What is a Chattel Mortgage?
Chattel Mortgage is a product that assists a business or an individual to either upgrade or acquire a new car, used car or other business equipment. A chattel mortgage provides for the purchase of goods in exchange for a fixed series of payments. The goods are used as security for the loan contract.
A chattel mortgage allows you to either finance the total purchase price, use a deposit or trade-in or add a final lump sum balloon payment to reduce the loan repayments. As a business, the GST incurred in the purchasing of the equipment can contribute towards paying off the loan! Ask A1 Car Loans how this works.
With a chattel mortgage, you are deemed to be the owner of the goods while the financier has security over the goods. As the owner, you can claim a tax deduction for the depreciation on the goods as well as the interest component of the loan repayments. Please talk to your accountant to determine what tax and depreciation claims are available to you.
Use our FAST QUOTE car finance calculator to see how deposits and balloons can change the loan repayment.
Benefits of a chattel mortgage:
- Little or no initial capital outlay
- You own the goods from day one
- Repayments can be structured to match your cash flow
- Balloon payments can be applied to reduce your repayments
- Terms from 12 months to 60
