Key highlights
- Finance a car in the company name through commercial lending
- Structures include chattel mortgage, lease or hire purchase
- Lenders assess trading history and a director's guarantee
- Depreciation and GST implications vary by structure
- Obligation-free soft-check quote, no credit-score impact
Company car finance lets a business, typically a Pty Ltd, purchase a vehicle in the company name and fund it through commercial lending. It is a common way for directors to put a car on the books while keeping business and personal finances separate. Here is how it works.
How is company car finance structured?
A company usually finances a car through a chattel mortgage, finance lease or hire purchase. With a chattel mortgage the company owns the vehicle from settlement and the lender holds security over it. The most suitable structure depends on how the company operates and its accounting preferences.
What do lenders assess?
Lenders look at the company's trading history, its ability to service the repayments, the directors' personal credit and often a director's guarantee. A well-established company with clean financials generally has more options, though newer companies are still catered for.
What are the tax implications?
Because the vehicle sits in the company name, there may be depreciation and GST implications. These vary by structure and usage, so confirm the detail with your accountant or registered tax adviser before committing.
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