Business vehicle finance

6 mins read

With many types of car finance and fleet leasing options available on the market, which one suits your business circumstances?

Whether you’re a florist looking to add a second van to your business or electrician looking for a full fleet of HiLux utes for a state-wide expansion, there’s a good chance you’ll be looking to finance it with a loan. But which finance option should you choose? A standard bank loan? A commercial hire purchase? A novated or operating lease? Or a chattel mortgage? Is there a specific tradie car lease you could take advantage of?

As you can see, there are plenty of options to explore.

Each has its own pros and cons but the right choice for you, will, of course, depend on your financial circumstances and business objectives. As new vehicles can be quite costly, many small businesses don’t have the disposable cash to purchase commercial vehicles outright. That’s why dealerships and car finance divisions like Toyota Finance* offer a range of financing options to facilitate these purchases.

To help guide you through your options, we’ve demystified the different types of car loans and leases on the market so you can make the right decision for you and get on the road.

Choosing the right vehicle

What makes a good vehicle investment? If you still haven’t made up your mind about what vehicle to purchase, the following criteria may help.

Manufacturer reputation

How does the manufacturer rate in your industry? Do you have the types of vehicles you need? Do they have the right safety features? At Toyota, we have a range of vehicles designed for businesses, that are both economical to run and fitted with intelligent Toyota Safety Sense features.

Special offers

Check if there are any available offers that you could take advantage of with a dealership. At Toyota, you can access business savings with your ABN, so take a look at the offers we have right now.

Experience with a model

Have you driven the vehicle in the past? Do you have experience with it? Does it suit your business needs? If you are considering a Toyota vehicle for your fleet, we encourage you to find your closest Toyota Dealer and book in a test drive.

Vehicle maintenance

Is it easy to maintain the vehicle? How much does servicing cost? At Toyota, we’ll keep the cost of your annual service at a capped-price for your first 3-5 years on the road, depending on your vehicle and encourage use of Toyota Genuine Parts to ensure your vehicle is always in top condition.

Some of these considerations might seem simple, but in the long run, you want to make sure that your new vehicle serves both your immediate business needs and future investments.

Speak to a dedicated Toyota Dealer about your business vehicle options.

Types of finance options

Once you know exactly what kind of vehicles you need, you’ll start to think about how to finance it. This is where the different options come into play.

Let’s take a look.

Standard business car loan

Offered by most banks and alternative lenders, as well as specialist finance divisions such as Toyota Finance*, a standard car loan can be taken out secured or unsecured. It comes in the form of a medium-term loan (usually two – five years) where the vehicle you’re purchasing becomes the security for the loan.

Operating lease

If you run a business that has a high turnover of vehicles, an operating lease may be the right solution for you. With an operating lease your chosen finance company will purchase the vehicle on your behalf and then rent it out to you. However, you will not own the car at the end of the lease. Rather, you’ll have the option to upgrade your vehicles regularly, especially if you don’t want to be stuck with depreciating vehicles that no longer suit your business needs.

With operating leases, you can also add fixed operating costs (like maintenance, registration and roadside assistance and servicing) to the monthly lease payment.

Finance lease

A finance lease is similar to an operating lease – where your chosen financier buys the vehicle on your behalf and leases it to you. However, at the end of the finance lease you will usually be able to buy the car for an agreed residual payment, unlike with an operating lease where the lender owns the vehicle.

Novated lease

A powerful employee incentive, a novated lease is an agreement between you, your employee and your chosen financier under which you help your employee lease a vehicle using salary sacrifice. This means, part of their salary is used to finance the vehicle purchase. This enables employees to make substantial tax savings on the purchase price of their car and associated running costs. It also reduces the burden on your business as you won’t be managing operating leases on vehicles.

Commercial hire purchase

This form of loan is simply an arrangement where your chosen financier buys your desired vehicle/s on your behalf. They pay the full amount of the vehicle to the dealer, then hire it out to you.

You may pay an up-front deposit at the time of purchase, followed by instalments over an agreed period. Similar to a chattel mortgage or standard car loan, you may be able to choose to pay the full loan amount with interest in equal instalments, or be left with a balloon payment to make at the end of the contract.

Chattel mortgage

A chattel mortgage is essentially a fixed loan where your chosen financier advances money to you to buy a vehicle, and you own it, outright. The mortgage is used as security for the loan. You can finance the total purchase price of the vehicle or you can make an up-front deposit or use a trade-in.

It’s good to note here that since you’ll be using your car as security for the loan, you won’t be able to sell it before the end of the contract without permission from your chosen financier.

Choosing the right finance option

With this many options at hand, it’s often hard to make a final decision. Ultimately, the finance loan you choose should reflect your business circumstances.

Car finance with Toyota Finance

Taking the next step with your finance has never been easier at Toyota Finance* thanks to our one-stop range of finance options. You can enjoy a rate that’s tailored to you with Toyota Personalised Rate^ – a personalised interest rate based on your credit score and other relevant factors as determined by Toyota Finance*.

From our Toyota Access Business Car Loan^ to Novated Leases, we can help take care of today while letting you plan for tomorrow.

Learn more about Toyota Finance


This information provided is of a general nature and for information only. Nothing in this article constitutes or should be considered to constitute legal, taxation or financial advice. Before making a decision about any of the products and services featured on this article, you should consult with your own independent legal, taxation and financial advisors, who can advise you about your personal circumstances.

* Terms, conditions, fees and charges apply. Toyota Access Guaranteed Future Value products are available to approved customers of Toyota Finance a division of Toyota Finance Australia Limited ABN 48002 435 181, AFSL and Australian Credit Licence 392536.

^Approved applicants only. Terms and conditions apply. Toyota Finance, a division of Toyota Finance Australia Limited ABN 48 002 435 181, AFSL and Australian Credit Licence 392536.

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