Key Business Car Loan Considerations
The right car loan in Melbourne 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 provided by novated leases
- The finance term (which usually ranges from one to seven years)
- 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.
How ARG Finance 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 car finance broker in Melbourne 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 a car loan in Melbourne. You can also use our car loan borrowing calculator to calculate your car loan borrowing power.