What Is My Best Truck Finance Option?

The most common options for truck financing are finance leases, commercial hire purchases, chattel mortgages, novated leases, and business loans. Each of these has its own advantages and disadvantages, so it’s important to do your research before making a decision.

To help you out, we’ve put together a brief guide to the different truck financing options available. Keep reading to learn more and find the best option for your needs!

Finance Lease

A finance lease is an agreement where the finance lender retains ownership of the vehicle while you enjoy the benefits of owning a commercial vehicle.

In other words, the lender buys the vehicle on your behalf and then leases it back to you. You make monthly payments until the term is finished, where you can either pay the remainder of the lease and take full ownership of the car, trade the car in, or explore other truck finance options.

Commercial Hire Purchase

With this type of business vehicle finance, you agree to a set period where you will hire a truck from the lender.

You make monthly repayments during this time, and at the end of the term, you may take ownership of the vehicle if you have paid off the loan completely.

Chattel Mortgage

A chattel mortgage is when a lender loans you the money to buy a car. You become the owner of the car immediately, but the lender takes out a mortgage on it as security for the loan.

The mortgage is removed once the contract is complete.

Novated Lease

This truck finance option is essential for small businesses with employees. It allows employees to use their pre-tax income to lease a vehicle.

The employer is responsible for arranging for the lease payments to be taken directly from the employee’s salary, meaning they can reduce their taxable income.

Business Loan

A standard business loan can fund the purchase of a truck. You have several options available with typical small business finance, such as a line of credit or a plant & equipment loan.

A Final Word

Navigating the various truck loan options to choose your best fit can be complex and time-consuming. A specialist truck finance broker will save you a lot of time here by making recommendations based on your individual circumstances.

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