Question 1

What is the best loan to finance a Kenworth truck?

Accepted Answer

KW trucks can be financed with Lease, Chattel Mortgage, Hire Purchase and Rent-to-Own. Which one is the best choice will depend on the accounting method used by the business, the approach adopted to assets on the balance sheet, tax preferences, and overall financial objectives for the business.

Question 2

How do I get my finance confirmed before I order my Kenworth?

Accepted Answer

Applications for heavy vehicle financing can be approved prior to the vehicle being selected, ordered or purchased. Lenders will require details of the vehicle that the applicant intends to purchase, and an estimated amount required for the loan. Alternatively, the applicant may submit their financials with a request for lenders to advise the highest amount they can be approved for. Pre-purchase applications are given conditional approval. The offer and approval is amended and finalised when the purchase is confirmed.

Question 3

Will my Kenworth finance interest rate change when the RBA changes rates?

Accepted Answer

Heavy vehicle loans are generally offered with a fixed rate of interest. The fixed rate remains unchanged over a fixed repayment term. The rate would not change when the RBA or the lender makes rate changes.

Question 4

Will I be able to deduct my Kenworth loan repayments as a business expense?

Accepted Answer

Repayments on Leasing and Rent-to-Own are treated as business expenses by the ATO and tax-deductible. The interest included in monthly Chattel Mortgage and Hire Purchase repayments are deductible but not the full repayment amount. These loan products have deductions through asset depreciation of the vehicle.

Question 5

What assets will I need to put up as security for a loan on a Kenworth?

Accepted Answer

New vehicles are generally accepted as loan security and, for many businesses, the sole form of security. Used vehicles need to be assessed by lenders as acceptable security. Smaller enterprises may be required to provide additional assets as extra collateral.

Question 6

What is the best Kenworth loan option for a new operator?

Accepted Answer

New operators can select from Lease, Chattel Mortgage, Hire Purchase and Rent-to-Own. But where they do not meet lender criteria with minimum trading period or financial documentation, they can seek no and low doc loans through brokers.

Question 7

How can I finance a trailer and a new Kenworth?

Accepted Answer

Where a trailer and a KW vehicle are purchased from different dealers and/or in separate transactions, separate loans will be required for each unit. Where acquired as a complete unit in one transaction, a single loan may be used to cover the entire purchase.

Question 8

What loans terms can I get on financing a Kenworth?

Accepted Answer

The term approved by lenders will depend on the strength of the application, vehicle age and condition, and lender guidelines. Terms of up to 7 years are typical.

Question 9

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

Accepted Answer

The same credit facilities are used to finance new and used KW trucks. The interest rate, term, loan total and conditions can be different for used vehicles and may depend on the age and condition.

Question 10

What is a balloon?

Accepted Answer

A balloon is a portion of a loan which is due for finalising in full at the conclusion of a loan term. It applies to Hire Purchase and Chattel Mortgage.

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