There are particular car loans with financing options that are best suited for businesses and individuals planning to use the vehicle for business purposes. These are usually referred to as business car loans.

A form of commercial loan the Chattel Mortgage works as an alternative to leasing at a fixed interest rate. This form of a car financing is best for business purposes as the mortgage stamp and the contract repayments do not have any GST attached to them. It also suits the companies and business types that use the cash method of accounting, recording business income and expenses at the moment.

The way this form of loan works is that the financer provides the buyer with the funds to take ownership of the car and creates a 'mortgage' over the car as a form of security and registers a floating or fixed charge on it. Once the contract is complete the charge is removed.

Benefits vary from having no applied GST, fixed interest rates and monthly payments fixed at a specific rate to a tax deduction applicable if it is used for business purposes. With a 24 to 60 month payment plan, meeting installments becomes easier.

Since the GST is claimable with the vehicle price the chattel mortgage allows the monthly installments and the final payment to be free of any tax implications. The interest charges on the contract can be claimed by the customer and depreciation up to a specific limit.

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