The start of a new financial year is a popular time for operators to upgrade their light commercial vans. These vehicles can be some of the busiest and hardest working on the roads, requiring more regular upgrading than many other models. But in order to be a cost-effective, workable and affordable acquisition, the light commercial van finance will need to be right. That can mean, minimising monthly repayments and optimising tax deductions.
The choice of loan and the choice of lender can be as equally important as the type of vehicle when it comes to achieving the right outcomes for the business. These choices can determine the interest rate on the loan and the monthly outgoings, which can impact cash flow and profit.
As specialists in commercial vehicle financing, Jade Car Loans source van finance with the best rates to assist operators optimise deductions and minimise costs. Supporting couriers, delivery businesses, tradies, removalists, growers and producers and others, to acquire the right vehicle loans for their business operation.
Selecting the Right Van Finance Facility
Whether buying one of the popular Peugeot, Ford Transit, Toyota HiAce, Hyundai, VW, LDV or Mercedes-Benz models, you want the financing to work as hard as the vehicle. The same credit facilities - Chattel Mortgage, Leasing, and Hire Purchase, are available to fund all light commercial vans. The decision as to which is the right facility, depends on accounting-related aspects of the individual business structure and financial objectives of the operator.
Does your accountant use the cash or accruals method of accounting to prepare your annual accounts? Chattel Mortgage and Hire Purchase suit the cash method and Leasing suits the accruals method.
Do you want the vehicle to be posted to the balance sheet as an asset/liability? This relates to the ownership of the vehicle while the loan is being repaid. Chattel Mortgage allows the ownership to be transferred to the operator on settlement. While with Lease, ownership remains with the lender until the commitment is finalised.
Your Jade broker can explain these differences in more detail, but we do recommend referring to the accountant for clarification as to the best option for an individual operator.
Van Finance Tax Deductions
Tax deductions are an important consideration for businesses as they lower taxable income and tax payable. Effectively reducing business costs and the overall cost of the vehicle. Leasing offers deductible monthly payments, while Hire Purchase and Chattel Mortgage allow for deductions through depreciation of the vehicle and deductible interest payments.
GST applies to Lease monthly payments. With Chattel Mortgage and Hire Purchase, the entire amount of GST on the purchase price is claimed on the next BAS after settlement - no further GST applies to these credit facilities. No GST is charged on the interest component of commercial credit facilities.
Getting Workable Van Finance Repayments
Securing the lowest commercial vehicle financing interest rates is key to lowering the entire financing cost, the individual monthly payments, and as such, the acquisition cost of the vehicle. Rates vary across the commercial lending market, on different credit facilities, and for different operators. Lenders assess applications, especially credit histories, when making interest rate offers.
Using our expert broker services allows operators to access a large number of lenders – banks and finance companies, to secure the lowest rates to suit their profile. We do the hard work, so there’s no need to worry about how long it will take you to cover off on all our 80+ lenders. We actually find you the right lender and the best rates.
Chattel Mortgage and Hire Purchase offer the lowest commercial vehicle rates, and Leasing a slightly higher rate. Operators should assess all the features and benefits of individual credit facilities not only the rate, when deciding on the most suitable solution for the vehicle loan.
Comparing Light Commercial Van Finance
There can be some great deals on commercial vehicles available around tax time with dealers clearing stock at the traditional EOFY sales. But where the buying decision depends on how much the vehicle will cost in monthly payments, just comparing purchase prices may not provide the information needed for an informed decision.
To easily compare loans on commercial vans, operators can use our financing calculator for estimates. This tool can be used for all the different van models and all the credit facility options. It provides quick estimates to automatically turn purchase prices into monthly repayment estimates.
Compare Lease with a Chattel Mortgage option, compare a Sprinter with a HiAce. Change the terms and balloons until the payment estimate is in the preferred affordability range to establish how you would like your financing structured.
If a new vehicle is on your agenda for the new financial year, speak with Jade Car Loans 1300 000 003 for affordable light commercial van finance.
DISCLAIMER: IN REGARD TO MISREPRESENTATIONS AND ERRORS CONTAINED IN THE MATERIAL AS PRESENTED, LIABILITY IS NOT ACCEPTED. THE DETAILS AND CONTENT IS PROVIDED FOR CAR BUYERS AND INDIVIDUALS AND BUSINESS SEEKING FINANCE PURELY AS GENERAL INFORMATION. THIS IS NOT PROVIDED AS THE ONLY SOURCE OF FINANCIAL INFORMATION. ANYONE THAT CONSIDERS THAT NEED FINANCIAL ADVICE ABOUT THEIR SPECIFIC REQUIREMENTS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.
