The Best Finance Option For Business Owners In Need Of A Car

Chattel Mortgage also known as a secure car loan is a property loan in which we provide you with the funds you require to purchase a car. However, while you take ownership of the car once it is purchased, we take a “Mortgage” over the car as surety for the loan. Although, once the terms of the agreement are completely met, you’ll own the car fully.

Unlike other finance options where you cannot claim ownership of the car until you’ve finished the payment, with a Chattel Mortgage, the car is yours outrightly. You’re however mandated to pay off the loan from the income the car generates for your business.

If you’re unable to meet the agreement of the mortgage, we have every right to lay a claim and repossess the car.

A Chattel Mortgage is ultimately a type of loan contract in which the purchaser borrows funds for the purchase of moveable personal property from the lender.

We offer you a Chattel Mortgage that would enable the purchase of a car without paying any deposit. The only surety required is the car itself. This option is best for you if:

  • If you intend to use the car mainly for business.
  • If your business has a valid Australian Business Number.

Chattel Mortgage with or without dispossession

There are two types of Chattel Mortgage, there’s one with dispossession and one without.

Chattel Mortgage with dispossession

With this type of mortgage, you have to transfer the property to your creditor before obtaining the loan. The fees associated with this type of mortgage is usually very high and it is important that you understand the terms and conditions of the contract before agreeing to it.

Chattel Mortgage without dispossession

In this case, you do not need to leave a collateral property with your creditor before obtaining the loan. There are however certain conditions to be met like maintaining insurance on the property.

Purpose of a Chattel Mortgage.

  • It is a great source of short-term finance.
  • Individuals can obtain loans by their cars as surety to pay off the loan.
  • People with bad credit histories can easily obtain it.
  • It can be used as a means of finance for new business projects.

Why you should choose our Chattel Mortgage.

There are many things to benefit from choosing our Chattel Mortgage

  • Low-Interest rate.
  • Structured repayment plan
  • Balloon payment advantage
  • Reclaim on interest and depreciation
  • Tax-deductible interest.

The Balloon Payment Advantage

Our Balloon Payment option is available to you if you so consider keeping your repayment low till the end of the contract and put the money into your business instead.

The Balloon payment is simply you not paying a large amount of money until the end of the agreement thereby, keeping your monthly repayment as low as possible in the initial stage of the agreement.

This means that at the end of the agreement, you’ll be paying back a lump sum usually a lot higher than the amount you paid in the initial repayments.

Benefits of Balloon Payment

  • Lower monthly repayable amount.
  • Low or no initial payment.
  • Access to affordable short-term capital
  • Help cover financing gap

What to do when you Balloon Payment Falls

  • Pay the full repayable amount.
  • Trade in your car for a new one.
  • Refinance the balloon payment and keep your car.

Tax Benefits of a Chattel Mortgage

There are several tax benefits that come with a Chattel Mortgage. These Benefits include:

  • GST on initial purchase: Goods and Service Tax commonly known as GST is a form of value-added tax usually incurred on purchased goods and services. With a Chattel Mortgage, you can claim the initial GST credit paid when you purchased the vehicle as an Input Tax Credit. This is made possible by registering your business to collect Federal Government GST through your Business Activity Statement (BAS).
  • Tax deductions for interest payment: It is possible to claim the interest payment on your Chattel Mortgage as a tax deduction. This is possible if you’re eligible to claim the interest charges on your next annual tax return.
  • Tax deductions for depreciation: It is also possible to claim the depreciation of the vehicle value as a tax deduction. However, it is important that you consult a tax professional to find out about your current depreciation limit and the requirement of the Australian Tax Office (ATO).

Your Frequently Asked Questions

Can I pay out a Chattel Mortgage early?

Yes, you can always pay early but there will generally be an extra cost.

Who can get a Chattel Mortgage?

Any registered business owner can get a Chattel Mortgage as long as their credit history is good enough for it.

What’s the difference between the lump sum and other repayments?

The lump-sum is usually about two times the price of your initial low repayments.

Do I get to keep my car?

Yes, at the end of the agreement, after all the payments are made, your car is yours to keep.

Disclaimer: Terms and Conditions apply. This information has been put out as general material for your consideration without taking into account your objectives, financial situation or needs. No liability is accepted for errors in presentation or the interpretation of facts or analysis of information available in the public domain.

Before making a decision, individuals are advised to take into account their objectives and financial situation and also consult with their financial advisors and accountants for specific advice regarding their individual situations.

Click here to enquire about the Chattel Mortgage option available for you.