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| Option | Ownership and use | Main check |
|---|---|---|
| Vehicle loan or chattel mortgage | Business buys the vehicle; lender takes security | Deposit, total repayments, balloon and payout terms. |
| Hire purchase | Vehicle use with ownership transferring under the agreement | Final payment and title-transfer conditions. |
| Lease | Use under the lease terms | Residual, return, usage and end-of-term obligations. |
| General business loan | Borrowing not necessarily tied to the vehicle | Compare cost, term and any wider security. |
| Novated arrangement | An employee, employer and financier arrangement | Assess separately from ordinary business vehicle borrowing. |
Choose a vehicle the business can use economically
Budget for registration, insurance, fuel or charging, maintenance, tyres and time off the road. A cheaper used truck may need repairs which outweigh the finance saving. A new vehicle may have a higher purchase price but a different warranty and downtime profile.
For a fleet, plan replacement dates and utilisation across the vehicles. Several finance agreements ending together can create a large cash requirement even when each individual payment appears manageable.
Give the lender the vehicle details before paying a deposit
A vehicle budget becomes a finance proposal once you have the supplier, price, description and intended use. Ask whether the lender accepts the vehicle's age, condition, seller and proposed use. A delivery van bought from a dealer and an older specialised truck bought privately may require different checks, even at the same price.
Confirm what happens to your deposit if finance is declined or settlement is delayed. Read the purchase agreement before assuming it is conditional on finance. If you need modifications, list their cost and timing separately: a refrigeration unit or tray conversion may be essential to earning revenue, although the advertised vehicle price excludes it.
Provide a clear view of how the vehicle earns or protects income. An additional van serving confirmed delivery work has a different repayment case from replacing a functioning vehicle mainly for convenience. For replacement finance, include the cost and disruption avoided by retiring the old vehicle, without treating every possible breakdown as a certain saving.
Compare the whole month on the road
Suppose one illustrative van costs $750 a month to finance and $650 to run. Another costs $900 to finance and $400 to run. The second has the higher instalment but a lower combined monthly outlay: $1,300 against $1,400. Check the assumptions behind fuel, maintenance and insurance rather than selecting on that difference alone.
For electric vehicles, include charging access, installation and downtime alongside energy costs. For a heavy vehicle, consider licences, maintenance schedules and whether work depends on one driver. A finance quote does not resolve these operating constraints.
Keep the trade-in, vehicle price and finance separate
Ask for the vehicle's cash price before discussing the monthly repayment. Show optional warranties, insurance or accessories separately so you can decide whether to buy them and whether their cost is being financed.
If you are trading in a vehicle, get its value and the existing loan payout as separate figures. In an illustrative deal, an $18,000 trade-in with a $22,000 payout leaves a $4,000 shortfall before the replacement vehicle is funded. Establish where that shortfall is paid; it does not disappear into the trade-in.
Compare written quotes using the same replacement price, cash deposit, term, repayment frequency and final balloon. Identify the lender and all fees, including any process or cost for selling the vehicle early. That gives you a clear borrowing decision alongside the vehicle decision.
Plan the balloon around a conservative resale estimate
For illustration, a $25,000 final payment against an expected $30,000 resale value leaves only $5,000 before selling costs and any replacement deposit. A lower resale price could leave a shortfall. Do not treat the expected resale value as a promise from the lender.
Test whether the business could still make the final payment if resale is weaker or a refinance is declined. A fully repaying loan may have higher instalments but a different end position.
Plan for replacing or losing the vehicle before the term ends
If the business expects to change the vehicle after three years, request the loan payout process for that date even when the proposed term is five years. The outstanding debt and sale value can move at different speeds. A low deposit or substantial balloon may leave little equity for the next purchase.
Ask the insurer and financier how a write-off or theft would be handled. An insurance settlement should not be assumed to equal the amount needed to clear the finance. Check any proposed cover against its actual exclusions and price rather than accepting it because it is bundled into the repayment.
For a growing fleet, prepare one schedule covering vehicle use, maintenance, finance balances and replacement dates. Include vehicles already financed elsewhere. It makes a cluster of upcoming final payments visible and helps explain the total fleet commitment to a prospective lender.
Business.gov.au's buying and leasing guidance provides a useful starting point for the ownership decision (checked 5 October 2026). The final comparison still needs the written vehicle offer, finance terms and operating budget.
Tax treatment needs the actual use and agreement
Business and private use, the vehicle type, GST status and finance structure can affect tax treatment. Ask your accountant about the current rules. Do not apply an old car depreciation limit or an electric-vehicle concession to every purchase.
Choose a payment plan that still works after fuel, maintenance, insurance and quieter trading are included. Before signing, check the debt expected to remain at your planned replacement date.
What business car finance costs
For context, the RBA reports 7.23% p.a. for new small-business loans in August 2026. This is an average across different loan types, not a quote for this product or a rate every borrower can obtain. See how to compare business loan rates and use your written offer for the repayment calculation. Source checked 10 October 2026.
What our 2023 dealer-finance survey measured
A Small Business Loans Australia survey of 202 SME directors and decision-makers, published on 26 September 2023 in a report labelled October 2023, found that 56% were not confident a dealer would offer the best finance, while 44% were confident. Some 97% said they would compare elsewhere. These were attitudes and intended actions in a historical survey, not a test showing dealer finance was more expensive.
The reported comparison preferences were their own bank (33%), online platforms (28%), a broker (25%), other top banks (11%) and accepting the dealer offer (3%). The retained report does not establish a fieldwork month or a probability sample of all Australian businesses. Use the findings as background for requesting an outside quote, not as a forecast of the saving you will receive.
Asset-finance fees to confirm in the quote
Provider sources checked on 10 October 2026. CommBank’s car and equipment finance page describes a one-off documentation fee, paid upfront or financed, without publishing a universal amount. Its product starts at $20,000 and has no monthly loan fees. Eligibility and the offered rate still require assessment.
Westpac’s live equipment-loan page links a fee schedule dated 23 August 2024. That schedule states a $500 vehicle/equipment establishment fee, with inspection, registration and other charges where applicable. It lists early termination charges separately from variable break costs. Confirm the current quote: a linked older fee schedule is useful evidence of the charge structure, but is not a promise that every 2026 application receives those amounts.
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Sources and further reading
- CommBank: car and equipment finance (checked 10 October 2026)
- Westpac: equipment finance structures (checked 10 October 2026)