Car finance solutions for your business

cairns mortgage broker jason thomson


Need a new car or vehicle for your business? We have good news. Car finance solutions can help you get the car/vehicle you need, without paying the full cost at once. There may also be attractive tax incentives. Your experienced Smartline Adviser and your tax adviser can help you negotiate the options.

To get you started, we’ve put together a simple guide help you choose car finance solutions for your business.

Different car finance options for business

There are three car finance options, if you are using a car for business use only: a chattel mortgage, a low doc loan and an operating lease. A novated lease can be used for buying cars on your employees’ behalf.

chattel mortgage means borrowing money from the lender to purchase the car. The car is used as security against the loan. Depending on your situation, you may have the option to borrow the full amount, or pay a deposit. You may also have the option to bring down your monthly repayments by setting a residual value, or final balance.

Generally, chattel mortgages are very flexible, and offer a range of lending periods, from two to five years. Talk to your tax adviser to find out if this is a tax advantage for your business, as you may be able to claim tax credits, or claim interest paid on tax.

low doc loan means you require less documentation to finance the car. This might be a good solution for sole traders or small business owners. You must be able to prove the car is only used for business use under this arrangement.

An operating lease means the lender purchases the car and leases it to you. The advantage of an operating lease is that the lender assumes responsibility for risks associated with ownership. You pay regular instalments, like rent, for the period of the lease. At the end of the lease period, you have the option to renew the lease, update the vehicle, end the lease, or purchase the vehicle at a fair price.

novated lease is an arrangement made between an employee, an employer and the lender. The lender purchases the car. The employer takes a fixed amount of the employee’s pre-tax salary each month, and pays the lender. Employees can use the car for personal and business use.

If you are an employer, you may have the option to purchase the employee’s choice of car at a fleet discount, which is not available to individual buyers. You then work with the payroll department to set up the employee’s pre-tax salary deductions. There may be tax advantages of using a novated lease to finance cars for employees. This can be a great option for rewarding your employees, which promotes staff retention and loyalty.

How do you decide?

The car finance solution you choose will depend on the use of the car/s, and your tax situation. Book a chat with your Smartline Adviser, and speak to your tax accountant to work out which solution suits you.


Cairns Mortgage Broker – Jason Thomson is a Mortgage Adviser and Finance Broker based in Cairns with clients all around Australia. Client reviews featured on his website prove that Jason is a trusted industry professional, facilitating great outcomes for his clients. Using his wealth of experience in financial services, he thrives on delivering superior service. Jason is very approachable and is always looking for new clients to help in the often confusing world of finance and property. Offering a no fee service, you’ve got nothing to lose by having an obligation free chat with Jason today.