Car Photo2There are two types of car finance available and both have their distinctive features. The first is consumer finance. This is finance for a person to purchase a car for personal use. The second type of car finance is for business, that is, finance for a car that will be used primarily for business purposes.

This article will be addressing car finance for business purposes and explaining how to get car finance to meet your needs.

To make car finance work for you here are three things you should focus on before you go out and buy that new vehicle for business.

1.       Make sure you get a quote for finance before going to a car dealership.

This is very important because the dealer is only interested in quoting you a monthly payment figure and not the interest rate because by law if you are buying a car for business they do not have to quote you the actual interest rate for the finance.

A common scenario goes like this;

YOU: I would like to finance this car for $35,000.

DEALER: Great! How does $750 per month over 5 years suit your budget?

YOU: That sounds fine.

Note there was no interest rate quoted and you have signed up for a finance deal at a 10% interest rate.  This is because the dealer can quote in monthly repayments and so you have no obvious point of comparison.

If you have got a quote prior to going to the dealership it would have been at 6% and the monthly payment would have been $660 per month, which is a substantial difference.

2.       Try not to have a balloon payment in your finance contract.

A balloon payment means that you pay a lesser amount of monthly payments during the life of the car loan and then make a large final payment at the end of the loan term. The problem with this is that when you take out a car loan for 5 years you tend to forget that at the end of it you have to make a large one off payment.

This results in a situation whereby you usually then need to finance the balloon payment. So now you have a car that you thought you had just paid off after 5 years still having finance owing on it for another 3 years.

3.       Use a finance product that does not require you to provide financial statements.

Most lenders in the car finance market have a product which lets you purchase a vehicle for business without providing financial statements. To access this type of product you usually need the following:

·         At least 2 years ABN registration.

·         Be a home owner (with a mortgage is fine).

If you meet the above criteria it is a fast, simple way to access car finance.

If you are interested in car finance for a business vehicle please call me on 0409 119 322 or email me at


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