Chattel Mortgage
If anyone is interested out there, I had a Ghost Writer write this article on a Chattel Mortgage. I would give it a 6/10.
Chattel Mortgage
Purchasing a business vehicle presents you with a number of different options, with each having its own advantages and disadvantages. One form of business vehicle purchase that is sometimes overlooked is the chattel mortgage, which allows you to purchase your vehicle or other business equipment with a loan from the vehicle provider. There are a number of advantages to using a chattel mortgage over some other types of available financing, and for some business owners it may be the best option given their financial and vehicular needs. To find out whether a chattel mortgage is right for you and your business, the following information will show you all that you need to know.
Defining a Chattel Mortgage
A chattel mortgage is a special way of purchasing a vehicle or other piece of heavy equipment in which money is loaned to make the purchase up-front, with the purchased vehicle or equipment then being used as collateral to secure the loan. The purchaser gains ownership of the vehicle or equipment as soon as the transaction is completed, though the financier retains a lien over it so that they will have a guarantee that their loan will be repaid. Once the loan has been repaid in full, the mortgage lien will be removed and the title for the vehicle will be cleared. The “chattel” that is referred to is the vehicle or equipment itself that is being purchased.
Chattel Mortgage Benefits
There are several benefits which come from using a chattel mortgage to make your purchase instead of other financing options which may be available. Most chattel mortgages will feature flexible loan terms while still maintaining a fixed interest rate, often at a lower rate than you would be able to get on a non-business loan. You will have a fixed payment schedule as well, with your interest already figured in so that you will know exactly how much you have to pay and how much you will owe in total. Because a chattel mortgage is a form of business loan, you may also be able to claim business tax benefits for the use and depreciation of the vehicle that you purchase. You may also use a trade-in, cash deposit, or residual payment contract to reduce the total amount that will need to be paid and thus reduce your monthly payments.
Who’s Eligible for a Chattel Mortgage?
Because a chattel mortgage is a type of business loan, the first requirement for eligibility is that the vehicle that is being purchased will have to be used fully or at least predominantly for business purposes. Many chattel mortgage lenders will require that the vehicle sees at least 60% to 75% of its use in a business environment, though some lenders may allow anything over 50% business usage to qualify. This allows a chattel mortgage to be used by corporations, partnerships, and other forms of companies in order to make their vehicle purchases without having to take out a more generic business loan which may not offer the same terms.
Finding a Chattel Mortgage Lender
A number of lenders who work with business owners will offer chattel mortgages, though not all lenders will. Contact lenders in your area in order to see whether or not they will offer you a chattel mortgage for your business equipment or fleet purchases, and ask for rate quotes so that you will be able to compare their rate offerings to those of other lenders. Make sure that you collect quotes from several different lenders so that you can see which loan company has the best rates and most agreeable terms. This will help to make sure that when you make your vehicle purchase that you will have the most agreeable rates and terms that were available to you and your business.
Other Finance Options
Platinum Car Loans offers you all the right car financing options, these include Novated Lease or Novated Leasing, Commercial Hire Purchase, Chattel Mortgage, Car Lease, Finance Lease, Operating Lease and all Consumer Secured Car Loans.
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