With a Chattel Mortgage the customer owns the car from the start of the agreement. The financier secures the loan by registering a charge over the car.
Benefits to Business
- Preserve your working capital – immediate access to cars without paying for them upfront.
- 100% finance is available for approved customers. Fees, Government Charges, Insurance, Registration and On-Road costs can also be financed into the loan for approved customers. Customers may wish to provide a deposit or be required to provide a deposit for finance approval.
- Easier cash flow management – payment terms can be matched to the customer's income.
- Won't tie up existing assets – the item being purchased is the only security for the finance.
- Tax benefits – interest and depreciation are potentially deductible.
- Balloon payments (a lump sum payment at the end of the contract that settles the debt) can be arranged for approved customers. This enables customers to pay a lower monthly instalment during the term of the agreement, and then pay a balloon at the end of the term.
- The customer owns the asset at the start of the agreement.
Goods and Services Tax (GST)
Because the customer owns the car from the start of the agreement, any accounting of GST is between the customer and the supplier.
From a taxation perspective the customer is treated as having acquired the car directly from the supplier via a loan at the commencement of the agreement.
Need more information?
If you would like to learn more about a Chattel Mortgage, please call our Customer Service Centre on 1300 887 967 or submit your question using our enquiry form and a member of the Madison Team will contact you to answer any questions.
You can also request an online quote or apply online for a Chattel Mortgage.
Once you've heard what we can offer in terms of our range of competitive products and specific contract details, you'll have the confidence to know you've made the right decision.
