Chattel Mortgage or Lease? Finance Your Next Curtainsider, Tipper or Reefer

GST-registered businesses can generally claim the full GST in a trailer's purchase price as a credit upfront: for a chattel mortgage in the BAS for the period of purchase, and for a hire purchase agreement entered into from 1 July 2012 in the period of the first payment or tax invoice, according to the ATO. On a $110,000 GST-inclusive trailer, that is $10,000 of GST. Under a lease, GST is included in each payment and claimed as you pay. General information only; confirm with your accountant.

The car cost limit does not apply to commercial trailers, because a trailer is not a car for tax purposes (a car is a motor vehicle designed to carry a load under 1 tonne and fewer than 9 passengers). The limit, $69,883 for 2026-27 according to the ATO, applies to passenger vehicles, so the full cost of the trailer (GST-exclusive if you claim the GST credit) can be depreciated. General information only; confirm with your accountant.

Trailers are deducted as they decline in value over their effective life, which the Commissioner sets in the Income Tax Assessment (Effective Life of Depreciating Assets) Determination 2025, or which you can self-assess. Eligible small businesses with aggregated turnover under $10 million can instead use the simplified depreciation pool, deducting 15% in the first year and 30% of the pool balance each year after, according to the ATO. Under a lease, the lender claims depreciation instead. Confirm with your accountant.

Eligible small businesses with aggregated turnover under $10 million can immediately deduct assets costing less than the instant asset write-off threshold, which is $20,000 and permanent from 1 July 2026, according to the ATO. Smaller box, plant and tradesman trailers may fall under it, while most heavy trailers cost more and go into the simplified depreciation pool instead. General information only; confirm with your accountant.

For a GST-registered owner-driver with an established trading history, a chattel mortgage is usually the most suitable option: you own the trailer, can claim the GST upfront, and the interest and depreciation are generally deductible for business use. As a sole trader you sign the finance personally, so lenders assess your personal credit file and your individual tax returns alongside the business BAS. Owner-drivers who are not registered for GST can still use a chattel mortgage or hire purchase. General information only; confirm with your accountant.

Trailer finance repayments depend on the amount, term, rate and balloon. As an illustration, on a $110,000 tri-axle curtainsider at 8.5% p.a. over 5 years, a chattel mortgage with no balloon is about $2,260 a month, and a 30% ($33,000) balloon brings it to about $1,815 a month, with the balloon owing at the end. Compare the total cost, including fees, not just the monthly figure. Indicative only, not a quote or offer.

Lenders set trailer finance rates from their own cost of funds, which moves with the RBA cash rate, plus a margin, then adjust for your credit file, time trading, deposit, loan amount, the trailer's age and type, and the structure. A late-model curtainsider from a dealer usually prices sharper than an older tipper bought privately. Published chattel mortgage rates in Australia start from around 7.5% p.a. and can reach 20% p.a. or higher for some borrowers, depending on the credit profile and the asset (money.com.au, October 2026). Business finance often has no comparison rate, so compare the total cost in dollars, including fees. Indicative only, not a quote, offer or rate guarantee.

A balloon on trailer finance is a lump sum due at the end of the loan term, a percentage of the price set by the lender based on the term and the trailer's age, that lowers your monthly repayments, as in the repayment example above. Trailers often stay in service well beyond a 5 year term, so many operators refinance the balloon or pay it out and keep running the trailer. Indicative only, subject to lender assessment.

No-deposit trailer finance may be available for prime applications, subject to lender assessment. Lenders may ask for a deposit if your credit file is impaired, your ABN is newer or the trailer is older or bought privately. A deposit can also widen the lender pool and improve the rate offered.

Trailer finance pre‑approval is typically issued within 24 hours* once your BAS or bank statements and the trailer details, such as the dealer quote or the make, year and VIN, are provided, subject to lender assessment. Settlement timing then depends on the lender, the seller and your documents.

Whether to finance or hire a trailer depends mainly on how steady the work behind it is. Hire suits short contracts, seasonal peaks or specialist trailers you need only now and then, because you pay only while you use it and the hire company usually handles major servicing. Finance suits trailers that are loaded most weeks of the year: repayments are usually fixed, a chattel mortgage or hire purchase builds equity in a trailer you can later sell or trade in, and a GST-registered business can generally claim the GST upfront under a chattel mortgage. To decide, compare a year of hire costs with a year of repayments plus running costs. General information only; confirm with your accountant.

Trailer refinance lets established operators borrow against trailers they already own outright. The lender advances an agreed amount based on the trailer's valuation and you repay it over an agreed term. It is often used to fund a deposit on a new prime mover or to take on a new freight contract. Subject to valuation and lender assessment.