Sole traders financing a ute, van, or work vehicle have four products to choose from, and the right one depends on whether the vehicle is genuinely a tool of trade, on your business structure, and on whether you want the vehicle on your balance sheet.
Chattel mortgage — the usual default
You own the vehicle from day one, the lender takes a security interest. Interest and depreciation are deductible. For sole traders buying utes, vans, and equipment, this is the right choice 80% of the time.
When a lease makes sense
“Chattel mortgage is the default for sole traders buying utes and machinery. Lease and hire purchase have specific use cases — most don't fit.
Operating leases keep the vehicle off your balance sheet and let the lender retain ownership. Useful when you want predictable monthly cost without depreciation risk, or when your accountant has structured around lease accounting. We see this most with cars used 80%+ for business.
Hire purchase and novated leases
Hire purchase is essentially a chattel mortgage with different historical accounting. Novated leases require an employer relationship and are not generally available to sole traders. Both come up in conversation but rarely fit.
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