This is a commercial lending product and is not covered by the National Consumer Credit Protection Act.
A Chattel mortgage is a loan normally used to purchase motor vehicles or plant and equipment. (“chattels”)
The purpose of the the loan is to be primarily for business purposes and the borrower should have an ABN.
Under a Chattel Mortgage a finance company lends money to the customer to purchase the goods or chattel/s, and the customer makes regular repayments. These payments can be paid monthly, or quarterly, or seasonally, to suit the borrower’s cash flow.
The customer takes ownership of the vehicle at the time of purchase.
A fixed charge is registered with the PPSR (Personal Property Securities Register) to warn any potential future buyers, that a loan exist’s over the goods which must be cleared before being re-sold. The finance company releases that charge once the loan is repaid.
The goods can be purchased from a private vendor or a licensed motor car trader.
This type of finance is the most popular as it allows the customer in most cases, for ABN holders to claim back all or part of the GST up front on the purchase of the goods. This varies depending on your financial situation. It is always best to seek professional advice from your financial advisor’s / accountant’s, as they are familiar with your financial situation and better placed to give advice.
Should you wish to talk to us regarding a Chattel Mortgage, please complete the online enquiry form or give us a ring on 1300 559 974.