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Chattel mortgages with CarClarity

If your vehicle is used for business at least 51% of the time, CarClarity can help you secure a chattel mortgage to finance a new vehicle or equipment for your business. The loan provider will use the vehicle as the security for your loan.
There are also tax benefits, the goods and services tax (GST) inclusive purchase price of the car or equipment is financed, and you’re entitled to claim an input tax credit up-front.

What is a chattel mortgage?

A chattel mortgage is an older term that refers to a business loan to purchase moveable property (the chattel) from the lender, such as business vehicles or cars. The lender then secures the loan with a mortgage over the chattel. Legal ownership of the chattel is transferred to the purchaser at the point at which it is purchased. The mortgage is then removed once the loan has been repaid. It's much like a fixed rate traditional home loan or mortgage.

Chattel mortgage vs. other types of loans

Chattel mortgages are different to other types of loans. How? Lets look at a hire purchase loan as an example. Hire purchase loans are designed for you (the borrower) to rent a vehicle or car from a lender and pay for it with regular installments. Once the loan is paid in full, you now own the vehicle or car. Another example could be a finance lease (also known as a capital lease or sales lease) where the financier (lender) owns the vehicle or car (an asset) for the duration of the lease. You (the borrower) not only has operating control over the asset during the lease, but also maintains the option to acquire ownership of the asset at the end of the lease. Though there are similarities between the two, the main difference between a financial lease and a hire purchase are different accounting treatments and tax implications.

The benefits of a chattel mortgage car loan for business

Benefit 1

Compared to an unsecured loan e.g. a consumer car loan, a chattel mortgage for cars typically has lower Interest rates.*

Benefit 2

Using a chattel mortgage will give you ownership of your vehicle from the start, so it will appear as an asset for your business as well as a liability (the loan). This is not the case for a hire purchase or a finance lease, as you don't own the vehicle until all repayments are paid in full.*

Benefit 3

Chattel mortgages may have some accounting treatments and tax benefits. You're entitled to claim an input tax credit up front, in addition, you may be eligible to claim interest and depreciation costs depending on how much your car or equipment is used.*

Benefit 4

Businesses with a chattel mortgage may claim interest charges as deductions on your Business Activity Statement. (BAS.)*

Benefit 5

Mortgage repayments can be fixed. Rates also have the potential to be structured to suit the cash flow of your business.*

Benefit 6

You have the choice and flexibility to set a balloon payment at the end of the term. This gives your business the ability to decide whether you’d prefer to keep your monthly repayments down by paying more at the end of the term.*

Benefit 7

Repayments can be structured over a range of terms. Typically between one to seven years.*

* This is general advice only, please seek advice from your accountant regarding your circumstances and tax impacts.

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Getting the right chattel mortgage

Our loan matching technology will review your requirements to find your top 3 loan options from over 1000 financial products. We are experts in ABN loans, commercial vehicle loans, chattel mortgage car loan and can help you accelerate your business with great finance for your next vehicle.
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CarClarity is committed to helping Australian businesses. Our expert team will save you time and money with competitive business car finance. Whether it’s finding you the right commercial vehicle or helping you get a better car loan deal, our team is always around to help.

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Frequently asked questions

How much can I borrow?

Current lenders have capacity to finance commercial vehicles from $5,000 up to $250,000. Individual and business circumstances may affect the maximum loan amount.

Do I need a deposit to take out a business car loan?

No. A deposit is not required for a commercial car loan.

Are all vehicles eligible for the instant asset write off?

Certain types of vehicles are eligible for the Australian Government’s instant asset write off. If eligible, the asset may be written off immediately and a tax deduction claimed for the business portion of the purchase cost. Learn more about the ATO’s instant asset write off.

Can I claim a tax deduction on my business vehicle?

You may be eligible to claim a tax deduction on your business vehicle depending on the vehicle, company structure and vehicle usage. Learn more about claiming a tax deduction for motor vehicle expenses.

Have more questions? Check our FAQ page or talk with our experts.
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Things you should know

CarClarity is an online financial comparison service and is owned and operated by CarClarity ACL Pty Ltd ABN 50 606 243 243 / ACN 606 243 243 and Australian Credit License 478 874.
CarClarity provides you access to our expert team who can assist in selecting suitable car loans from our panel of 30+ lenders and over 1000 financial services products. The financial products compared on this website do not necessarily compare all features that may be relevant to you and CarClarity does not compare all rates in market.
All applications are subject to the credit provider’s credit assessment and loan eligibility criteria. Terms, conditions, fees and charges apply. Information provided is factual information only, and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser. CarClarity may receive a commission from lenders we recommend.