A chattel mortgage is whereby the financier lends you money to buy your vehicle, which you take ownership of, and the vehicle is used as security for the loan. A mortgage is taken over the vehicle and only clear title is obtained once the contract is completed. Chattel mortgages are attractive as they have flexible contract terms with fixed interest and monthly repayments. A tax deduction can be claimed when using the vehicle for business purposes. The purchase price of the vehicle includes GST but the monthly and final repayments do not. As the finance is secured by the vehicle you will find that lower interest rates apply.