Overdrive Funding arranges competitive business vehicle finance for Australian businesses. We compare 80+ banks and specialist lenders, negotiate the deal and manage everything from start to finish.
Buying a used business vehicle privately usually gets you a better price than a dealer forecourt. But two things — GST and the PPSR — can quietly erase that saving, and both catch buyers out.
The GST trap on private sales
This surprises people constantly. If the seller is a private individual not registered for GST, no GST is charged — which means there is no GST credit for you to claim in your BAS. Buying from a dealer or a GST-registered business usually means GST applies and you can generally claim it back under a chattel mortgage.
So a vehicle $5,000 cheaper privately may not actually be cheaper once the unclaimable GST is counted. Run that number before you assume private wins. Your accountant can confirm your position.
The PPSR trap
A vehicle sold privately may still have money owing on it. If there is a finance encumbrance registered on the Personal Property Securities Register, the financier retains a security interest — and in the worst case you pay the seller and the vehicle is later repossessed for their debt.
A PPSR search reveals any registered interest. When you finance a private purchase through a lender, this check is part of the process and the lender pays out any existing encumbrance directly from settlement funds before the seller receives the balance. That is a genuine advantage of financing a private buy rather than paying cash.
How private sale settlement works
The lender pays the seller directly. You provide the seller's details and bank account, the lender completes its PPSR and ownership checks, pays out any encumbrance, and transfers the balance. Tell the seller upfront that the purchase is financed — some expect immediate cash and get uneasy about a process they have not seen. Being pre-approved before you negotiate keeps the deal together.
What a dealer gives you
Statutory warranty in most states, a roadworthy, cleaner paperwork, GST you can generally claim, and a trade-in if you have one. That is worth something — the question is whether it is worth the margin. Often on a late-model vehicle it is; on an older one it frequently is not.
Rates and deposits
Established ABN (2+ years), new vehicle, full doc
Established ABN, used vehicle, low doc (no financials)
Newer ABN (under 12 months)
Prior credit issues or specialist lending
| Borrower profile | Indicative rate | Typical deposit |
|---|---|---|
| Established ABN (2+ years), new vehicle, full doc | From 6.1% | $0 – 10% |
| Established ABN, used vehicle, low doc (no financials) | 7% – 10% | 10% – 20% |
| Newer ABN (under 12 months) | 9% – 12% | 10% – 30% |
| Prior credit issues or specialist lending | 12% – 15% | 20% – 30% |
Rates are indicative only and subject to lender assessment, the vehicle, term and your individual circumstances. Low doc (no financials) business vehicle finance is available up to $300k for the right profiles.
Get a quote
Looking for the best rate on business vehicle finance? You're in the right place. Speak directly with Simon and our team for a free, no-obligation quote, or get a free quote online. Our service is completely free. We're paid by the lender only after a deal settles, so there's no cost to you—even if you choose not to proceed.