If you run a business and you need a new car, a business car loan can provide you with a range of benefits beyond just the vehicle itself. Read on to find out everything you need to know about business car loans in Australia, including answers to FAQs.
Can you buy a car with a business loan?
Yes, provided that you:
- Have an active Australian business number (ABN),
- Will use your car for business purposes at least 51% of the time.
- Can afford to make your monthly or weekly loan repayments?
You can lower your loan repayments in two ways:
1) By taking out your loan over a longer term. Car loan terms range from one to seven years.
2) By having a balloon payment. This is a larger final payment at the end of the loan term in exchange for lower regular repayments.
Can you get a business car loan if you’re a sole trader?
Yes, provided you can show evidence of regular income to afford your monthly or weekly loan repayments. For example, by your most recent business activity statements (BAS), tax returns, bank account statements or financial statements that have been prepared by your accountant.
But even if you don’t have a lot of documentation for your business, you might be eligible for a low or no doc loan with some lenders.
Can you claim a car loan as a business expense?
Yes, you can claim the interest on your car loan and any other loan fees as a business expense. This will reduce the amount of tax you need to pay on your business income.
You may also take advantage of the temporary full expensing scheme up until 30 June 2023 to write off the full purchase price of your business vehicle on your tax if you structure your loan the right way.
Is cash or finance better for a business vehicle?
Finance can help your business cash flow and working capital. It removes the need to come up with a large upfront payment for your new car. Instead, you can spread your payments to suit your cash flow. Of course, you pay interest on your loan, but you can write that off as a business expense to pay less tax.
Which bank is best for car loans?
There is no definitive answer to this question. The Australian car loan market is very competitive. It’s best to talk to an experienced car finance broker like one of our team at National Loans. We stay up to date on all the latest deals on offer from banks and other lenders in the market. You can contact us on 1300 358 358.
How do you get a business car loan?
The best way to get a car loan through your business is to talk to one of our team or apply online. Ideally, do this before you start looking for a new car so that we can find you a great deal and arrange a loan pre-approval. That way, you’ll know your vehicle price range before you start looking.
And that’s not the only benefit. It will give you bargaining power with dealers and private sellers, because you will be able to negotiate on price knowing that your finance is already approved. You will also be able to avoid dealer-arranged finance, which is usually more expensive.
Still not sure how to get a business car loan? Contact National Loans for or apply online to find out if you are eligible for business car lending.
