Chattel Mortgage

A Chattel Mortgage is a particular type of finance used by businesses for the purpose of purchasing a new or used vehicle or other business equipment.

Chattel Mortgage is essentially a Mortgage over goods to be financed. Chattel Mortgage is classed as a cash sale in that the goods automatically become yours on purchase and the finance company takes a mortgage over the chattels. However for tax purposes you can claim depreciation, running costs and interest paid, against your business income. The Chattel Mortgage allows businesses to claim the full input tax credit from GST incurred expenses immediately (next BAS statement). Always seek advice from your accountant in regard to this.

The Chattel mortgage is a very flexible finance option, in that, you have the ability to either finance the full purchase price or alternatively, you can include an upfront deposit or trade-in to reduce your rental commitment, while a Residual payment may also be placed at the end of the term (much like a lease residual) to represent the vehicles end value. Alternatively, you may choose to structure your rentals to clear the debt in full over the term of your agreement (fully amortised).

Chattel Mortgage – Benefits

  • Interest charged and depreciation of the vehicle are tax deductible
  • No capital outlay is required and cashflow protected
  • Terms can be flexible and fixed repayments make for easy future budgeting
  • After full payment of the chattel mortgage agreement, ownership of the goods is transferred to you.
  • You have the option to make payments with or without a ballon payment at the end of the term.

Chattel Mortgage – Applying

Applying for a chattel mortgage agreement with Fincar is easy. We do all the hard work for you – can assist with selection of the right product for your requirements, prepare the all paperwork and submit it to the appropriate lender. As a broker we are not limited to any particluar finance company – we can shop around for the lowest interest rate, help you avoid ‘hidden’ fees and charges and most of all prepare the paperwork with the minimum of fuss and maximum of professionalism.