If your company is considering getting a vehicle that will only be used for business purposes then you need to consider getting a chattel mortgage. A chattel mortgage can be used to finance a business car. You’ll be surprised at what a chattel mortgage can give you and how they can help you claim ownership of a vehicle.
If you’re going to use the car for business purposes then you’ll find that there are benefits to taking out a chattel mortgage over another financing option. Chattel mortgages have the best rates available and can be claimed in your tax return. So you get instant access to your vehicle without having to wait for a more expensive car loan.
Basically a chattel mortgage is a type of loan that lending institutions offer specifically to buy business cars. When you take on a chattel mortgage you become the mortgagee and the legal owner of the vehicle. The institution that lends you the money becomes the mortgagor and will use the vehicle as security for the loan. If you default on the loan and fail to pay back the money then you could lose the car.
A chattel mortgage is a combination of a loan and a lease. With a chattel mortgage you are given the best rates for the loan and are even offered tax incentives. You are also able to get instant access to your car without having to wait for a car loan.
When you take out a chattel mortgage you are given money in advance in order to buy equipment. You become the legal owner of the equipment as soon as you buy it. The lender will take a mortgage on the equipment as the loan security and register your interest over it with the Personal Property Securities Register (PPSR).
In order to get a chattel mortgage you need to go to the lending institution of your choice and pick the right mortgage for you and your needs. Then you fill out the application form and hand over any requirements such as identification and proof of income and send it off to the lender. After that you just wait to hear the good news that your loan is approved or the bad news that it hasn’t been. There are some things about loans that you should take a look at and keep in mind when taking out a loan. This includes the interest rate, hidden fees and charges.
The main benefit to using a chattel mortgage as your loan of choice is that you own the vehicle as soon as you purchase the vehicle. The lender gives you all the money you need to buy the car and anything else you need for it.
When you take out a chattel mortgage you get a lot of benefits if you’re registered with GST on a cash accounting basis. With this you can take the GST of the vehicle as an Input Tax Credit on the Business Activity Statement (BAS). The GST is also only charged on the initial purchasing price of the vehicle and not on any monthly repayments.
On top of all of this you are also able to cliam a tax deduction on interest charges and the depreciation of the vehicle. You do need to remember that there is a limit to the depreciation claim and you will need to prove that the car has depreciated using evidence such as documents.
There are other benefits to taking out a chattel mortgage. These include:
Sole traders, people in partnerships and companies that account soley through cash will see that there even more benefits for them.
If you are interested in getting a different kind of loan you’ll find that there are plenty of loans out there for any purpose. Consider one of the following car loan options the next time you’re buying a business car.
A chattel mortgage is a loan that is used to purchase a vehicle for business purposes. You own the vehicle but it is still used for security until you pay off the loan.
When you get a chattel mortgage be sure to hop around to find the best offer. Always compare the options you have to find the right deal for you.