5 Smart Ways to Finance a Truck in Australia

The Real Cost of Getting It Wrong

Choosing the wrong finance structure for your next truck isn’t just about the rate it’s about your borrowing capacity, cashflow, flexibility and fleet growth over time.

From chattel mortgages to full service leases, each structure has different tax treatments, balance sheet impacts, and long-term pros and cons. Here’s what you need to know before signing anything.

Chattel Mortgage:

JLM Brokerage Tips On How it works:

You own the truck from day one; the lender takes a mortgage over it.

Pros:

• GST credit on purchase price (if registered)

• You own the asset, so you control resale and PBS mods

• Option to use a balloon payment (at the end of term to own the truck outright) to reduce monthly repayments

Cons:

• It’s debt on your balance sheet so it reduces borrowing capacity

• Depreciation deductions decline over time

• Flexibility to choose a term and repayment schedule that suits your initial cashflow

Best for:

Owner drivers and fleets wanting equity in their equipment and flexibility of ownership

Ages best when: You set a balloon that matches real resale values, keeping repayments lower as the business scales.

Commercial Hire Purchase (CHP):

JLM Brokerage Tips On How it works:

You hire the truck from the financier and take ownership after the final payment.

Pros:

• Ownership pathway with flexible term and balloon options

• Common, well-understood structure

• Helps business to preserve working capital by allowing business to have use of an income producing asset without the full cost up front

Cons:

• Treated as on-balance-sheet debt, reducing capacity

• Complex GST timing if you report on a cash basis

Best for:

Operators wanting ownership certainty with clear tax deductibility.

Finance Lease:

JLM Brokerage Tips On How it works:

You lease the truck for a fixed term and have the option to buy it at the end for a residual value (must comply with ATO rules).

Pros:

• Lease payments are tax-deductible

• Predictable monthly costs

• At the end of the term you have to choice to purchase the truck or return to the truck to the financier

• Finance lease less than 12 months are off balance sheet

Cons:

• Under AASB 16, leases now show as liabilities on most balance sheets

• Residual must match ATO guidance

• You are responsible for the truck’s running costs

Best for:

Fleets that want predictable cashflow and newer trucks every 4–5 years.

Operating Lease / Full-Service Lease:

JLM Brokerage Tips On How it works:

You pay a single monthly fee for the use and maintenance of the truck — then return or upgrade it at term end.

Pros:

• No maintenance headaches

• Keeps the fleet modern and reliable

• Tax-deductible rentals

Cons:

• No ownership or equity

• Payments stay flat, not falling as trucks age

• Financiers will stipulate suitable condition in which the truck is to be returned

Best for:

Companies chasing uptime, not asset ownership logistics contractors, fleet operators, and high-turnover sectors.

Equipment Rental / Rent-to-Own:

JLM Brokerage Tips On How it works:

Short-term rental for cashflow flexibility, often with a buyout clause.

Pros:

• Fast approval, great for new contracts or seasonal work

• Flexibility of ownership or return of goods at end of term

• Suitable to fulfill short term contract

• Low upfront cost

Cons:

• Highest monthly expense

• No equity until buyout

Best for:

Short-term contracts, testing new lanes, or startup operators building trading history.

ATO Tax & Regulatory Guidelines - Please Independently Check Suitability With Your Accountant:

• GST & Deductions: GST credits apply up-front on purchases under chattel mortgage or CHP; leases and rentals claim GST progressively.

• Depreciation: The instant asset write-off remains at $20,000 for FY2024–25 and FY2025–26 for eligible small businesses.

• Compliance: Ownership doesn’t change your Chain of Responsibility (COR) duties under the Heavy Vehicle National Law or NHVR.

• Performance-Based Standards (PBS): PBS vehicles improve payload and route access — often supporting higher residuals and smarter finance planning.

Fleet Growth Tip:

“Choose a balloon that matches your resale reality, not your wish list, this is your strongest fleet-finance lever.”

Truck Torque Finance Insight 2025

Strategic borrowing is about balance:

Own where you build equity; lease where you build efficiency. Keep assets fresh, payments manageable, and cashflow strong, that’s the formula that grows a trucking business sustainably.

Need help structuring your next truck finance the smart way?

Contact Truck Torque or JLM Brokerage and we will break it down and work with you to find the right finance product to help you design a business growth model that’s built to last.

We are excited to be on the journey with you, providing end to end buying finance and insurance solutions and support all the way.

Welcome to Truck Torque, where actions speak louder than words.

Drop us an email to connect:

Rohan@trucktorque.com.au

+61 0424 098 817

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