Car Loans

Cash flow is a major factor in the survival of any business. And there are many elements that can eat into cash flow such as paying suppliers, paying staff, advertising, tax and purchasing vehicles.

And for most businesses, apart from staff wages and salaries, purchasing a vehicle can be the biggest expense they have.

The often-asked question is whether it’s better to finance a vehicle or purchase it outright. Purchasing a vehicle outright allows you to own it immediately but you need the cash available. Financing not only enables the business to take control of cash flow; it also opens several possible tax benefits which aren’t available when purchasing outright.

At Our Mortgage Options, we have access to several car finance options, each with potential tax advantages.

Some of these include:

Car Finance Lease

The vehicle is purchased by the finance company and leased to the customer. Payments are monthly over a fixed term and are potentially tax deductible if the vehicle is used for work and the amount financed doesn’t surpass the ATO’s depreciation limit of $57,581 (

Chattel Mortgage

The lender is the legal owner of the vehicle until the loan is paid in full. This loan is good for businesses and sole traders using the vehicle for more than 50% business use. Interest charges and monthly GST exempt repayments are some of the potential tax benefits.

Novated Lease

A Novated Lease is great for employers as it’s a way of boosting an employee’s salary package without adding pressure to the business with monthly repayments. The employee pays for the vehicle out of their pre-tax income which may increase their take home pay.

The most popular type of novated lease is the fully maintained version. The purchase price and running costs, which include, fuel, insurance, registration, tyres, and maintenance costs are paid for by the leasing company.

Our Mortgage Options is a member of the Mortgage and Finance Association of Australia, so you can be sure you’ll be provided with comprehensive service and up-to-date information.

To get started, simply use the contact form on this page or call 1300 700 496 so we can give you detailed benefits of each option.

Don’t forget, it’s best to go over them with your accountant who’ll inform you of the best choice for your specific circumstances.


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