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Choosing A Car Financing Option For Your Business Vehicle

choosing a car financing option for your business vehicle (1)

So you’ve been in business for a year or two and after much thought it is time for an upgraded work vehicle. What more a fitting time with tax time around the corner and with plenty of options for ABN Car Finance.

Luckily for you as a business owner, there are a number financing options available for your business vehicle that can meet your budget and needs. In this article we will be discussing those options in detail but before that, let’s take a look at some of the key questions you need to ask yourself before purchasing a car for business use.

What will be the sole purpose of the car?

Keep in mind your field of business and the day to day activities you will be undertaking. If you offer plumbing or electrical services, chances are you will need a vehicle to carry your equipment to your clients home or office. If your field is in sales and consulting, then most of the time you will be moving from one client to another therefore, a car is a must have for your business.



What car model would be ideal for your business?

If your trade is to transport goods or supplies to clients or other businesses, a truck or minivan would be effective enough for the job and if your trade is in consulting or sales, an SUV or any other car would do. If you are a tradie then you might consider one of our 4WD options BONUS 100% Tax Write Off.

It all depends on your preference and objectives you want to achieve.

Possible Options:Β 

  • Used Cars
  • Second Hand New Cars
  • Wholesale your Car

Read More:Β Brisbane Used Cars


What does your financial situation look like?

If you have the money with you at hand, then you could easily pay for the car there and then but if you feel that your business is currently in a state where paying for a car upfront wouldn’t be the best idea at the moment, you have the option of applying for a loan to finance the car.

Have you considered all the costs of purchasing a car?

There are so many things to consider when planning on buying a car such as general maintenance, fuel, insurance, servicing the car and much more. These expenses will affect your businesses cash flow so it’s important to factor in all these expenses when choosing a car for your business. Not being able to keep with the expenses will negatively affect the running of your business.

What financing options are available?

There are a number of financing options available for your business vehicle that you can choose from. These are;

  • Chattel Mortgage

This is a popular option for business owners and operators. A financier lends the business money that is required to purchase the vehicle. The business then takes immediate ownership of the vehicle but the financier takes out a mortgage on the vehicle while the loan is being paid as security. Once the business clears out the loan, the mortgage is removed and the business/employee has full ownership of the vehicle.

  • Finance leasing

Also known as sales lease is where the business is given full use of the commercialΒ  vehicle and all benefits of ownership but the financier retains vehicle ownership. Your business will make monthly lease payments until the term of the lease is up.

  • Novated lease

With this option, there has to be an agreement between an employee, the employer and the financier.Β  This option allows an employee to lease a vehicle using their pre-tax income. The employer arranges for the payments to be taken directly out of the employee’s salary. This means you will have to be employed throughout theΒ  lease period and also your employer must agree to the novated leasing. Note that it’s important to consult with a car finance consultant about this option to know about the fees involved with it.

  • Commercial hire purchase

This option lets you hire a car from a lender for an agreed period. You then make fixed monthly repayments over the period. Once you pay off the loan, you can take ownership of the vehicle.


What should you keep in mind when comparing car loans?

Each loan has different features such as interest rates, length of loan term and the fees. So before you choose a loan term do lots of research and if you can make sure you consult with a car finance advisor. Secondly, for any vehicle financing option, you have to make regular repayments. This will affect your businesses cash flow therefore, go for a vehicle financing option that will allow you to tailor your repayments in a way that will suit your cash flow. Lastly, keep in mind the tax implications of the car loan as well as it varies greatly for each financing option.

Get in touch with us at Auto Credit Now and we will help you find the best deals for your business vehicles.

Consider: Secured Loan Using Your Car As Collateral