Skip to main content

How is Business Vehicle Finance Different from Consumer Car Loans

 


Businesses involved in the delivery, transport, or movement of goods or services from one place to another require vehicles for seamless operations. Some might require a whole fleet. But what do you do when you cannot afford to buy or lease the vehicle with company funds? If it's for business purposes majority of the times, the easiest way to access funds is through business vehicle finance. Don't mix it up with a consumer car loans. They are not the same, and in this blog, we will try to help you understand their distinctions. 

 

What is Business Vehicle Finance?

The term is self-explanatory! Business vehicle finance is the kind of financing option that allows one to secure funds to buy a car or a fleet for business purposes. It is a fixed-term financing option with a fixed interest rate. The loan terms vary between 2-7 years. 

You can buy both used and new cars using the loan amount. There is no need for collateral, as the vehicle acts as an asset once you claim ownership. Once you claim ownership, you can enjoy tax rebates and benefits from it. 

 

How is Business Vehicle Finance different from Consumer Car Loans?

A business vehicle finance is not the same as a consumer car loan. The most distinctive factor is when you buy a car with business vehicle finance, the vehicle should be used for business purposes atleast 50% of the times. On the contrary, you apply for consumer car loans to buy a vehicle for personal use. Unlike consumer loans, the business vehicle finance is funded under a company that is trading with an active ABN. 

 

What can be bought with business vehicle finance?

You can buy the following vehicles using a business car loans:

  • Two-wheelers
  • Small and medium-sized cars
  • Heavy-duty vehicles
  • Vans
  • Pick-ups
  • Utes
  • Trailers
  • Buses
  • Vans

 

Benefits that Further Define the Differences

A business vehicle loan has several benefits for the business owner and the company. Let's learn a few:

  • You can get a chattel mortgage for a business vehicle. It allows you to secure the whole amount or part of it from the lender. You must repay the amount over a term of 2-7 years. For a business car loan, you must apply with your Australian Business Number. 
  • The interest they charge you against the car loan can be leveraged for tax benefits. You can get reductions against the loan interest.
  • Once you claim ownership of the car, even if the loan is not paid off, it becomes your asset. You can use the asset value to get a tax rebate. 

 

There are other tax benefits that you don't get when you apply for a personal car loan.  

 Conclusion

Do you want to buy a vehicle or a fleet for your business? Are you falling short of the cash amount to buy the vehicle? No worries because Broc Finance can help. They are the leading finance broker in Australia with competitive rates and favourable loan terms for people applying for business vehicle finance. Check out their offerings, compare the loan products, and reach out for a formal consultation today! 

Source: https://www.brocfinance.com.au/blog/how-is-business-vehicle-finance-different-from-consumer-car-loans/

Labels:
Location: Australia

Comments

Post a Comment

Popular posts from this blog

Why Choose Commercial Finance Brokers Instead of Directly Going to the Lender

  Every business strive to grow and need finance from time to time for capex or working capital purpose. For this, they require financing options. The conventional way would be to go to a bank or any other traditional financing institution. But there is a drawback! Traditional financing has stringent assessment criteria and requirements which may all the businesses may not be eligible, especially small businesses.   Owing to this, business owners are now exploring alternatives for securing the finances needed to help their businesses prosper. This is where commercial financial brokers come into play. A commercial finance broker has access to multiple bank and private lenders offering a suite of business loan options to get the right solution for your business. Here we present three reasons why choosing a commercial finance broker is beneficial for you rather than directly going to the lender.   1. The perfect match - In the world of finance, there is no “one fit suit...
Post a Comment
Read more

UNDERSTANDING THE INTRICACIES OF BAD CREDIT BUSINESS LOANS FOR ENTREPRENEURS

  Business financing is a challenging domain to navigate. Your eligibility for loans depends on many factors and business owners have to meet complex requirements to get financing for their firms. One of the top concerns while looking for business loans is the entrepreneur's credit score. If you or your business have a history of defaulting on loans, you may find it hard to get a lender. If this happens, bad credit business loans can come to your rescue. An experienced finance broker can help you get these loans on terms that suit your needs. Let’s break down the concept of bad credit loans!   Bad Credit Business Loans: What Are They? Business owners need cash to keep their firms running. However, many entrepreneurs struggle to secure loans because of poor credit scores. That is where bad credit loans come in. These loans can help you infuse cash into your business operations on short notice. These are short-term financing sources that help businesses stay afloat in tim...
Post a Comment
Read more

When Can a Person Apply for Low Doc Business Loans & What are the Benefits?

  Documentation is one of the crucial aspects of loan approval. People unable to provide the necessary documents can get a rejection on their loan applications. But that’s the traditional way. If you approach financing options through a finance broker, even with minimal documentation you can access easy financing solutions.  Low doc business loans  are very much a reality; maybe not in traditional banking, but you can acquire funding through a finance broker from a private lender.   Understanding Low Doc Business Loans From sole traders and proprietors to SMEs, anyone can apply for low doc loans. If you are a business owner in urgent need for financing, you can apply for it, especially if you have existing documentation constraints. When you are busy expanding your venture it can be hard to keep track of all the financials. For new businesses, it is even stricter since they have not been trading for long. In these circumstances when you are in a tight spot du...
Post a Comment
Read more