Business Car Finance
Your success is our success
Whether you’re a sole trader or large company, Volkswagen Financial
Services can help tailor your vehicle finance to suit your needs. Drive
your business forward with the right car at a competitive price.1
Flexible business finance options2
Volkswagen Financial Services offers two tax-effective solutions for your
business: Chattel Mortgage or Finance Lease. Check out the below table
to see what’s included.
| Chattel Mortgage | Finance Lease | |
| Deposit | + | |
| Residual or balloon payment at the end of the term | + | + |
| Tax-deductible repayments | + | |
| Tax-deductible depreciation | + | |
| Tax-deductible interest | + | |
| GST is payable on the cost of the asset | + | |
| GST is payable on the repayments | + |
The difference between
financing vs leasing for
businesses
When it comes to getting a car for your business, one of the first things
you need to decide on is whether to buy or lease your chosen vehicle. Both
options have their benefits, depending on how you plan to use your vehicle.
Let’s look at the pros and cons of each.
Financing
Buying a car is a significant expense, and repayments are not usually tax deductible, which can make financing a new vehicle more expensive in the short-term.
However, buying a car has several benefits that leasing doesn’t offer – most obviously being that you ultimately end up owning a long-term asset. And while your loan repayments may not be tax deductible, interest repayments qualify as business expenses.
Additionally, petrol, mileage and maintenance expenses can be written off, and insurance and liability costs are typically cheaper on vehicles owned by your business.
Leasing
Most business owners prefer to lease their vehicles, and it’s easy to see why. Lease repayments are usually less than monthly loan repayments and are tax deductible.
This means that in the short term, leasing a vehicle is a more affordable option, and it gives business owners the freedom to upgrade their vehicle to a newer model at the end of their lease term if they choose.
It is however worth noting that while the monthly payments may be more affordable, they don’t add up to an asset for your business.
It’s well worth doing a cost-benefit analysis before you commit either way, taking note of the car’s total cost over the car loan or lease term including:
— Monthly payments, including interest
— Anticipated mileage
— Maintenance, fuel, insurance, parking and other related costs
— The value of the car at the end of the lease vs. the ownership period.
Your benefits
— No annual charges or account keeping fees.
— Option to bundle your registration, Compulsory Third Party insurance (CTP), comprehensive insurance and on-road costs with your monthly payments.
— Monthly repayments reduced by adding a balloon payment at the end of your loan or paying a deposit.
— Flexible payment options that suit your business cash flow: weekly, fortnightly or monthly by direct debit or BPAY.