Key highlights
- You own the vehicle from the outset
- Lender takes a mortgage over it as security
- Popular for cars, utes, vans and light commercials
- May not suit everyone versus lease or hire purchase
- 80+ lenders compared through one broker
A chattel mortgage is one of the most common ways Australian businesses finance a vehicle, yet the name can sound more complicated than it is. Understanding how it works helps you decide whether it suits your business. Here is a plain explanation.
What is a chattel mortgage?
With a chattel mortgage, the lender advances funds to buy the vehicle and takes a mortgage over it as security while you own it from the outset. Once the loan is repaid, the security is released. The vehicle, or chattel, is the asset securing the arrangement.
Why do businesses choose a chattel mortgage?
This structure is popular with ABN businesses buying cars, utes, vans and light commercial vehicles because ownership sits with the business and the term and balloon can often be tailored. Potential GST and depreciation treatment is a key reason it is discussed with accountants, so confirm your position with your accountant or registered tax adviser.
Is a chattel mortgage right for you?
A chattel mortgage suits many businesses, but a finance lease or commercial hire purchase may fit others better depending on how you use the vehicle and manage your books. Comparing structures side by side helps.
How do you compare chattel mortgage options?
Overdrive Business Vehicle Finance compares 80+ banks and non-bank lenders through one broker, Managing Director Simon Kendrick. Request an indicative quote and a no-obligation soft check to see what may suit your business.
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