The Smarter Way to Get A Great Deal on Chattel Mortgage Car Finance!
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What Is Chattel Mortgage?
A chattel mortgage car finance is a popular option for business owners and sole traders who are purchasing a vehicle primarily for business use. With this type of finance, the lender provides the funds for the purchase, and you take ownership of the vehicle right away. The car itself is used as security for the loan.
One of the key advantages of a chattel mortgage is the significant tax and GST benefits it offers. For eligible businesses registered for GST, the GST on the purchase price can often be claimed as an input tax credit on your Business Activity Statement (BAS). Additionally, interest charges and depreciation on the vehicle may be tax-deductible.
This structure makes a chattel mortgage a smart and cost-effective option for business-related vehicle purchases. It also offers flexible loan terms, balloon payment options, and the ability to manage your cash flow more efficiently.
If you’re a business owner looking for car finance that supports your financial strategy, a chattel mortgage is well worth considering.
Why Choose a Chattel Mortgage?
A chattel mortgage can be a flexible way to finance business vehicles and other eligible assets, with loan terms commonly ranging from 2 to 5 years. Depending on the lender and your circumstances, you may be able to choose a repayment structure that suits your business and cash flow.
Interest rates and loan terms vary between lenders, but a chattel mortgage may offer competitive rates compared with some other forms of business finance. Repayments can be structured to suit your circumstances, including the option of a fixed or variable rate where available.
With a chattel mortgage, you generally own the asset from the outset, while the lender holds a mortgage over it as security for the loan. The asset and corresponding finance are recorded in your business accounts in accordance with your accounting treatment.
You may also be able to include a balloon or residual payment at the end of the loan term. This can reduce your regular repayments, although it means a larger amount will be payable at the end of the term.
With flexible structures and a range of lender options, a chattel mortgage can help businesses acquire the assets they need while managing cash flow.
Benefits of Chattel Mortgage Car Loan:
- Chattel Mortgage Car Finance Is a Secured Loan Which Could Mean A Lower Interest Rates
- To Some Buyers 100% Financing Options May Be Available
- Terms Spanning Two to Seven Years
- Depreciation, Interest Payments and Running Costs May Be Tax Deductible
- GST Benefits for Registered Businesses
Why Choose eCarz?
- Customised Finance Solution That Suits Your Needs
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- Fast approval process for eligible applicants.
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Chattel Mortgage Car Finance FAQ's!
A Chattel Mortgage car loan is a type of business vehicle finance where the lender provides funds for a car or other vehicle, and the borrower takes ownership at the time of purchase. The lender uses the vehicle as security (the “chattel”) until the loan is paid off. It’s a popular choice for businesses and self-employed individuals because of its flexibility and tax benefits.
Chattel mortgages are available to:
Businesses (small or large)
Sole traders
Partnerships
Companies
ABN holders using the vehicle for business purposes
The key requirement is that the vehicle must be used at least 50% for business use.
Immediate vehicle ownership (you own the car from day one)
Potential tax deductions (interest and depreciation may be tax-deductible)
Claim the GST on the purchase price upfront if you’re registered for GST
Flexible loan terms and repayment structures
Option to add a balloon payment to reduce monthly repayments
A balloon payment (or residual value) is a lump sum due at the end of the loan term. It helps lower your monthly repayments, but you’ll need to pay or refinance it when the loan ends. It’s commonly used in chattel mortgages to improve cash flow during the loan term.
Yes! If you’re a self-employed individual or small business owner without complete financials, you may still qualify through a Low Doc Chattel Mortgage. This allows you to apply with minimal documentation, using BAS statements, bank statements, or an accountant’s letter.
Yes. Unlike a lease, with a chattel mortgage you own the vehicle outright from day one. The lender simply holds a mortgage over it as security until the loan is repaid in full.
In most cases, yes—many lenders allow early repayments, although some may charge a small early termination fee. Always check your contract for the specific terms.
You can use a chattel mortgage car loans to finance:
Cars
Utes
Vans
Trucks
Motorbikes
Even equipment or trailers, depending on the lender
As long as it’s for business use, a wide range of assets can be financed this way.
Need Help with a Chattel Mortgage Car Loan?
At eCarz, we make business vehicle finance easy. Whether you’re looking for a new work ute or upgrading your fleet, we’ll guide you through the best options and secure a deal that fits your budget—even if you’re applying low doc.
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