A Car Loan or “Consumer Car Loan” is a personal finance product generally applied for when an owner would use the car for less than 50% business use. A financier will lend money for the purchase of a vehicle and take security over that vehicle until the finance has been paid out or the finance contract expires. The car can be new, demo or used and can be purchased through a dealership, car yard or private seller. Consumer Car loans are a great way to buy a vehicle without using your own cash up front.
Consumer Car Loans can have contract terms ranging from 12 months up to 84 months (1 to 7 years) and if applicable may be eligible to have a balloon payment at the end of the contract term – available on contracts up to 60 months (5 years) terms.
If you do use your vehicle for some business use but not as much as 50% you still may be eligible to claim some deductions. If you are considering a Consumer Car Loan another possible option for you to consider is a Novated Lease which is a method of salary packaging your personal use car.