Most Australian truck finance falls into one of three product categories — chattel mortgage, finance lease, or operating lease. The choice affects who owns the truck, how the GST flows, whether the asset sits on your balance sheet, and the depreciation and interest treatment for tax. None is universally "best"; the right pick depends on how your business uses the asset.
A chattel mortgage is the dominant product for Australian truck finance. The lender provides funds, you take ownership of the truck from day one, and the lender registers a mortgage over the asset until the contract is paid out.
GST flows your way: a GST-registered business claims the full GST on the purchase price in the BAS quarter of acquisition. Depreciation runs on your books, interest is deductible, and at end-of-term you either pay out any balloon or refinance it.
It suits operators who want to own the asset, use it as security for future borrowing, and benefit from the GST claim. Trade-ins, private sales, and dealer purchases all work under chattel mortgage. Terms typically run 36–84 months.
Under a finance lease, the lender owns the truck and leases it to your business for a fixed term. You make rental payments, claim the rentals as a tax deduction, and at end-of-term you either purchase the truck for an agreed residual, refinance the residual, or hand the asset back.
The big difference from a chattel mortgage: the lender claims the GST on the purchase, then charges GST on each rental payment, which you then claim back through BAS. Net GST outcome is similar but the cashflow pattern differs.
Finance leases suit businesses that prefer rental treatment for accounting reasons, are uncertain about long-term ownership, or want a structured exit at end-of-term with the option to upgrade.
An operating lease is genuinely a rental arrangement. The lender owns the truck, you pay for the right to use it for a defined period, and you typically hand it back at end-of-term with no residual. It is the cleanest off-balance-sheet treatment of the three.
Used most often by larger fleets that want predictable monthly costs, no end-of-term residual exposure, and the ability to refresh the fleet on a strict cycle. Less common for solo owner-operators because the per-month cost is higher and you build no equity.
Pick chattel mortgage if: you want to own the asset, you are GST-registered and want the GST claim upfront, you might want to use the truck as security for other borrowing, or you plan to keep the truck beyond the financed term.
Pick finance lease if: your accountant has a preference for rental treatment in your accounts, you want flexibility on end-of-term ownership, or you are an early-stage business managing how assets present on your balance sheet.
Pick operating lease if: you are running a fleet, you want strict refresh discipline, and end-of-term residual risk is not somewhere you want to be.
For truck finance in Melbourne and Victoria specifically, our accredited lender panel writes all three products. The right choice almost always comes down to how the business is structured for tax and how the cashflow needs to look month-to-month — which is a conversation, not a calculator.
Not sure which product fits your business? An enquiry gets you a tailored response from our accredited lender panel.
Yes. If your business is registered for GST, the full GST on the truck purchase is claimable in the BAS quarter of acquisition under a chattel mortgage. The lender does not own the asset, so GST flows directly to you.
Yes, the interest component of each repayment is deductible against business income, alongside depreciation on the asset itself.
Three common options: pay the agreed residual to take ownership; refinance the residual; or hand the truck back and walk away. You should discuss your preferred exit path with the lender at the start.
5-minute enquiry — we will refer your details to an accredited lender from our panel for review.