Chattel Mortgage

When it comes to securing finance for the purchase of a vehicle, there are a few options for you to choose from. While a car loan is a fine option for most situations, a chattel mortgage is also a great choice for specific situations too. At Car Finance Broker Sydney, we’ve got a wealth of experience with all forms of car finance brokering, so we feel that we’re especially well-placed to help you with a chattel mortgage – should that be the right option for your specific circumstances. Our deeply experienced and highly knowledgeable car finance brokers will be more than capable of giving you the support and guidance that you’ll need to get the best terms for your car finance – and they’re only a single phone call away from helping you. To learn more about chattel mortgages, and how they differ from general car loans, simply read on below. For any lingering doubts or questions, our customer service team is standing at the ready.

What is a Chattel Mortgage?

First things first, what exactly is a chattel mortgage? In basic terms, a chattel mortgage is where a lender supplies a borrower with the capital that they need to purchase a car. As with a regular loan, repayments are required over a set period of time. With a chattel mortgage, however, the loan is always secured against the vehicle that is being purchased. This is different from a regular car loan, where the collateral could be other personal belongings, or the loan could be unsecured entirely.

Balloon Payments

One other significant difference between a conventional car loan and a chattel mortgage is the option for a balloon payment at the end of the repayment period. In essence, a balloon payment is a pre-agreed amount that you must pay to the lender at the end of the loan repayment period in order to take full ownership of the vehicle. One significant benefit of this type of repayment structure is that you get to enjoy lower monthly repayments for the duration of the loan (which usually lasts between two and five years).

Business Benefits

Throughout Australia, it’s much more common for private use vehicles to be financed by a general consumer car loan, while chattel mortgages are much more common for commercial vehicles. Why exactly is this the case? In large part, it’s because there are a number of tax breaks and benefits accessible through chattel mortgages for businesses only. You’ll be able to claim GST immediately, and since the vehicle will be considered a business asset, you can also claim depreciation too.

Obtaining Better Terms

By using our car finance broker service, you’re ensuring that you have a team that is used to securing the best possible financing terms for chattel mortgages and car loans. We’ll make sure that you have the best possible interest rates – which already tend to be lower with chattel mortgages rather than car loans – and that means money straight back into your pocket that would otherwise be lost.