Four Ways to Finance a Business Car
If the vehicle is a dual-cab or work ute, use the Ute Finance Australia guide to compare lender-fit factors, borrower pathways and model-specific considerations before choosing a structure.
If the vehicle itself is not yet settled, research business-use cars and indicative repayments at BaseRate, another Velocity Works service. Use this AFA guide to decide how the business should own or lease the selected vehicle.
| Structure | Consider When | Ownership Path | Potential Tax Treatment* | Editorial Range* |
|---|---|---|---|---|
| Chattel Mortgage | Business ownership and long-term retention matter | Business owns; lender takes security | Eligible GST credit, interest and depreciation may be available | 6.29%–9.49% |
| Finance Lease | A residual and end-of-term option fit the replacement cycle | Financier owns during the term | Eligible business-use payments may be deductible | 6.79%–10.49% |
| Operating Lease | Return flexibility, fleet rotation or bundled services matter | Financier owns; return conditions apply | Eligible business-use payments may be deductible | 7.49%–10.99% |
*Tax outcomes depend on current law, business use and the taxpayer. Ranges checked 9 August 2026; they are planning inputs, not quotes, offers or comparison rates.
Chattel Mortgage (Commercial Goods Loan)
The most popular choice for GST-registered business owners. You take ownership on day one, the lender provides a secured loan, and you repay over 1–7 years. Most banks now call this a commercial goods loan.
Why It's Popular for Business Cars
- GST: An eligible upfront credit may be available to the creditable business-use extent and subject to the car limit.
- Depreciation: Eligible decline in value may be deductible, with private use apportioned and the car limit considered.
- Instant asset write-off: Do not assume it applies; legislation in force, cost, use date, turnover and other tests must all be checked.
- Balloon: A lender-approved balloon can reduce scheduled payments but increases the end obligation and total interest.
Compare Business Car Finance Rates
Tell us the car, business use and preferred term so relevant structures can be compared. Enquiring is not a lender application or approval.
Get a Free Quote →Finance Lease
The financier owns the car during the term. You make lease payments (potentially deductible, subject to current law and circumstances) and pay a mandatory residual at the end to take ownership. Good for businesses that want simpler tax treatment than a chattel mortgage.
- A residual can reduce scheduled payments but creates an end obligation
- Tax treatment depends on business use and the contract
- Accounting treatment must be assessed under the applicable reporting framework, including AASB 16 where relevant
Operating Lease (Fleet & Short-Term)
A true rental — use the car and return it at the end. No residual, no disposal risk. Running costs can be bundled. Ideal for company fleets where you want predictable costs and regular upgrades.
- Scheduled payments may be lower where the lessor retains residual risk; total cost can still be higher
- Accounting treatment is contract- and reporting-framework-specific
- Return conditions, excess-use charges and early-exit costs must be compared
- Can suit defined replacement cycles and fleets
Worked Example: $60,000 Business Car
A GST-registered sole trader finances a $60,000 (inc GST) Toyota HiLux SR5 over 5 years at 6.5%:
| Metric | Chattel Mortgage (20% Balloon) | Finance Lease (20% Residual) |
|---|---|---|
| Purchase Price | $54,545 (ex-GST) | $60,000 (inc GST) |
| Modelled GST Component | $5,455 at purchase | ~$91/month across payments |
| Monthly Payment | ~$941 | ~$1,035 |
| Tax Outcome | Not calculated: business use, car limit, entity and law must be confirmed | |
| End of Term | $10,909 balloon | $12,000 + GST |
Illustrative repayment scenario only, excluding lender fees and tax advice. The GST figures are components, not confirmed entitlements. Test different finance assumptions.
Tax Tips for Business Cars
- Keep a logbook: For mixed-use vehicles, the ATO requires a 12-week logbook to establish business use percentage. Only the business portion is deductible.
- Luxury Car Tax (LCT): Check the ATO threshold for the income year and whether the vehicle is a car for LCT purposes; some commercial vehicles are treated differently.
- Car limit: Passenger vehicles may be subject to the income-tax depreciation and GST credit limits. Confirm the value published for the income year rather than reusing a prior-year figure.
- Instant asset write-off: The previously enacted $20,000 extension ended on 30 June 2026. Later proposals must not be treated as law until enacted. Check the current status.
- Electric vehicles: EVs below the LCT threshold may be FBT-exempt when provided as employer fringe benefits. EV finance guide →
Calculate Your Business Car Repayments
Enter the car price, choose your structure, and see repayments + tax savings instantly.
Open Calculator →How to Apply
- Choose your car — new or used, from a dealer or private sale.
- Get a quote — submit your details and we'll Compare suitable lender options.
- Provide documents — ABN, ID, and asset details. For amounts under $250K, many lenders offer low-doc approval.
- Timing: Assessment and settlement timing depends on the lender, application completeness, asset and seller checks.
- Drive away — the lender pays the dealer and you take delivery.
Borrower Profile Pathways
Different entity types can use similar structures, but lenders assess evidence and servicing differently. Start on the page that fits your profile.
Business Vehicle Finance
Compare cars, utes, vans and fleet pathways.
Sole Trader Vehicle Finance
ABN evidence and mixed-use tax handling.
Company Vehicle Finance
Pty Ltd structure and guarantee considerations.
Trust Vehicle Finance
Trustee setup and borrowing documentation.
New ABN Vehicle Finance
Startup approval pathways and deposit strategy.
Low Doc Vehicle Finance
Alternative evidence options for self-employed borrowers.
Buying and Refinance Scenarios
Use these scenario pages when deciding where to buy, how to structure ownership, or whether to refinance an existing vehicle facility.
Private Seller Vehicle Finance
How private-sale deals are assessed and settled.
Dealer Finance vs Business Finance
Compare convenience, pricing and flexibility.
Business Loan vs Chattel Mortgage
Secured vehicle lending versus unsecured working-capital debt.
Lease vs Chattel Mortgage
Ownership-first versus lease-first decision framework.
New vs Used Business Vehicle
Asset age, lender policy and lifecycle cost guidance.
Business Vehicle Tax Guide
GST, depreciation, and deduction fundamentals.