Personal & Business Car Loans & Vehicle Financing

Personal Car Loans & Personal Car Finance Options

Secured Car Loans

A secured car loan is a type of car finance where the financier lends money for the purchase of a vehicle and takes security over the vehicle to protect the loan. This type of loan is also known as a consumer car loan.

Under a consumer car loan, the financier advances funds to the customer to purchase a car; the customer takes ownership of the vehicle at the time of purchase and the financier has an interest in the vehicle as security for the loan.

Once the loan has been paid back in full, the financier removes their interest in the vehicle and gives the customer clear title.

A consumer car loan is suitable for individuals wanting to purchase a vehicle and will not be using that vehicle for business use.

The benefits of a secured car loan are:

• Finance terms ranging from 24-60 months (2 years to 5 years)
• Fixed interest rates for the full term of the loan making it easer to manager the monthly repayments.
• Direct debit facility
• Deposits can be used reducing the amount financed saving interest charges over the life of the loan.

Novated Leasing

This is where the employee leases a car from the financier and the employer agrees to make the monthly lease payments on behalf of the employee out of there pre tax income. If the employment ceases or the lease agreement is finalised the novation agreement finalises and the obligations revert back to the employee.

Novated leasing is a great way of salary packaging a car. The benefits of a novated lease include:

• Your choice of vehicle
• If you change jobs you can take the vehicle with you
• Tax effective - the lease payments are made from the Gross income (pre-tax income). This helps savings on income tax.
• The equity built up in the vehicle will stay with the owner not the employer.

A novated lease also has benefits for your employer:

• No residual risk
• The vehicle is not left to the employer if the employee leaves.
• Better flexibility in remuneration packages for employees
• Administration costs, payroll tax, work cover premiums & time reduced.
• Employers can claim back the GST component of the monthly lease payments (as long as they are registered for GST) and the employee is responsible for paying the GST on the residual payment at the end of the loan.

FBT (fringe benefit tax) is payable on the vehicle and this expense is normally passed onto the employee but the amount of FBT payable will depend on the Kilometres travelled each year. For example the higher the kilometres travelled per year the lower the amount of FBT payable.

Business Vehicle Finance & Commercial Car Loan Options

Commercial Hire purchase

• Under a commercial hire purchase/asset purchase agreement ownership of the goods purchased remains with the financier until the loan has been fully repaid.
• The purchaser is deemed to acquire ownership as they make repayments therefore they are entitled to claim interest costs and depreciate the asset in line with ATO guidelines.
• Repayments can be fully amortised or a balloon payment can be structured into the facility to allow flexibility with the client’s cash flow.

Chattel Mortgage/Bill of Sale

• A chattel mortgage/bill of sale facility is a product where ownership of the goods rests with the purchaser.
• The financier takes a charge (mortgage) over the goods until the loan is repaid.
• Repayments can be structured to suit the individual needs of the borrower, with the options of fully amortising the debt or including a balloon payment both open to clients.
• For tax purposes, the client claims the interest content of the repayments and can depreciate the asset according to ATO guidelines.
• If a customer is registered for GST, the GST contained in the vehicle price can be claimed as an input tax credit on there next BAS (business activity statement).
• As with all financial options, clients should consult their accountant or financial adviser to determine which product is most suitable for their individual circumstances

Finance Lease

• A rental finance facility that allows a lessee to acquire vehicles or equipment over an agreed term.
• Ownership of the goods financed remains the property of the financier.
• The lessee can offer to payout any residual debt at the end of the term and acquire ownership of the assets purchased.
• Rental payments can be structured to suit the individual needs of the lessee with rental payments being tax deductible.
• The client should be directed to their accountant regarding the tax benefits of this type of facility as they relate to their individual circumstances.

Business vehicle finance is designed to suite companies, partnerships and sole traders. Depending on the business structure, cash flow requirements, tax considerations or GST registration status, we can tailor a business loan to suite your needs.