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Car Loans

Car loans can be obtained for business or private use. If you need financing for a business vehicle, there are different options available, including:


A novated lease can be taken out on a new business vehicle as part of a tax-effective salary packaging arrangement for you or your staff. Ownership of the vehicle remains with the lender. Repayments are deducted from you or your employee’s before-tax salary.


A chattel mortgage is another option for financing a new business vehicle. It involves a lender providing you with a loan that is secured against the vehicle via a mortgage. Chattel mortgage interest and fees on a business vehicle are tax-deductible against business income.

However, it’s important to understand that like any secured loan, the lender can repossess a vehicle under a chattel mortgage arrangement if you default on your regular loan repayments. When you have repaid the loan in full, the lender releases the mortgage.


A hire purchase agreement for a business car involves you hiring it from the lender for an agreed term. When you make your last hire payment, the ownership of the vehicle transfers to your business.

Key business car loan considerations

The right car loan option will depend on your individual business needs and financial situation. Key considerations include:

  • interest rates, fees and other finance terms and conditions,
  • repayment flexibility to suit your business’ cash flow,
  • the potential tax benefits provide by novated leases,
  • the finance term (which usually ranges from one to seven years),
  • and whether it’s better to own or lease your car. For example, leasing your vehicle may allow you to upgrade more easily when the lease term expires.

What is a residual (balloon) payment?

A residual (balloon) payment is a way that you can reduce your car loan repayments during your finance term, in return for making a single larger (balloon) payment at the end of the term.

For example, if you borrow $40,000 for a new business vehicle via a five-year chattel mortgage, you could arrange to pay $30,000 over five years with regular monthly repayments, and a single $10,000 residual (balloon payment) at the end of the five-year term.

However, if you structure your repayments like this, it’s important that you structure your business finances to ensure that you can afford the final residual (balloon) payment amount.

Information that you need to apply for business car financing

You’ll need to supply the following information when you’re applying for business car financing:

  • vehicle details (including make, model, year, color, VIN number, engine number, registration number, and the purchase price),
  • and your business’ financial information to demonstrate your ability to make your repayments.

How we can help

Car financing is an important decision for many businesses, especially if you have a fleet of

vehicles. It’s important to understand the pros and cons of different car financing options so that you can choose the most appropriate one for your business.

It’s also important to understand that even a small difference in the terms and conditions of a car-financing option can make a big difference to your repayments and to your business’ cash flow.


At ARG Finance, our experienced team of car finance brokers can help you to find the right option. We’ll take the time to understand your business’ needs, goals and financial circumstances before recommending an appropriate lender and car-financing option for you.

Contact us today to find out how we can help your business with car financing!

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