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Is non-bank Chattel Mortgage cheaper than a bank?

The banking sector, particularly the Big 4 Banks – CBA, ANZ, Westpac and NAB, is traditionally the go-to source for all types of business finance. You have your transactional accounts with your bank, possibly lines of credit, your personal home mortgage, perhaps an overdraft and maybe your investment accounts. So it’s only natural that you would head to the bank when for business vehicle finance.

But banks are not the only option with many non-bank lenders entering the sector and giving the banks a run for their money and creating a highly competitive lending market. While this is not ‘new’, new players continue to enter the market presenting a wider choice of options and requiring greater diligence from borrowers when sourcing the best car loan deal.

Jade Car Loans is accredited with both banks and non-bank lenders and we have experienced first-hand the large increase in the non-bank area over our 20+ years in motor vehicle lending. We’ve seen, and continue to see, the welcomed competitiveness these new companies are injecting into the sector. Competitiveness which improves our ability to deliver even cheaper car loans for our customers.

But just because they present a highly competitive image backed with impressive marketing campaigns doesn’t mean that non-bank lenders always offer cheaper motor vehicle finance deals than the banks.

As a broker, our focus is on achieving the best outcome for our clients. We work in your best interests to negotiate the cheapest car finance deal that meets your requirements. Sometimes it will be one of the banks that comes out ahead and sometimes it will be a non-bank lender. With our large lending panel we have the capability to cover off on many options on your behalf, quickly and easily.

Standard Loan Structure

Most banks and non-bank lenders offer Chattel Mortgage for car loans. Some banks refer to a Chattel Mortgage as an ‘Equipment Loan’. As this is a very popular form of car finance and sought by many businesses it can be a competitive area in regard to some elements of the loan.

To meet ATO rulings and other regulatory issues, the format and basic structure of Chattel Mortgage motor vehicle finance is standard for all lenders – bank and non-bank.

Chattel Mortgage Format:-

  • Fixed interest rate
  • Fixed monthly repayments
  • Fixed loan term
  • Optional balloon
  • Lender takes a mortgage over the vehicle over the term of the loan
  • GST is claimable on full purchase price on ensuing BAS return after purchase
  • Only the interest portion of the repayments and balloon are tax deductible, not the entire payment

Flexible Rates and Terms

While the Chattel Mortgage is standard across the industry, it is in the interest rate, terms, conditions and loan approval guidelines where lenders can be more flexible and more competitive.

Loan guidelines: Especially in the wake of the Royal Commission, banks can generally be more stringent in their loan application guidelines with little ‘room to move’ if a business doesn’t meet all their requirements. For our customers that don’t meet the bank guidelines, our Jade Car Loans consultants have our many non-bank lender to source a Chattel Mortgage offer. Non-bank lenders tend to be more negotiable when it comes to many aspects of business finance. This is particularly relevant in regard to Low Docs and No Docs Chattel Mortgage offers.

Interest Rate: Individual lenders set their interest rates based on a number of parameters including:- their cost of sourcing their funds; current official interest rate; their risk assessment of individual applications; their active participation in a particular loan sector, eg motor vehicle lending; amongst other factors.
Like Jade Car Loans, most banks and lenders advertise their current interest rate for a loan type on their website. When negotiating with lenders on behalf of our customers, Jade Car Loans use our strong bargaining power in motor vehicle finance to get the cheapest interest rates.
While the non-bank lenders tend to be negotiable by the nature of their business set-up, all elements of the loan offer need to be considered as a package and often the bank will be considered the ‘best’ offer for that customer.

Loan Terms: The term of the loan, repayment amount and the percentage balloon can be key factors to some businesses when seeking Business Vehicle Finance. ‘Cheap’ is defined as ‘affordable’ to their operation and working with their cash flow. The balloon and loan term vary the monthly repayment. So being able to negotiate on both or either to suit your individual requirements can make a Chattel Mortgage more ‘affordable’ from your perspective.
Jade Car Loans will negotiate these elements on your behalf with all lenders we approach for your quote. Whether the bank or the non-bank makes the better offer is subject to their individual assessment of your application.

Sourcing a Cheap Chattel Mortgage

While it may seem that we’ve danced around giving you a direct answer like Question Time in the House of Reps, the question of whether a non-bank lender or a bank can offer the cheapest Chattel Mortgage doesn’t have a definite, general answer.

At Jade Car Loans we are accredited with both and our non-bank lenders include some ‘industry-only’ companies that deal only through a select group of finance brokers. So we have many options to be able to source you the cheapest car Chattel Mortgage available that matches your requirements and your application.

Using Jade Car Loans as your finance broker provides you with a streamlined and straight forward way to source the cheapest Chattel Mortgage car loan with terms and conditions that will work with your business operation.

For a cheap Chattel Mortgage quote contact Jade Car Loans 1300 000 003 and discuss your requirements with one of our consultants.

DISCLAIMER: THE INFORMATION PROVIDED IN THIS ARTICLE IS FOR GENERAL INFORMATIVE PURPOSES AND NOT INTENDED AS FINANCE ADVICE. INDIVIDUALS SHOULD REFER TO THEIR FINANCIAL ADVISOR OR ACCOUNTANT FOR ADVICE IN REGARD TO THEIR INDIVIDUAL FINANCIAL DECISIONS AND SPECIFIC CIRCUMSTANCES. DETAILS IN REGARD TO GOODS, SERVICES AND GOVERNMENT OFFERS AND POLICIES HAS BEEN SOURCED FROM PUBLIC MANUFACTURER AND SUPPLIER WEBSITES AND GOVERNMENT RESOURCES. NO LIABILITY IS ACCEPTED FOR ANY ERRORS OR MISREPRESENTATION OF INFORMATION AND DATA OBTAINED FROM THESE SOURCES.

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