Car & Asset Finance Broker — Melbourne & Geelong

Four ways to finance a car (which one suits you?)

The right structure depends on whether you're a PAYG employee, a business owner, or a sole-trader, plus your tax position and how long you'll keep the vehicle.

• Consumer car loan — straightforward personal loan secured against the car. Best for personal/private use vehicles, no business or tax claim. Terms typically 3-7 years.
• Novated lease — your employer pays the lease + running costs from your pre-tax salary, reducing your taxable income. Best for PAYG employees with stable income. Particularly valuable for electric vehicles (FBT exemption applies until 2027).
• Chattel mortgage — for ABN holders / business owners. The vehicle is yours from day one; the lender holds a "chattel mortgage" over it. Interest is tax-deductible to the business-use percentage; you can claim GST on the purchase upfront.
• Operating lease / commercial hire purchase — lower monthly payments, lender retains ownership. Best for businesses that want to upgrade vehicles regularly without ownership.

Novated lease — explained for PAYG employees

A novated lease is a three-way agreement between you, your employer, and a financier. Your employer takes lease payments + running costs (fuel, registration, insurance, servicing, tyres) directly from your pre-tax salary.

Why it's powerful:

• Reduces your taxable income (you pay tax on a smaller salary)
• Bundles all running costs into one predictable monthly payment
• For electric vehicles, the FBT exemption (running through 2027) makes the savings exceptional — often $5,000-$15,000/year vs buying privately

Watch-outs:

• If you change jobs, the lease typically transfers or you assume it personally
• "Residual value" balloon payment at end of lease — needs planning (refinance, payout, or trade-in)
• Your employer must offer novated leasing as a benefit — most do, some don't

Chattel mortgage — for business owners and ABN holders

If you have an ABN and use the vehicle for business (even partially), a chattel mortgage usually beats a consumer loan on after-tax cost.

How it works:

• You buy the vehicle outright with finance — you own it from day one
• Lender registers a "chattel mortgage" over the vehicle (security)
• You can claim GST on the purchase price upfront (in your next BAS)
• Interest portion of repayments is tax-deductible based on business-use percentage
• Depreciation is claimable against business income

Best for: tradies, contractors, real estate agents, sales reps, mobile services, sole traders, and anyone with an ABN whose vehicle has 50%+ business use.

Common car finance mistakes

• Letting the dealer arrange finance — dealer finance often has hidden margins and inflated rates. We compare independently across 30+ lenders.
• Ignoring the comparison rate — the headline rate is meaningless without comparison rate (which includes fees). A "low rate" with high fees can cost more than a higher rate with no fees.
• Wrong product for your situation — a PAYG employee taking a chattel mortgage misses the salary-packaging benefit. A sole-trader taking a consumer loan loses tax deductibility.
• Balloon payments not planned for — many car loans/leases have residual values at end of term. If you can't refinance or pay it out, you can be forced to sell prematurely.
• Not checking your credit before applying — a single hard inquiry from a poorly-targeted application can hurt your score. We pre-qualify with soft checks before submitting.