If you’re a tradie thinking about buying your own truck, you might not be aware of the finance options to suit the needs of a small business when it comes to getting your own vehicle.
Truck Assist have narrowed down a few to consider:
Finance lease
A finance lease is where the finance lender retains ownership of the vehicle, and you enjoy the benefits of ownership of a commercial vehicle. Essentially, the lender purchases the vehicle on your behalf and then leases it back to you. When the term ends, you can pay off the remaining and take ownership, trade it in or pursue other finance options.
Commercial hire purchase
This involves hiring a truck from a lender for an agreed period. After making fixed monthly repayments over this period, you may take ownership of the truck at the end of the term, provided you have paid off the loan in full.
Chattel mortgage
A chattel mortgage sees a financier lending you the capital you need to purchase a truck. You immediately take ownership, but the lender takes out a mortgage on the vehicle as security on the loan. Once the contract is over, the mortgage is removed.
Novated Lease
If you’re the owner of a small business with employees, this truck finance option might appeal to you. It allows employees to use their pre-tax income to lease a vehicle. The employer is responsible for arranging for the lease payments to be taken directly from the employee’s salary, meaning they can reduce their taxable income.
Business loan
A standard business loan is another option to fund the purchase of a truck. You have a range of options available with typical small business finance, including a line of credit and a basic term loan.
Business vehicle finance can be more flexible than you think..
Not only does ‘flexible’ pertain to the fact that there are a wide range of finance options available to you, but most of those options allow you to work out repayment schedules to match your needs and budget.
SEE MORE: Tradie Tough Tests
The length of the term associated with your business vehicle finance is important because it can influence how much money you must pay in order to gain ownership or, on the other hand, for loans that give you ownership up-front, the term is also important to consider for forward planning of payments.
There could be potential tax benefits too…
Depending on your circumstances, like how much is spent and the finance option selected, some business may receive tax benefits.
The amount that can be claimed as a tax deduction varies greatly. Make sure you ask these questions of your financier and consult your tax advisor about the tax benefits you may be eligible for.
Protect your truck with Truck Assist
Having insurance and specialist roadside assistance can be helpful if something unexpected arises, which is a real hurdle for any business, especially one in its infancy.
Get a quote online from Truck Assist to see how we can help get you back on the road.
This article provides general information only (and is not professional advice of any kind) and does not contain a definitive list of regulatory requirements which you must meet as a business owner. Businesses are required to comply with all laws, regulations, and codes of practice by identifying their risks, and develop and implement control measures tailored to their circumstances, and you must seek independent advice to assess your circumstances. Truck Assist bears no responsibility, and shall not be held liable, for any loss, damage or injury arising directly or indirectly from your use of or reliance on the information in this article.
*Limits and exclusions apply. This article contains general information only. When making decisions about our insurance, consider the PDS and TMD on https://truckassist.com.au/insurance/truck-insurance. National Transport Insurance is an equal joint venture administered on behalf of the insurers (CGU Insurance ABN 11 000 016 722 AFSL 227681 & Vero Insurance ABN 48 005 297 807 AFSL 230859) by its manager NTI Limited ABN 84 000 746 109 AFSL 237246.