What’s a chattel mortgage?
Tax effective car ownership, for businesses & sole traders.
A chattel mortgage is an extremely tax-effective car finance product that allows the ownership of the vehicle to sit with a business, a Trust or an individual with more than 50% business use. The finance company holds a mortgage on the car (the ‘chattel’) as security, and at the end of the term (anywhere from one to five years) you have the option to make a predetermined ‘balloon’ payment, and own the car outright.
Depending on the level of business use, the tax benefits are as follows:
If you have more than 50% business use, or you put the vehicle in the name of a company or Trust, it can be financed with a chattel mortgage. If you’re a sole trader, business owner or company director, it could be just what you’re looking for.
As you can tailor the size of the payments with a chattel mortgage, you can fine tune the finance to suit your cash flow. Once you know how much you’re prepared to pay every month, you need to make some decisions on the following: