Business Car Loan Calculator

A chattel mortgage — what most lenders call a "business car loan" — is the standard way for a GST-registered business or sole trader to finance a vehicle it will own and use for work. The lender advances the purchase price, you take title to the car immediately, and the car itself secures the loan. Because you own it, the GST credit and depreciation deductions below are available to you, not the lender.

A standard (personal) car loan uses the same repayment mathematics but carries none of the business tax treatment below — it's the right comparison if the vehicle is mostly for private use. A novated lease is a different structure again: the finance company owns the car, your employer makes the payments from your pre-tax salary, and FBT (not GST credits or depreciation) governs the tax treatment — see our novated lease guide for how the two compare.

If the business is buying equipment other than a vehicle, the same GST-and-depreciation logic applies without the car limit — see our equipment finance guide.

If you're GST-registered, you can generally claim a GST credit equal to 1/11th of the vehicle's GST-inclusive price, apportioned to your business-use percentage. The ATO caps this at 1/11th of the car limit — $6,353 for 2026-27 — once the vehicle's price exceeds the limit, so an expensive car doesn't unlock a proportionally larger credit.

You claim the credit on your Business Activity Statement (BAS), separately from the loan itself — the finance repayments are principal and interest, not a GST-bearing supply. Whether you claim on a cash or accruals basis changes when you can claim (the BAS period you pay, vs the period you're invoiced) but not the total amount.

The car limit caps the amount you can depreciate for a passenger vehicle first used in 2026-27 at $69,883, no matter what you paid — this is separate from, and on top of, the instant asset write-off threshold. Below $20,000 the full (business-use, car-limit-capped) cost is deductible immediately; most vehicles cost more than this, so they instead go into the small business simplified depreciation pool: 15% in the first year, then 30% of the declining balance in later years.

For 2026-27, the $20,000 threshold is in a bill that has passed both Houses of Parliament but is still awaiting royal assent — see the calculator's tax benefit panel and our instant asset write-off calculator for the full mechanics and current bill status. If the vehicle is a ute, van, or other commercial vehicle rather than a passenger car, the car limit generally doesn't apply — check the depreciation calculator for the general Division 40 rules.