Question 1

What is the most suitable loan product to finance a truck?

Accepted Answer

All types of heavy vehicles can be financed with the business owner’s choice of Lease, Hire Purchase, Chattel Mortgage or Rent-to-Own. All credit facilities provide benefits to suit different business objectives and accounting practices. The most suitable product is the one which aligns with the method of accounting and the approach the business takes to asset acquisition with the balance sheet.

Question 2

Do I need to be registered for GST to be eligible for a truck loan?

Accepted Answer

Registration for goods and services tax (GST) is not an essential requirement to be eligible for commercial loans. Applicants will need and ABN and ID, and financial records and documents are required. Many lenders do view registration for GST favourably when assessing applications.

Question 3

Are loans for used trucks the same as for new models?

Accepted Answer

The same commercial credit facilities can be used to fund new and used vehicles but the interest rate, conditions, loan amount, and term can be different. Lenders assess used vehicles when considering the loan to value ratio and when preparing offers.

Question 4

What is the difference on financing for diesel, hydrogen and electric heavy vehicles?

Accepted Answer

Heavy vehicles with all types of fuel systems – diesel, electric, hybrid, and hydrogen, may be financed with the same loan products.

Question 5

How do I work out loan repayments using an online calculator?

Accepted Answer

To work out loan estimates using an online finance calculator, users enter the amount they want for their loan, the interest rate for the selected loan product, the percentage for a balloon if required, and the preferred term. The calculator automatically displays the estimated repayment based on those figures. The results are estimates and a quote should be requested for a confirmed offer.

Question 6

Can I have the complete purchase price of a new vehicle included in the finance?

Accepted Answer

Including the complete purchase price of a new heavy vehicle in a loan is a common practice, but is subject to lender approval. Lenders will be considering the credit profile and financials of the business for capacity to handle a loan of that size.

Question 7

Do truck loan interest rates change when the RBA changes rates?

Accepted Answer

Heavy vehicles are financed with asset acquisition credit facilities which are generally arranged with a fixed rate of interest. This fixed rate does not change with RBA rate decisions.

Question 8

What happens at the end of a truck lease?

Accepted Answer

At the end of a heavy vehicle lease, after the last monthly payment is made, the lessee can decide to finalise the residual and take ownership of the vehicle or return the vehicle to the lender without finalising the residual.

Question 9

Are truck finance repayments a tax deduction?

Accepted Answer

Repayments on Rent-to-Own and Leasing are treated as business expenses and are a tax deduction. Repayments on Hire Purchase and Chattel Mortgage are not fully-deductible. The interest component of the payments is a tax deduction, and the main tax deduction is realised through depreciation of the vehicle over the working life.

Question 10

Can loans for trucks be sourced before the vehicle is purchased?

Accepted Answer

Yes. Applications for heavy vehicle financing may be submitted and approved based on the applicant’s estimate of the loan required, and of the vehicle being considered. Conditional loan approval is given with final approval dependent on the details provided after the vehicle is purchased.

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