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Chattel Mortgage for Cars

What is a Chattel Mortgage?

Put simply a chattel mortgage is a loan where the item purchased (the "chattel") is the security for that loan. In world a Chattel Mortgage allows the borrower to use the bike, car, truck or other motor vehicles as the security for the loan until the loan and any balloon payment is paid out.

Chattel Mortgage Rates

Our Chattel Mortgage rates vary depending on your circumstances. If you need up-to-date information about chattel mortgage rate please contact us.

Benefits of a Chattel Mortgages for Businesses

A chattel mortgage allows businesses the flexibility of setting the loan term and residual values. Businesses may also claim back the GST contained in the vehicles purchase price as an Input Credit on their next BAS rather than over the course of the loan. Businesses may also claim tax deductions for the depreciation of the vehicle over its' lifetime and the interest charged on the loan for the term of the contract.

Chattel Mortgage VS Hire Purchase

As of July 1st, 2012 there were changes to the commercial hire purchase tax rules. Currently, a Commercial Hire Purchase is fully taxable, meaning that GST on fees and interest are payable. This amount is payable on settlement of the agreement and can be paid upfront or added to the value of the loan. For some businesses, this is not a desirable situation as it increases the monthly payment for a commercial hire purchase agreement and the total GST payable.

Chattel mortgages, on the other hand, have remained unchanged in regards to GST payable, so monthly payments of a Chattel mortgage will essentially be cheaper than commercial hire purchase agreement and GST payable on the purchase price of the vehicle will be claimable when the businesses lodges their next BAS.

Other Car Finance Options for Business

If you are looking at purchasing a vehicle or a fleet of vehicles for your business you may also consider commercial hire purchase or car leasing options all of which Car Finance and Bike Finance can help you with. These two alternatives to a chattel mortgage come with their advantages to suit the size and accounting needs of various businesses. If in doubt give us a call 1800 880 078 or use the online contact form and we can help you make a decision about your business car finance options.

We can provide car finance to businesses in all major cities including: Sydney, Perth, Melbourne, Brisbane and the Gold Coast. We also provide commercial car finance to individuals all over Australia, including in regional areas. Call us on 1300 88 00 78 or apply online.

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