Car Finance and Car Loans

The chattel mortgage facility has grown in popularity in recent years. Much of this can be attributed to the introduction of the GST and they way the ATO consider the taxation treatment of various car finance options.

The chattel mortgage facility offers flexibility as you can either finance the full purchase price, or alternatively, you can include an upfront deposit or trade-in to reduce the repayments. You may also wish to include a residual or balloon payment at the end of the finance term to further reduce your monthly repayments.

The chattel mortgage is essentially an instrument that facilitates a Mortgage over goods (chattels) to be financed. For taxation purposes you can still benefit from claiming depreciation, running costs and interest paid, against your income as with a commercial hire purchase agreement. The main point of difference is that a chattel mortgage allows businesses to claim the full input tax credit from GST incurred expenses immediately (next BAS statement).

If you would like to discuss a chattel mortgage with a car finance consultant, please feel free to contact Madison Finance on 1300 887 967 to discuss your individual car loan needs.

A chattel mortgage is a type of finance facility used for the purpose of purchasing vehicles or other business plant equipment.

With a chattel mortgage the goods are owned by you, however the title of ownership is retained by the financier until final payment is received.

You can claim the allowable depreciation and interest as a tax deduction. GST does not apply to the monthly payments, however the GST on the purchase is recoverable at the time of purchase.

With a chattel mortgage you are able to finance the full purchase price of the goods, include an upfront deposit or trade-in.

You may choose to structure your payments to clear the debt in full over the term of your agreement or nominate to have a ballon/residual value payable at the end of the chattel mortgage term.

If you would like to start a discussion on arranging a chattel mortgage or car finance in general please call us on 1300 887 967 or submit your online enquiry here.