chattel mortgage

A chattel mortgage is an attractive finance option for sole traders, partnerships and companies that use the 'cash' method of accounting for the Goods and Services Tax (GST). Under the cash method, the GST component of the acquisition price of the motor vehicle (or other asset) can be claimed back on the entity's next Business Activity Statement, rather than claiming the GST over the term of the finance contract.

You can choose to finance the total purchase price, or use a deposit or trade-in to reduce the loan repayments. You can even use the GST refund to contribute towards paying off the loan, thereby reducing the amount financed and the interest paid over the term of the loan.

As you are the owner of the motor vehicle you may claim a tax deduction for the depreciation on the motor vehicle as well as the interest component of the loan repayments.

In addition, GST is not payable on the loan repayments.

Other benefits of a chattel mortgage include:

• The repayments are fixed over the term of the loan.
• The term of the loan ranges from 9 months to 60 months.
• You can structure the repayments with or without a balloon payment at the end the term of the loan to tailor your repayments to suit your cash flow.

Please note: We are not able to offer advice regarding chattel mortgages and whether they suit your circumstances. The information given here is for information purposes only.