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Benefits of a chattel mortgage include flexible loan repayment periods, the option to reduce the monthly repayments by setting a final balance (residual value or balloon), the potential to claim tax deductions if the car is being used for business purposes* and the potential to claim Input Tax Credits if you are registered for GST*

A chattel mortgage can also have additional benefits (subject to lender selection) including a fixed interest rate and monthly repayments for the duration of the loan as well as repayments that can be aligned with your or your business' cash flow.

*Please check with your accountant for eligibility

Both businesses and individuals are eligible for a chattel mortgage, as long as the car is being used predominantly for business purposes.

A chattel mortgage is a good choice for those who are registered for GST on a cash accounting basis, as you should be able to claim the GST from the vehicle’s purchase price as an Input Tax Credit on your next Business Activity Statement.

If the car is being used for business purposes, you may be able to claim a tax deduction on the loan interest charges, as well as on the depreciation value of the vehicle, up to the Depreciation Limit set by the Australian Tax Office. Speak to your accountant to find out more.

A chattel mortgage involves a finance company lending you the money to purchase a vehicle that will be primarily used for business purposes. Set repayments are then made on a monthly basis.

You’ll own the vehicle outright, however, the finance company will place a “mortgage” over the vehicle, as security against the loan.

Once the loan and any Residual Value (the final balance on the vehicle) has been repaid, the finance company will remove the mortgage. Alternatively, you can choose to re-finance the Residual Value or trade the vehicle in.

A commercial finance product where you hire the vehicle from the lender for a fixed monthly repayment over a set period. Otherwise known as corporate hire purchase, hire purchase or offer to hire.  It’s a good choice if you are registered for GST on an accruals or cash accounting basis.

The lender agrees to purchase the vehicle on your behalf and then hires it back to you over a set period. You’ll have full use of the vehicle for the term of the contract, you just won’t be the owner. At the end of the term, when the total price of the vehicle (minus any residual) and the interest charges have been paid in full, the customer takes ownership of the car.

Benefits of a commercial hire purchase include having the potential to claim tax deductions if the car is being used for business purpose and the potential to claim Input Tax Credits if you are registered for GST.

Commercial hire purchase products will often provide features such as flexible loan repayment periods, the option to set a final balance (Residual Value) to reduce monthly repayments and the option to put down a deposit to reduce the amount borrowed.

If the car is being used for business purposes, you may be able to claim a tax deduction on the loan interest charges, as well as on the depreciation value of the vehicle, up to the Depreciation Limit set by the Australian Tax Office.

GST is charged on the purchase price of the vehicle and, if you’re registered for GST on a cash basis, you should be able to claim this as an Input Tax Credit on your next Business Activity Statement.

You will also pay GST on any term charges or fees.

Both businesses and individuals can apply for a commercial hire purchase, as long as the car is being used predominantly for business purposes.

A commercial hire purchase is a good choice for those who are registered for GST on an accruals or cash accounting basis, as you should be able to claim the GST in the vehicle’s purchase price as an Input Tax Credit on your next Business Activity Statement. You should also be able to claim GST on any interest charged as Input Tax Credits over the lifespan of the loan.

For individual employees, alternative, cost-effective finance options include a chattel mortgage, a novated lease or a car loan, while businesses may also want to consider a chattel mortgage or a car lease.

To discuss your individual needs in detail and secure the right finance option for you, speak to one of the Stratton Finance team on 1300 787 288.

A car loan (also referred to as a secured car loan) involves a finance company lending you the money to purchase a vehicle for personal use. The loan is secured against the vehicle and, when the final repayment has been made, you will own the vehicle outright.

Benefits and product features of most car finance solutions include flexible loan repayment periods, the ability to set a balloon or residual which will reduce your monthly repayments and lower interest rates versus a personal loan thanks to the loan being secured against the vehicle itself. As a business, a car finance solutions may help you improve cash flow to your business, as well as the potential to claim tax deductions if the car is being used for business purposes (check with your accountant for eligibility).

Please visit the ATO website or speak to your accountant to find out about claiming vehicle-related tax deductions.

A car loan is a good option for someone who uses their vehicle mainly for personal purposes, but who does not have the option of salary packaging a car through a novated lease.

A personal loan (also known as an unsecured car loan) involves a finance company lending you the money to purchase a vehicle for personal use. Although you’ll make regular loan and interest repayments over a period agreed with your finance company, you will own the vehicle from the time of purchase, due to the fact that the loan is not secured against the vehicle.

Benefits include:

• Flexible loan repayment periods, ranging from one to seven years
• Fixed interest rates mean you'll always know your repayments=
• The potential to claim tax deductions if the car is being used for business purposes*

*Please check with your accountant for eligibility

Please visit the ATO website or speak to your accountant to find out about claiming vehicle-related tax deductions.

A personal loan is a good option for those looking to purchase a vehicle that may not meet the criteria outlined for a secured car loan, for example, an old or low value vehicle. However, a car loan or novated lease is generally a cheaper finance option to consider.

Under a novated lease, you purchase the vehicle and then “novate” the finance agreement to your employer. As a result, your employer agrees to take on your obligations (repayments) to the finance company, and is responsible for all of the agreed vehicle expenses which are deducted from your remuneration as part of your salary packaging arrangement. You agree to "salary sacrifice" a portion of your earnings in return for the benefit of a car equal to that amount. With a Novated Lease, the lease, running costs of the vehicle and Fringe Benefits Tax (FBT) are deducted from your pre-tax earnings, and PAYG income tax is calculated on your reduced salary. This can effectively increase your net disposable income as you pay less tax.

Novated leasing offers many benefits for employees including tax efficient structuring of your car expenses (by paying them from your pre-tax income, giving you the ability to choose your own vehicle (as opposed to being given a fleet car), providing you the ability to use 100% of the time, allowing you to move the lease around between employers and giving you the ability to potentially benefit from any profit realised on sale (over and above your payout figure).

Like a car loan, your repayments are fixed and you can select an appropriate term as well as a residual (or balloon) in many cases.

Importantly, under a novated lease, the financier applies an Input Tax Credit (ITC) to remove the GST from the amount financed. This means that your repayments will be lower as you finance a reduced, GST-exclusive amount. Under a salary packaging arrangement all finance and operating costs for the vehicle are known as a "related benefit" and are GST and income tax-exempt.

If you are working full time or permanent part time and your employer supports salary packaging - you're eligible.

• Vehicle finance
• Comprehensive insurance (or you can arrange your own)
• Registration
• Fuel
• Maintenance such as servicing, tyres, battery replacement and repairs
• Roadside assistance

Novated leasing offers a number of benefits for employers:

• The ability to provide more flexible remuneration to employees at little-or-no cost to your business.
• Significant savings of time and money compared to the administration of a company fleet.
• Elimination of the residual-value risk of a company fleet.
• The employer is not responsible for the vehicle if an employee leaves, and is not left with vehicles surplus to requirements.
• Vehicles provided under a Novated Lease are "off balance sheet" - neither an asset nor a liability.
• Reduced employee on-costs, such as Payroll Tax and WorkCover premiums.

Luxury Car Tax is a tax that must be paid on new and used vehicles where the total purchase price (including GST, but excluding other government fees and charges) exceeds the Luxury Car Threshold. You will only be required to pay Luxury Car Tax on the amount above the threshold limit.

Bear in mind that the Luxury Car Tax Threshold is subject to change each financial year – you can find this year’s figures here.

Car dealerships will almost always include the Luxury Car Tax in the price quoted.

Primary producers and tourism operators may be able to claim a refund of up to $3,000 on any Luxury Car Tax paid, depending on the type and number of vehicles purchased.

If the total purchase price (including GST, but excluding other government fees and charges) of your car exceeds the Luxury Car Threshold, you’ll need to pay Luxury Car Tax. You’ll pay 33% on the amount that exceeds the Luxury Car Threshold (less GST).

This is calculated using the four following steps:

1. Calculate the cost of the car (including GST, but excluding government fees and charges, such as stamp duty, registration and compulsory third party insurance)
2. Subtract the current Luxury Car Tax threshold amount from the car’s price
3. Divide the figure from step 2 by 1.1 to subtract the GST
4. Multiply the figure from step 3 by 33% (the Luxury Car Tax rate)                                                                                          

Bear in mind that the amount payable can also vary if you have a “green” car, as the threshold is higher for fuel-efficient vehicles.

To find out exactly how much Luxury Car Tax you’ll need to pay on your new vehicle, use our Luxury Car Tax Calculator.

Luxury Car Tax only applies to the purchase of cars that meet a set luxury car criteria.

Vehicle purchases that are exempt from Luxury Car Tax include:

• Cars with a purchase price below the Luxury Car Tax threshold (including GST, but excluding other government fees and charges)
• Fuel-efficient "green" cars with a purchase price below the Luxury Car Tax Threshold (including GST and excluding other government fees and charges) for fuel-efficient cars
• Commercial vehicles that are not primarily designed as passenger vehicles
• Disabled transport vehicles which have modified for transporting wheelchair passengers

You’ll pay less Luxury Car Tax on “green” cars, thanks to a higher Luxury Car Threshold for fuel-efficient vehicles. Cars classed as fuel-efficient have a combined-cycle fuel consumption of 7L per 100km or less as calculated according to the vehicle standards in force under section 7 of the Motor Vehicle Standards Act 1989).

The current Luxury Car Tax limit for fuel-efficient cars can be found here.

You may be able to claim a Luxury Car Tax refund if you are a primary producer or tourism operator.

Refunds apply to the purchase of eligible vehicles (including four-wheel and all-wheel drives) and are capped at $3,000 per vehicle. Primary producers can claim the refund on one eligible vehicle purchase per financial year. Tourism operators can claim the refund on each eligible vehicle purchased.

Luxury Car Tax is paid upfront as part of the vehicle purchase and refunds are then claimed back from the Australian Tax Office.

For Financial Year 2018-2019 (FY18), the Luxury Car Tax Threshold has increased to $66,331.

The fuel-efficient "green" car LCT Threshold is $75,526.

These thresholds apply from 1 July 2018 to 30 June 2019.

Motor vehicle stamp duty is a government tax, which has to be paid when you register or transfer the ownership of any motor vehicle.

How much you pay in Stamp Duty is usually based on the vehicle’s market value (including GST) and paid to your State’s Tax Revenue Office within 14 days of buying or transferring the vehicle. However, there are some concessions available, so do get in touch with your Tax Revenue Office for more information.

Stamp Duty will usually be included in the on-road costs of the vehicle and paid by the dealership on your behalf. If you’re buying a used vehicle privately, you’ll need to pay the Stamp Duty directly to your State’s Tax Revenue Office within 14 days.

Motor vehicle stamp duty in Victoria is calculated using the dutiable value of passenger and non-passenger cars and other vehicles.

* vehicle primarily designed for carrying goods, includes utility and dual cab ute

Application for registration or transfer registration of a previously LMCT (car dealer) registered high value vehicle

Where:

• The vehicle is a 'passenger car'
• The vehicle is acquired within 60 days of the initial LMCT registration, and
• No duty has been paid on or since the initial registration of the vehicle

Motor vehicle stamp duty in New South Wales is derived from the full value of the new car or vehicle, or the sale price or market value of a used vehicle (which ever amount is greater).

Motor vehicle stamp duty in Queensland is calculated upon the dutiable value and engine size of the car or vehicle. The dutiable value for new motor vehicles is the total price list of the vehicle including all items of optional equipment. The dutiable value of a used vehicle is the greater of the sale price of the vehicle, (including deposit and the cost of all optional equipment) or the market value of the vehicle.

Motor vehicle stamp duty in South Australia is calculated on the declared value of the car or motor vehicle.

The dutiable value of a new motor vehicle is the recommended retail price or manufacturers price list (inclusive of GST or Luxury Car Tax, where applicable). The value of a used vehicle is the calculated upon the greater of the vehicle market value or the purchase price.

Motor vehicle stamp duty in Western Australia is calculated upon the dutiable value of the car or vehicle.

The dutiable value of a new motor vehicle is the retail selling price of the vehicle plus any amount paid for optional features. The dutiable value of a used vehicle is the purchase price of the vehicle including any dealer delivery charges or accessories.

 The amount of motor vehicle stamp duty payable in Tasmania is derived from the dutiable value of the car or vehicle.

The dutiable value of a new motor vehicle is the consideration paid for the vehicle, disregarding the value of any trade- ins.

The dutiable value of a used vehicle is the greatest of three options; the consideration paid for the vehicle, the market value of the vehicle at the time the vehicle was acquired or the value of the vehicle at the time of application to register the vehicle.

Motor vehicle stamp duty in the Northern Territory is calculated using the purchase price of the car or vehicle, new or used, including any additional equipment and accessories fitted to the vehicle.                     

Motor vehicle stamp duty in the Australian Capital Territory is derived from the dutiable value and Green Vehicle Rating of a car or other vehicle. The dutiable value of your vehicle is the retail selling price of the vehicle plus any amount paid for optional features.

The Stamp Duty payable for new vehicles, with a Green Vehicle Rating is calculated using the tables below. Used vehicles, or vehicles with no Green Vehicle Rating, calculate stamp duty at the same rate as C-rated motor vehicles in the table below.

First determine the Green Vehicle Rating of your car:

Then use that rating, and the value of your vehicle, to determine the rate of stamp duty payable: 

The PPSR is a register put together by the Australian Government which allows finance companies and other businesses to register their security interests over personal property. It also allows other parties to search and view these security interests.

 In the context of the Personal Property Securities Register, personal property is a form of property that is not land or buildings and covers things such as cars, art, machinery, crops, licenses, intellectual property and contract rights.

Personal property security is when a finance company uses personal property as security against a loan. For example, if you borrow money from a lender to buy a car, the lender may take ownership of the car if you fail to meet the obligations you agreed to when you took out the loan.

The benefits of the PPSR are two-fold:

• The PPSR helps to protect suppliers and finance companies from incurring losses when a customer defaults on a loan or does not fulfil another agreed obligation
• The PPSR allows businesses and individuals to check whether the personal property they are buying has a security interest over it before the purchase is made

This is important, as if you buy a car, for example, which still has money owing on it (and the lender still has a security interest registered with the PPSR), the car could be repossessed if the original owner defaults on the loan.

The PPSR can be searched for a fee via https://www.ppsr.gov.au.

Since FY13, the ATO has been giving small businesses the opportunity to claim an upfront tax deduction of $5,000 on the purchase of any motor vehicle over the value of $6,500. You will also be able to claim a tax deduction on the depreciating value of your vehicle by adding the purchase price to your small asset pool.

To calculate how much you will be able to claim for, subtract the $5,000 from the value of your vehicle and then deduct 15% from this figure for the first year and 30% for any subsequent years you have owned the vehicle.

For more information, please visit the ATO website.

Small businesses with a combined annual turnover of less than $2 million are now eligible to receive an immediate tax deduction on any assets they purchase below the value of $20,000.

Assets can be new or old, but they must have been acquired between 7:30pm (AEST) on 12 May 2015 and 30 June 2018.

To put it simply, any item used for running a business will be 100% tax deductible.

Eligible items include, but are not limited to: cars, vans, utes, trailers, motorbikes, lawnmowers, ovens, fridges, coffee machines, other machinery, kitchens, tables and chairs, carpets, printers, photocopiers, tools, welding equipment, saws, generators, pumps, solar panels, heating units, hot water units, water tanks, air conditioning units, sound and security systems and computers.

Purchases such as garden plants and capital works are not eligible for a tax deduction as their value depreciates in a different way.

For a full list of eligible items, please visit the ATO website.

Assets valued at $20,000 or more (which can't be immediately deducted) can be placed in the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter.

A car loan (which can be referred to as a secured car loan if security is sought by the lender) involves a finance company lending you the money to purchase an asset and retaining security over it for the life of the loan. Car loans can be arranged for both personal use (such as a consumer car loan) or business (such as a chattel mortgage).

By taking out a car loan to finance your next car you can reduce your overall cash outlay which you may want to use for other purposes (such as taking a holiday!). If you’re a business, a car loan may improve your cash flow, as well as potentially allowing you to claim a tax deduction for the car (check with your accountant for eligibility). 

There may be tax benefits if you are financing a car for business purposes. Please visit the ATO website, or speak to your accountant to understand potential tax deductions for your specific purposes. If you are considering a novated lease, you can use our novated lease calculator to get an estimate of the potential savings available.

A secured car loan is a relevant option for an individual or business looking to access lower interest rates and has sufficient serviceability. For an employee of a business looking to salary package benefits of their employment, a novated lease may be more appropriate.

There are a number of other finance options available rather than a secured car loan including a personal (unsecured) car loan or a novated lease for personal use. If you're intended to use the car the majority of the time for business use you way want to consider a chattel mortgage. 

By using our service and talking to our expert team, we will be able to compare car loan rates from over 30 lenders for you to ensure you're getting a great deal. You can also compare our car loan rates against the Big4.

A green car loan is a secured car loan that often offers a more competitive interest rate than comparable non-low emission vehicle financing options, rewarding you for helping do your part to lower our environmental impact.

By financing your low emission vehicle with a green car loan to finance your next car you can reduce your overall cash outlay which you may want to use for other purposes (such as taking a holiday!). If you’re a business, a car loan may improve your cash flow, as well as potentially allowing you to claim a tax deduction for the car (check with your accountant for eligibility).

A car loan (also referred to as a secured car loan) involves a finance company lending you the money to purchase a vehicle for personal use. The loan is secured against the vehicle and, when the final repayment has been made, you will own the vehicle outright.

Benefits and product features of most car finance solutions include flexible loan repayment periods, the ability to set a balloon or residual which will reduce your monthly repayments and lower interest rates versus a personal loan thanks to the loan being secured against the vehicle itself. As a business, a car finance solutions may help you improve cash flow to your business, as well as the potential to claim tax deductions if the car is being used for business purposes (check with your accountant for eligibility).

A comparison rate is an interest rate that lenders are required by law to display next to any advertised interest rate. A comparison rate calculates the loan interest rate and fees you may have to pay, including application fees and ongoing loan fees. This allows you to find out the true cost of the loan. We have a comparison rate calculator you can use to compare apples with apples.

There are many ways you can potentially reduce your car loan repayments including borrowing less money (surprise!), adding in a deposit, opting for a longer loan term or adding in a residual or balloon to your loan.

The Federal Government's Temporary Investment Allowance for general business and small business - also known as the Small Business and General Business Tax Break - is a temporary additional tax deduction available to businesses when they purchase eligible new assets, or invest new funds in existing assets.

There are three levels of additional tax deductions available, depending on whether the business is a small or general business, when the assets are acquired, and when they are installed ready for use.

Please note: The Temporary Investment Allowance is no longer available for asset purchases made after 31 December 2009. This information is provided for reference purposes only.

The additional tax deductions available under the Federal Government Temporary Investment allowance are:

• For small business - 50 per cent of the cost (excl. GST) of eligible new depreciating assets acquired under a contract, or started to be constructed, after 12.01am AEDT 13 December 2008 and before the end of December 2009, and installed ready for use by the end of December 2010, and,
• For general business - 30 per cent of the cost (excl. GST) of eligible new depreciating assets acquired under a contract, or started to be constructed, after 12.01am AEDT 13 December 2008 and before the end of June 2009, and installed ready for use by the end of June 2010, and,
• For general business - 10 per cent of the cost (excl. GST) of an eligible asset acquired under a contract, or started to be constructed, between 1 July 2009 and 31 December 2009, and installed ready for use by the end of December 2010.

These tax deductions are in addition to any other applicable tax deductions for the assets, and are claimable in the Financial Year in which the asset is installed and ready to use.

This means the total tax deduction for eligible assets is 150% or 130% or 110% of the total cost price (excl. GST), with 50% or 30% or 10% claimable up-front in the year in which the asset is installed ready for use, and the other 100% claimable as per normal over the effective life of the asset.

Please note: The Temporary Investment Allowance is no longer available for asset purchases made after 31 December 2009. This information is provided for reference purposes only.

New, tangible, depreciating business assets and new expenditure on existing assets are elibigle for the Temporary Investment Allowance tax breaks, including most:

• Cars
• Trucks
• Machinery
• Equipment

Intangible assets such as computer software and intellectual property rights do not qualify for the tax break.

Bear in mind that there are also minimum spend requirements for an asset to be eligible. Additionally, there are some limitations and exclusions: for example, deductions on luxury cars will be capped at the Luxury Car Limit.

Please note: The Temporary Investment Allowance is no longer available for asset purchases made after 31 December 2009. This information is provided for reference purposes only.

The minimum spend required for the Federal Government Temporary Investment Allowance (Small Business and General Business Tax Breaks) to apply are different for small business and general business:

• Small businesses must spend at least $1,000 (excl. GST) per asset
• All other businesses must spend at least $10,000 (excl. GST) per asset

The minimum spend applies to all three tiers of tax breaks. Although the minimum spend requirements apply per asset, the threshold may also be met by the sum of expenditure on groups of assets that are identical or largely the same, and sets of assets.

The definition of a small business is a turnover of less than $2 million in the last financial year (if in operation) and an expected turnover of less than $2 million in the current financial year.

Please note: The Temporary Investment Allowance is no longer available for asset purchases made after 31 December 2009. This information is provided for reference purposes only.

For the purposes of the Government Temporary Investment Allowance, "new" means that the asset must not have been used before.

The Temporary Investment Allowance only applies to new, tangible, depreciating assets and new expenditure on existing assets. The tax break is not available for the purchase of second-hand, or used, assets.

Please note: The Temporary Investment Allowance is no longer available for asset purchases made after 31 December 2009. This information is provided for reference purposes only.

Demonstrator vehicles are considered to be "new" assets for the purposes of the Federal Government Temporary Investment Allowance.

They must only have been used for reasonable testing and trialling.

Please note: The Temporary Investment Allowance is no longer available for asset purchases made after 31 December 2009. This information is provided for reference purposes only.

To qualify for the small business (50 per cent) tax break under the Government's Temporary Investment Allowance, the eligible assets must be acquired (under a contract) or started to be constructed between 13 December 2008 and 31 December 2009, and must be delivered, installed and ready for use by the end of December 2010.

To qualify for the general business (30 per cent) tax breaks, the eligible assets must be acquired (under a contract) or started to be constructed between 13 December 2008 and 30 June 2009, and must be delivered, installed and ready for use by the end of December 2009.

To qualify for the general business (10 per cent) tax breaks, the eligible assets must be acquired (under a contract) or started to be constructed between 1 July 2009 and 31 December 2009, and must be delivered, installed and ready for use by the end of December 2010.

Please note: The Temporary Investment Allowance is no longer available for asset purchases made after 31 December 2009. This information is provided for reference purposes only.

Debtor Finance is the name given to a range of finance products and facilities which are designed to advance funds to a business, based on outstanding invoices for goods and services provided to other businesses on credit terms.

Debtor Finance helps businesses to manage their cashflow, by ensuring prompt receipt of funds for invoices issued on credit terms.

Debtor Finance is also known as Cashflow Finance, Invoice Factoring and Invoice Discounting.

To be eligible for Debtor Finance a business must be trading with other businesses on credit terms. In addition, the invoiced goods and services must be delivered in full.

Neither business to consumer (non-business) invoices, nor invoices on terms other than credit (eg. COD) are eligible for Debtor Finance.

Businesses that may benefit from Debtor Finance solutions new businesses, fast-growing business and established businesses that require flexible working capital to support growth, expansion, restructuring - even mergers and acquisitions.

Real estate security is not usually required for Debtor Finance approval. Generally, the finance is secured by the value of the debtor ledger combined with a company charge and director or shareholder guarantees. Specific assets may be required as additional collateral, but generally real estate security is not required.

As the limit of the Debtor Finance facility is primarily determined by the debtor ledger, most facilities automatically grow in line with sales rather than being linked to the relatively fixed value of property.

Export businesses trading with other businesses on credit terms may also be eligible for Debtor Finance.

The right Debtor Finance product may be able to provide credit protection as well as assistance with debt collection in foreign languages and timezones. Advanced funds may also be able to be provided in foreign currencies as invoiced.

Export businesses trading with other businesses on credit terms may also be eligible for Debtor Finance.

The right Debtor Finance product may be able to provide credit protection as well as assistance with debt collection in foreign languages and timezones. Advanced funds may also be able to be provided in foreign currencies as invoiced.

A Recourse Debtor Finance Facility is the advance of funds against unpaid outstanding invoices where the credit risk remains with the supplier company. In the event of bad debt (where the invoice is not paid by the customer) the supplier company would have to pay back the funds advanced by the financier.

A Non-Recourse Debtor Finance Facility is the advance of funds against unpaid outstanding invoices where the credit risk is transferred to the finance company. In the event that the invoice is not paid by the customer the bad debt is covered by insurance - the supplier company does not need to repay the advanced funds. For this reason, Non-Recourse Facilities are often more expensive and more restrictive than Recourse Facilities.

In the event of a bad debt (the customer does not pay an invoice), the obligations of the borrowing company will depend on whether the Debtor Finance Facility is a Recourse Facility or a Non-Recourse Facility.

If the facility is a Recourse Facility, any funds advanced will need to be repaid to the finance company. If the facility is a Non-Recourse Facility, the bad debt will be covered by insurance and no repayment will be required.

We offer our customers a wide range of commercial and equipment finance solutions including a chattel mortgage, asset lease and cashflow finance.

We work with a wide range of commercial lenders to suit all needs including Macquarie, Pepper, Westpac and Metro Finance just to name a few.

Companies and businesses that utilise commercial finance often do so to allow them grow their operations or better manage their cashflow. There are a range of commercial finance options we can assist you with.

A novated lease is a three-way agreement between you, your employer and stratton that bundles together all the finance and running costs of your car and allows you to pay with pre-tax dollars.

• Tax and gst savings
• Budgeted running costs

• Vehicle finance
• Comprehensive insurance (or you can arrange your own)
• Registration
• Fuel
• Maintenance such as servicing, tyres, battery replacement and repairs
• Roadside assistance
• Plus awesome stratton service

GST is payable on the sale of most new and used vehicles where the seller is registered for GST (e.g. a dealership). With a leased vehicle, the vehicle is sold to the lender who then in turn leases it to you. The lender pays the full amount of the sale price of the vehicle to the supplier, who then passes the GST on to the Australian Tax Office. As GST cannot be paid twice on the same transaction, the financier claims the GST component that they have paid to the supplier back from the ATO (up to a maximum of one-eleventh of the current Luxury Car Tax Threshold). This refund of the GST is known as an Input Tax Credit (ITC).

Because of the ITC claim, the GST on your vehicle is reduced or eliminated, and the financier essentially leases the vehicle to you at the full sale price less the GST component. In addition to the GST on the sale price of the vehicle, GST is payable on lease and operating costs, a portion of these can be refunded back to you as your employer claims an ITC, therefore making your novated lease partially exclusive of GST.

The residual value (sometimes known as a balloon payment) is the amount of money remaining on your car at the end of the finance period. This amount is fixed and attracts gst. The residual value is calculated at the beginning of the lease and is payable at the end of the term.

The minimum residual value is set by the ato and is usually expressed as a percentage of the amount financed.

Once your lease term expires you’ll need to pay the residual value. Or you may have the option to re-finance your car for another term.

If the market value of the vehicle is less than the residual value, the resultant shortfall will be your responsibility. Likewise, should the market value be more than the residual value, the surplus shall be yours to keep (tax free)!

You’re available to choose any car, any make, any model from anywhere within australia. This can be:

• A new car (get access to fleet discounts for the very best price)
• A second-hand car (with some restrictions for age and value)
• Your current vehicle (under a sale and lease-back arrangement)

If you leave your employer for any reason, your lease agreement (the deed of novation) terminates immediately.

Don’t worry there are plenty of options we can help you with.

You can then choose to either:

• Continue your monthly lease payments yourself (un-novated)
• Pay out the remaining amount of the lease (including the residual value) and keep or sell the car
• Transfer your novated lease to a new employer

Here’s the part most people find complicated.

When your employer provides you as the employee with a benefit as part of your employment, the benefit may be subject to FBT. It’s a Federal Government tax, payable on the value of certain fringe benefits. Salary packaging a vehicle is concessionally treated for FBT purposes and therefore may be very tax-effective.

When a vehicle is salary packaged via a novated lease, FBT is usually calculated using the statutory formula method. This method calculates the FBT payable each year by applying a statutory percentage to the vehicle's FBT base value (the purchase price minus government charges). This is multiplied by the number of days that the vehicle is available to you, grossed-up by a factor (normally 2.0802) and then multiplied by the FBT rate (currently 47%).

No distinction is made between business and private use so a novated lease using the statutory formula method will be attractive to you if you don’t use your car for business use.

Fbt is calculated based upon the fbt year, which runs from 1 april to 31 march.

We know life never works out as planned but your novated lease is flexible enough to keep up with your life. Your running cost budget can be altered at any time to reflect any change in circumstances. Any unspent money can be reimbursed through your payroll at any time if you feel you have an unnecessary surplus.

You can package as many vehicles as you’d like, as long as your employer agrees and you’re able to service the monthly payments. You can extend the benefits of novated leasing to more than one car.

Chat with us about your car leasing options if you’d like to package up two or more vehicles.

There are a few reasons that an employer would choose to offer a novated lease option for their employees.

• It helps to attract and retain top employees who appreciate the flexibility of salary packaging
• Allowing you access to your pre-tax wage has a similar effect to a pay-rise, with none of the costs to your employer.
• Your employer will not need to supply and manage a company vehicle for you to use for business travel

The ECM enables you to reduce your FBT liability by making post-tax contributions towards the operating costs of your vehicle. The recommended method is to contribute an amount equivalent to the taxable value of the vehicle thereby reducing it to zero. Providing you travel the nominated kilometres per annum, this reduces the FBT liability to zero. "Why would I make after tax payments towards my vehicle when salary packaging is supposed to reduce my gross salary so that I pay less income tax?"

That’s a common question! The simplest answer is that by making a payment after tax toward the running costs of the vehicle, you can offset any FBT liability.

The ECM can be applied to both types of novated lease packages. With the fully maintained novated lease, the required amount of your post-tax contribution is calculated as part of your package and shown in the salary package confirmed estimate.

With a non-maintained novated lease, you will keep receipts for operating costs that you’ve paid and submit these (along with a vehicle declaration form) to your employer at the end of the FBT year - 31 March. Your employer will then adjust the taxable value of the vehicle by the amount of the receipts, removing some or all the FBT liability from your salary package.

Common reasons for refinancing your home loan or investment loan include:

• Home improvement such as remodelling, refurbishment, installing a pool or adding outbuildings.
• Debt consolidation to pay off credit cards, store cards and other loans.
• Saving money by refinancing to a mortgage with a lower interest rate or reduced fees.
• Accessing loan features better suited to your current situation, for example switching from a variable rate to a fixed rate
• Accessing equity in your home for overseas travel, investment property and other purposes

If you're no longer happy with your current lender or loan, or your financial situation has changed, you may wish to consider refinancing.

Refinancing can be useful, potentially allowing you to access the equity you have in your property, get on top of debt or save money. However, there are also potential costs (both direct and indirect) that you should be aware of before you decide to refinance.

Costs of refinancing a home loan or investment property loan may include:

New loan fees

• application, establishment and registration fees
• valuation fees
• mortgage insurance (depending on the loan-to-valuation ratio)

Current loan fees

• early payment or settlement penalties and fees
• discharge fees

While refinancing can save you money, you can also end up paying more interest over the life of the loan if you add additional time to your existing loan period.

To find out whether refinancing is the right option for you, visit Lendi.com.au and chat to a specialist.

Guaranteed Asset Protection (GAP) Insurance, or Motor Equity Insurance, provides loan settlement cover, and may also provide additional cover, in the event of a total loss claim payout on a vehicle you have under finance.

Loan settlement cover is paid by your GAP insurer to your financier when a total loss payment made by your comprehensive vehicle insurer does not cover the total amount required to settle (payout) your loan contract. When there is a "gap" between the amount paid and the payout amount on the loan, loan settlement cover will be paid to your financier to cover this difference up to the relevant limits.

The maximum amount payable in loan settlement cover will depend on your specific policy and will be specified in your policy documents.

Extra cover may be paid when you incur necessary additional costs as a direct result of a total loss claim being paid out by your comprehensive motor vehicle insurer. Costs covered by GAP Insurance Extra Cover may include:

• your comprehensive motor vehicle insurance excess
• delivery charges
• registration costs
• stamp duty
• car hire

The maximum amount payable in extra cover will be specified in your policy schedule.

To be eligible to apply for GAP Insurance cover you must have:

1. A loan contract on your vehicle
2. Comprehensive insurance arranged for the vehicle

If your comprehensive insurance police settles your total loss claim with a Replacement Vehicle, you may be able to transfer your existing GAP insurance cover to the Replacement Vehicle.

This may require:

• the approval of your finance company
• transfer of the existing, unaltered finance contract to the Replacement Vehicle

Caravan Loans should allow you to set your term based on your needs, provide a fixed repayment schedule, allow for a residual (or balloon) as well as offer you the ability to repay your loan early depending on the lender.

We have an unmatched panel of lenders available to our customers looking to Caravan Finance. Talk to us today and we can help you find the right loan option for your needs.

A boat loan (which can be referred to as a secured loan if security is sought by the lender) involves a finance company lending you the money to purchase the asset and retaining security over it for the life of the loan. Boat loans can be arranged for both personal use (such as a consumer loan) or business use (such as a chattel mortgage).

By taking out a loan to finance your next boat you can reduce your overall cash outlay which you may want to use for other purposes (such as taking a holiday!). If you’re a business, a boat loan may improve your cash flow, as well as potentially allowing you to claim a tax deduction for the asset (check with your accountant for eligibility). 

Boat loans should allow you to set your term based on your needs, provide a fixed repayment schedule, allow for a residual (or balloon) as well as offer you the ability to repay your loan early depending on the lender.