Why get an ABN car loan through Money
Save time
By comparing multiple ABN loan providers at once
Get personalised rates
Ones you’re actually eligible for
No credit score impact
Even when comparing lots of options
Get expert support
From application through to settlement
How do ABN car loans work?
An ABN car loan is secured vehicle finance designed for ABN holders. The finance is generally flexible to cater to different business types, with a low-doc application option for businesses with irregular income and cash flow.
The finance behind an ABN car loan is similar to a standard car loan or chattel mortgage. The difference is lenders and brokers who specialise in ABN car finance can help ABN holders with non-standard applications when some traditional banks won’t.
Here’s what’s you can get with an ABN car loan:
- Borrow up to $500,000
- Loan terms from 1-7 years
- Finance a new or used vehicle
- Option to include a balloon payment
- Available for dealer or private sale purchases
- Flexible repayment options to match business cash flow
- No deposit required but can be an option to reduce your finance costs
- Early loan repayment possible (fees may apply depending on the lender)
Our data shows buying a vehicle is the most common reason businesses look for finance – 38% of all loan requests.
Am I eligible for ABN car finance?
Eligibility for an ABN car loan will come down to the individual lender. But for most lenders we work with, these are the main business loan requirements:
- You must be an Australian citizen or permanent resident
- You must be an ABN holder
- Your business must be GST-registered
- Generally you must be trading for at least 6-12 months
- You must be able to demonstrate business revenue is sufficient to service the loan repayments
- You'll need to be using the vehicle for at least 50% business use
What are the interest rates on ABN car loans?
How long your business has been operating
The longer the better in lenders’ eyes. If your business is relatively new but you have extensive experience in your industry, this can work in your favour. The average ABN car loan borrower has been trading for around 27 months, Money data shows.
The type and age of vehicle
Lenders prefer newer vehicles for a secured ABN car loan. A vehicle with a higher potential resale value is less risky for them. For this reason, specialised vehicles with limited resale demand often have higher rates.
Your revenue
If your business has a track record of generating strong and stable revenue, you will likely qualify for a lower interest rate.
Your assets and liabilities
Lenders will factor in what assets you own (e.g. business equipment or personal vehicles, plus your overall debt level.
Whether you’re a homeowner
Lenders see owning your own home (being an ‘asset-backed borrower’) as a sign of stability and reflect this with lower rates.
Is it a dealer or private sale
This isn’t always a major factor but some lenders do prefer dealer sales as the purchase is usually backed by a statutory warranty.
Consider loan structure and cost with ABN car finance
Phil Collard, Money's Asset Finance Expert
“It happens all too often that borrowers are caught up with the cheapest rate, only to find the fee structure is quite high and the cost to exit early is exorbitant. If it’s likely you will be paying off your loan early – find a lender with little to no early payout fees. Although cost is important when considering an ABN car loan, ensuring the chosen lender offers you the right product and structure is also vitally important if not more. "
Phil Collard, Money's Asset Finance Expert
How to apply for an ABN car loan
1
Compare loan options
Do this before you apply with any one lender. Getting quotes from multiple lenders through a finance broker will allow you to compare your options without impacting your credit report. Consider the loan interest rate, fees, features and the lenders’ eligibility criteria.
2
Gather your application information
Your application will likely be much smoother if you have the required documents ready. The main ones are personal ID (driver licence) and proof of business revenue (usually a business activity statement or contracts for confirmed upcoming work).
3
Submit your loan application
You can usually do this online through your chosen lender’s application portal. If you apply through a broker, they will submit the application on your behalf to save you time.
4
Get conditional approval (optional)
Some lenders offer conditional approval to borrowers up to a limit. This then gives ABN borrowers a confirmed budget for their vehicle purchase.
5
Provide vehicle details
Once you’ve found a vehicle to buy and agreed the sale, you’ll need to give the lender information about the vehicle (via its registration) plus a tax invoice confirming the purchase price.
6
Your loan is funded
If the vehicle meets the lender's criteria, your loan will be funded (settled). This usually involves the lender making a direct transfer of funds to the seller.
ABN car loan tax benefits
Certain costs of ABN car finance and vehicle running costs may be tax deductible, amplifying the potential return on investment for businesses.
Deductible loan interest and fees
The interest and most fees charged on your ABN may be tax deductible. Any deductions would be based on business use of the vehicle only.
Claim a GST credit
GST-registered businesses can claim a GST credit on the purchase price of a vehicle used for business use. The 2024–25 financial year, the maximum GST credit you can claim is $6,334.
Ongoing runnings costs
Ongoing expenses including fuel, repairs and servicing, insurance premiums, registration and depreciation may also be tax deductible.
Source: ATO
How much can I borrow with an ABN car loan?
The maximum amount you can borrow with an ABN car loan will be determined by similar factors to those that impact your interest rate. In other words, borrowers seen to be less risky will be able to borrow higher amounts..
However, when assessing the loan amount, lenders place more emphasis on your business’s income, as this signals how much you can afford to repay. This is sometimes referred to as serviceability.
Money borrower data shows the average business car loan request is for around $77,000. The average monthly revenue among ABN borrowers is just over $20,500.
Can I repay my ABN car loan early?
This is a question we’re commonly asked by ABN borrowers and the answer is, yes, you usually can on most kinds of business loans.
But you need to watch out for early payout fees. In some cases, the money you save on interest and regular loan fees by repaying the loan early could be cancelled out by a large penalty fee.
If you are able to secure an ABN car loan with no penalty for early repayment, the savings for your business by shaving time off the term can be significant.
Impact of paying your ABN car loan off early
Loan amount | |
Full loan term | $75,000 |
Paid off sooner | $75,000 |
Loan term | |
Full loan term | 5 years |
Paid off sooner | 4 years |
Monthly repayment | |
Full loan term | $1,644 |
Paid off sooner | $1,952 |
Total to repay | |
Full loan term | $98,612 |
Paid off sooner | $93,705 |
Saving | |
Full loan term | $0 |
Paid off sooner | $4,907 |
| Full loan term | Paid off sooner | |
|---|---|---|
Loan amount | $75,000 | $75,000 |
Loan term | 5 years | 4 years |
Monthly repayment | $1,644 | $1,952 |
Total to repay | $98,612 | $93,705 |
Saving | $0 | $4,907 |
Should I get an ABN car loan with a balloon payment?
Most lenders offer a balloon payment option on ABN car loans. Our Asset Finance Expert, Phil Collard, says there can be advantages for businesses to choosing a balloon payment, despite the sometimes negative perception of doing this.
“What borrowers neglect to consider is what their repayments be with and without a balloon,” Phil explains.
“For example, you could be looking at repayments of $800 per month with a balloon vs $1,000 per month with no balloon. The difference of $200 per month in this example could be meaningful to a business’ monthly cashflow. With a balloon, they may be able to comfortably afford the new vehicle without putting strain on cashflow.
“Come the end of the term, you may be able to sell the asset and use the proceeds to pay off the balloon or potentially refinance and keep it. Be sure to consider what the exit strategy may look like when considering balloon options for your next asset purchase. “
What vehicles are ABN holders financing in 2024?
Demand for business vehicles in Australia is looking healthy. There was a 13.7% increase in the number of new vehicles purchased by businesses in July 2024 compared to the same month in the previous year, according to the Federal Chamber of Automotive Industries (FCAI).
The Ford Ranger and Toyota Hi-Lux are the consistent top sellers.
Money’s Asset Finance Expert, Phil, says businesses are increasingly choosing vehicles that will allow them to maximise every last cent of value.
“We’ve noticed an increased appetite for used assets vs new,” he says.
“Business owners should be open to considering a well-maintained two or three-year old truck, for example, as the initial depreciation has been borne by the first owner. This can represent great value particularly with assets that have a long expected useful life.
“On the other hand, the demand for ‘luxury or nice to have’ assets has been muted of late which may be a reflection of a softer economic climate. For example, company directors may be electing to retain their current company car as opposed to upgrading for the time being.”
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