Chattel Mortgage

What is a Chattel Mortgage?

A Chattel Mortgage is a convient and flexible finance solution for the purpose of purchasing a new or used car. A chattel mortgage is mainly designed for sole traders, partnerships and companies that are looking to finance a vehicle used primarily for business purposes (50% and above).

A chattel mortgage means that your business is the owner of the vehicle and the financiar takes a mortgage over the vehicle (this is similar to a home loan. The positive side to having a chattel mortgage is that the vehicle can be listed on your assets. In return you must pay a fixed monthly instalment for a set period of time,usually ranging from 12-60 months.

The Chattel Mortgage allows businesses to claim the full input tax credit from GST incurred expenses immediately (meaning the next BAS statement).

What are the benefits of a Chattel Mortgage?

Cash Flow Benefits:

  • The loan term for a Chattel Mortgage can range from 12 to 48 months
  • The repayments are fixed throughtout the term.
  • The fixed car lease rentals are paid monthly so it will allow you to organise your budget easily and accuratlely
  • The car is not funded within the business and therefore its not shown on the balance sheet of the business


Other Benefits:

  • There is a reduction in the time and expense of administration, especially when taken with full maintenance
  • There are no costs or liability associated with vehicle disposal
  • You control vehicle maintenance and servicing

Tax Deductible:

  • Chattel Mortgage repayments are fully tax deductible and the GST paid can be claimed immediately (meaning the next BAS statements).

 

More on Benefits of Leasing

 

You will need to seek professional advice from your accountant regarding any tax related queries.


Compare your Lease Options

Need to compare which is the most suitable lease choice? Contact one of our loan consultants so we could work out which finance lease is the most suitable for your business.



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