be used predominantly for business use
- Showing payslips with regular car allowances
- Provide an employment letter confirming the vehicle will be for work or business use
- Show a previous tax return (most recent) showing deductions on your previous vehicle for work use
You will still receive all benefits of the Chattel Mortgage (ownership, lower rates and fees and flexible term options) however you won’t receive the potential GST rebate benefits.
Speak to our team today by completing a FREE Assessment form and we can happily advise your suitability for this.
Applying for a Chattel Mortgage.
If you need advice and the best options for a Chattel Mortgage, please speak to us!
We’ll give you a thorough overview of your position and the most competitive options available to you in the market.
Complete a Quick Quote to get started with our team today.