You may be able to get a lower rate with a business car loan
- Business car loan interest rates are typically lower
- To be eligible, you must use your car solely or partly for work
- Some exclusions apply, find out more on our business car loans page
When it comes to car loans, there is no shortage of options from which to choose.
There are secured and unsecured car loans, bad credit car loans, chattel mortgages, commercial hire purchases, novated leases, and finance leases. Then there are other finance options such as credit cards and personal loans, which Australians also use, to finance vehicles.
Presented with such an overwhelming amount of choice, it can be tempting to simply go with dealer finance or whichever option your bank recommends. That's easiest right? Well, not necessarily. Also, depended on your car dealership or bank, it could end up costing you more in the long term.
For example, by selecting a business car loan instead of a personal car loan, you may be able to get a lower interest rate. Read on to find out more.
You may be able to get a lower rate with a business car loan
Do you use your car for work purposes? Do you use your vehicle to drive out and meet with clients, or to travel to worksites with your tools in the back? If so, you may be eligible for a business car loan.
Business car loans are designed to provide finance for people who use their vehicles fully or partially for work, and they typically feature lower interest rates than comparable personal car loans.
| Loan Type | Personal | Business | Loan Term | *Interest Rate | *Comparison Rate |
|---|---|---|---|---|---|
|
Secured Car Loans |
Yes |
No |
2-7 Years |
from 4.60% |
6.55% |
|
Chattel Mortgage |
No |
Yes |
2-7 Years |
from 4.10% |
6.06% |
|
Commercial Hire Purchase |
No |
Yes |
2-7 Years |
from 4.10% |
6.06% |
As you can see in this example, the interest rates for business car loans (chattel mortgage and commercial hire purchase) are a full half a percent lower than that of the personal secured car loan.
*These rates have been collected using publicly available information and are verified correct as of September, 2016. They are used for illustrative purposes only, and may not reflect the lowest or highest rate available to you. For information specific to your situation, speak with a finance professional.
Are you eligible for a business car loan?
Business car loan interest rates are typically lower than that of secured car loans. However, business car loans are not available for every driver. To be eligible, you must fulfil the following requirements.
You must use your car for work: Simply put, to be eligible for a business car loan, you must use your vehicle solely or partly for commercial purposes. If you do not, then you will not be eligible.
You must speak with your employer: If the vehicle is not for your own business, then you should speak with your employer, depending on the type of loan you choose, they may need to provide documentation.
You must meet standard lending criteria: To be eligible for any kind of loan, you must meet the lending criteria of your chosen lender. If you do not, they will not offer you a loan.
If you match these requirements, then you may be eligible for a business car loan, such as a chattel mortgage, commercial hire-purchase, novated lease, or finance lease.
How to apply for a business car loan
Not all business car loans are the same. Exact details regarding applications will differ from loan type to loan type. Broadly speaking, though, these are the three steps you will need to take.
1. Contact a car finance broker
A finance broker will be able to help you choose between different lenders and business car loan options. They will also be able to provide guidance on the documentation required.
2. Arrange documentation
As with any loan, there will be documentation for you to review. However, with selected business car loans, your employer may also need to provide information regarding your employment.
3. Approval
How long approval will take will depend on a number of factors, including your credit history and current financial position. Once approved, you can drive away in your new car.
Note: Standard approval processes apply. If your business car loan is declined for any reason, then you may have to choose another loan option, such as a bad credit car loan, in order to secure vehicle finance.
"You may be able to get a lower rate with a business car loan."
Ready to apply for a business car loan?
At Rapid Finance, we've been helping Australians to secure business finance for over 17 years, and we could help you too. We can compare a range of options to seek out finance that matches your circumstances.
So, don't settle for just any finance. Speak with a Rapid Finance loan specialist about getting a car loan solution that is tailored to your needs, budget, and situation.
Check out our car loan options