Greenside Finance team · Published 20 October 2026
For most GST-registered businesses buying a work ute, a chattel mortgage is the usual choice: the business owns the ute from day one, the lender holds it as security, and an optional balloon can lower the repayments. A finance lease suits businesses that would rather the lender own the ute and pay a residual at the end, while hire purchase, where the lender owns the ute until the final payment, is less common now and many lenders treat it much like a chattel mortgage for business buyers.
Which one suits you depends on your GST registration, how long you'll keep the ute and your cash flow. The tax side below is general information only, not tax advice: talk to your accountant before you choose. Greenside Finance is a Perth-based finance broker comparing 40+ lenders for ute finance, and we lend Australia-wide.
| Chattel mortgage | Finance lease | Hire purchase | |
|---|---|---|---|
| Who owns the ute | Your business, from day one | The lender, for the whole lease | The lender, until the final payment |
| GST (general only) | If GST-registered, you may be able to claim the GST on the purchase price in your BAS | GST is included in each lease payment and generally claimed as you pay | For agreements since 1 July 2012, generally claimed up front, much like a chattel mortgage |
| Income tax (general only) | Depreciation and interest on the business-use share may be deductible | Lease payments on the business-use share may be deductible | Generally treated much like a purchase |
| Lower repayments | Optional balloon | Residual set at the start | Optional balloon at some lenders |
| End of term | Pay or refinance any balloon; the ute is already yours | Pay the residual to buy it, refinance the residual, or trade it in | Ownership passes to you with the last payment |
| Usually suits | Most GST-registered businesses keeping the ute 3 years or more | Businesses that change vehicles regularly or prefer the lender to own it | Rarely needed now; ask your accountant if they prefer it |
Check the tax rows with your accountant. The ATO explains the GST treatment of hire purchase, chattel mortgages and leasing.
The lender pays the dealer or private seller, your business owns the ute, and the lender registers a security interest over it until the loan is paid off. It's the most common structure for tradies and ABN holders because it's simple: you own the asset, it sits on your balance sheet, and it can include the tray, canopy, drawers and mine-spec fit-out if they're on the same invoice.
If your business is GST-registered and the ute is for business use, you may be able to claim the GST on the purchase price in your BAS for the period you buy it. Many dual-cab utes carry less than a tonne and count as "cars", so the ATO car limit caps the claim: for 2026–27 the car limit is $69,883, which caps the GST credit at $6,353. Utes designed to carry a tonne or more sit outside the limit, so check the payload on the build sheet. Interest and depreciation on the business-use share may be deductible. This is general information only: talk to your accountant.
A balloon is a lump sum left at the end of the loan. It lowers the regular repayments, but you pay or refinance it at the end. Lenders cap it by the term and by the ute's age at the end of the loan, so we quote the repayments with and without one.
With a finance lease the lender buys the ute and leases it to your business for a set term. You make regular lease payments, and a residual (an amount owing at the end) is agreed at the start. At the end you can usually pay the residual and own the ute, refinance the residual, or trade the ute in and put any equity toward the next one.
GST is included in each lease payment rather than claimed up front, and lease payments on the business-use share may be deductible. The ATO explains how GST works when a business buys or leases a vehicle. A lease can suit businesses that change vehicles every few years, or whose accountant prefers lease payments to depreciation. Talk to your accountant about which suits your tax position.
A finance lease isn't a novated lease. A novated lease is set up through an employer for an employee's car, and we don't arrange them.
Under a hire purchase agreement the lender owns the ute while you pay it off, and ownership passes to you when you make the final payment. You use the ute from day one, and some lenders allow a balloon.
Hire purchase used to be common for business vehicles. It's less common now: for agreements since 1 July 2012, the GST treatment is broadly the same as a chattel mortgage, so many lenders treat hire purchase much like a chattel mortgage for business buyers, and most tradies end up with a chattel mortgage. If your accountant prefers hire purchase for a specific reason, tell us early and we'll check which lenders offer it.
The same structures apply to heavier vehicles: see truck finance. For cars, SUVs and vans, see business car loans.
Not much. The structure is about ownership and tax; the paperwork depends on which documentation option you fit. Low doc means the lender relies on your ID, the application and your own declaration of income, and sometimes an assets and liabilities statement, so you don't need full business financials or tax returns. Lite doc (easy doc or mid doc) uses BAS or business bank statements, and full doc uses tax returns or financials. More on low doc and lite doc loans.
Rates depend on the lender and your profile; low doc is often priced the same as full doc for established businesses. We'll explain any fees before you go ahead.
Illustrative scenario based on common enquiries, not a specific client.
A Perth landscaping company, GST-registered for 3 years, wanted a new dual-cab with a tray and toolboxes for around $70,000 and planned to keep it for at least 5 years. Its accountant compared a chattel mortgage with a finance lease. Because the company wanted to own the ute and keep it long-term, it chose a chattel mortgage, with the tray and toolboxes on the same invoice. The accountant checked the payload on the build sheet to confirm how the car limit applied to the GST claim, and a modest balloon kept the repayments in line with the business's cash flow.
For most GST-registered businesses keeping the ute for several years, a chattel mortgage is the usual choice because the business owns the ute from day one. A lease can suit businesses that change vehicles often or prefer the lender to own it. Your accountant can confirm which suits your tax position.
With hire purchase the lender owns the ute until you make the final payment, then ownership passes to you. It's less common now, and many lenders treat it much like a chattel mortgage for business buyers. Most tradies end up with a chattel mortgage.
If your business is GST-registered and the ute is for business use, you may be able to claim the GST on the purchase price in your BAS. Some dual-cab utes count as cars, so the ATO car limit caps the claim. This is general information only: check with your accountant.
You can usually pay the residual and own the ute, refinance the residual, or trade the ute in and put any equity toward the next one. The residual is agreed at the start, so you know the amount from day one.
Usually, yes. A balloon lowers the regular repayments but leaves a lump sum to pay or refinance at the end. Lenders cap it by the term and the ute's age at the end of the loan, so we quote repayments with and without one.
Yes. A chattel mortgage is still the usual structure, but you can't claim the GST credit. Lender choice can be narrower, so a deposit or property often matters more than the structure. Check the tax side with your accountant.
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Greenside Finance Pty Ltd (ABN 76 678 053 122) is an Authorised Credit Representative (#561052) of Fintelligence Pty Ltd, Australian Credit Licence #511803. Information is general and doesn't consider your objectives, financial situation or needs. All finance is subject to lender approval, terms, conditions and fees.
