When it's time for a new car, buyers face a process of major decisions - make, model, new or used, who to purchase from, where to source the finance and what type of car loan. The order of addressing those decisions may vary from buyer to buyer with many of our Jade Car Loans customers choosing to arrange their finance, that is have us organise a pre-approved loan, before making a finance decision on the car.
When it comes to motor vehicle finance there are several loan types available, depending on your profile and requirements. Jade Car Loans provides the full range of loan products which differ for personal and business buyers.
Business Vehicle Finance Products
For buyers purchasing a car to use in their business, Jade Car Loans offers a full portfolio of finance products including Car sole trader car finance, Hire Purchase Car, Leasing and Novated Leasing with Salary Sacrificing. These finance types are offered through both banks and non-bank lenders and to meet ATO regulations, the tax and accounting features of each are standard across the lending industry.
The most ‘popular’ in terms of the number of people selecting them, are Chattel Mortgage and Motor Vehicle Leasing. In simple terms, both finance types operate similarly with a fixed loan term, business car loan interest rate, a fixed monthly payment and an option for a balloon or residual.
It’s the, let’s say ‘technical’ features where the differences between products lie.
- Ownership: With Chattel Mortgage the borrower purchases the vehicle and the lender has a mortgage over the car as security against the loan. With Leasing the lender technically purchases the vehicle and leases it back to the borrower. In both cases the borrower has full use of the vehicle from the time of settlement and is responsible for all ongoing expenses and the vehicle is registered in the borrowing company name.
- Accounting Method: Companies use either the cash accounting or accruals accounting method. Chattel Mortgage is suited to the cash method and leasing to the accruals method.
- Balance Sheet Entry: With Leasing, because the vehicle is purchased by the lender, the asset appears on their balance sheet not that of the borrowing company. This appeals to some businesses as it may improve the balance sheet. With Chattel Mortgage, the car appears on the borrowing company's balance sheet because it is purchased in their name.
- GST Treatment: With Chattel Mortgage the GST on the purchase price is claimed in full on the BAS directly after purchase. No GST is then applied to or claimed on the monthly payments. With leasing GST is applied to and claimed on the monthly lease payments. In both cases, no GST is charged on the interest portion of the loan.
- Tax Deductions: As the monthly lease payments are considered an operating expense, they are tax deductible. With Chattel Mortgage, only the interest portion of the monthly repayments is tax deductible.
- Depreciation is in line with ATO regulations.
The cheap interest rates that Jade Car Loans achieves are the same for both Chattel Mortgage and Vehicle Leasing. We source you the best quote and the cheapest rates from across our large number of bank and non-bank lenders. The process of sourcing you a quote and arranging your business vehicle finance through Jade Car Loans is the same for all our commercial finance products.
In deciding which business vehicle finance product is most suited to your business, your Jade consultant will recommend that you refer to your accountant or financial controller.
Personal Car Loans
If your car is primarily for private use, you have fewer choices in loan types with a Secured Car Loan being the most popular loan compared with the alternative Unsecured Personal Loan. Refer to our web pages for details on each of these loan types.
Sourcing Cheap Vehicle Finance
Jade Car Loans arranges loans for both individuals and businesses, including options like the no doc car loan. The interest rate offered by Jade Car Loans for personal car loans is higher than that for business buyers due to the risk assessment. This is standard procedure across the lending sector. To be eligible for business vehicle finance and the lower interest rate, buyers must have a minimum of an ABN and meet other lender and ATO requirements. Your Jade consultant can discuss the options with you if you are a new start-up, interested in a no doc car loan, or have only recently received an ABN and have little documentation.
The business vehicle finance sector is highly competitive and as a major finance broker in this area, Jade Car Loans holds considerable bargaining power with many of our lenders. This, along with our expertise and extensive experience in options such as low doc car loan, provides us with the resources to negotiate better interest rates and better overall finance deals for both business and personal car finance.
All our products are available for the purchase of either new or used vehicles, depending on individual lender guidelines.
For a cheap car loan quote with one of the popular finance products contact Jade Car Loans at 1300 000 003
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