Truck Finance Guide

Most trucks in Australia are bought with finance. The right structure keeps repayments in line with what the truck earns, and can make a real difference to your tax position and cash flow. This guide explains the common options, what lenders look for and how to improve your chances of approval.

This guide is general information only, not financial, credit or tax advice. Talk to a licensed finance broker or lender and your accountant about your own circumstances.

The main types of truck finance

Chattel mortgage

The most common choice for businesses. You own the truck from the start and the lender takes security over it. If you are registered for GST, you can usually claim the GST in the purchase price on your next BAS, and you may be able to claim depreciation and interest as deductions. Repayments are fixed, and you can usually choose a balloon payment.

Finance lease

The lender owns the truck and leases it to you for a fixed term, with a residual value payable at the end if you want to keep it. Lease payments may be tax deductible, and GST is paid on each payment rather than upfront.

Commercial hire purchase

The lender owns the truck while you pay it off, and ownership passes to you with the final payment. It is less common than it used to be, with chattel mortgages now more popular.

Operating lease and rental

You use the truck for a set term and hand it back, often with maintenance included. This keeps the asset off your balance sheet and suits fleets that replace trucks on a fixed cycle, but you build no equity.

Consumer loans

If you are buying a truck mainly for personal rather than business use, a consumer loan applies, which is covered by consumer credit laws.

Deposits, terms and balloons

• Deposit: many lenders offer low or no deposit finance to established businesses, but a deposit can lower the interest rate and help a newer business get approved.
• Term: commonly up to five years, sometimes longer for new trucks. A longer term lowers repayments but increases total interest. Lenders may limit the term so the truck is not too old at the end.
• Balloon or residual: a lump sum at the end of the term that lowers regular repayments. Plan how you will pay it: from savings, by refinancing, or by selling or trading in the truck.

What lenders look at

• How long your ABN has been active and your GST registration. Businesses trading for two years or more usually have the most options.
• Credit history for you and your business.
• Industry experience, especially for a new business.
• Income evidence: financial statements, BAS or bank statements, and contracts or work lined up for the truck.
• The truck itself: its age, value and resale strength. Many lenders have maximum ages for used trucks at the end of the term.
• Who you are buying from: some lenders treat dealer and private sales differently; most will finance a private sale with the right checks.

How to improve your chances

• Check your credit file and fix any errors before you apply.
• Have your financial statements, BAS and tax returns up to date.
• Get pre-approval before you shop, so you know your budget and can move quickly.
• Show the work the truck will do: contracts, letters of intent or a customer history.
• Consider a deposit or a trade-in.
• Use a broker who specialises in truck and equipment finance; they know which lenders suit which situations.

Before you sign

• Compare the comparison rate and all fees, not just the headline interest rate.
• Check early payout costs and any restrictions.
• Make sure repayments are affordable in a quiet month, not just a busy one.
• Run a PPSR search on the truck. If the seller has finance owing, make sure it is paid out at settlement.
• Arrange comprehensive insurance: lenders usually require it.

Factor finance into the full cost of ownership with our truck cost guide, then browse trucks for sale.