Overview
Car & Equipment Finance Guidance is a free, no-obligation service for Hobart and Tasmanian households and businesses buying a vehicle, machinery or other equipment. We explain the main ways to finance it, show how features such as balloon payments change the real cost, help you prepare your documents and, if you want, refer you to a licensed lender or broker.
Hobart Loans is not a lender and does not hold an Australian Credit Licence. We don't arrange finance, quote rates, recommend a specific product or decide applications, and we can't promise approval or a fast decision. We also don't give tax advice, so we'll suggest you confirm GST and tax treatment with your accountant or the ATO. If you'd like a referral to an Australian Credit Licence holder, we disclose any referral fee before making it, and you can say no.
Who it's for
- Private buyers of a new or used car who want to compare a dealer finance offer with other options.
- Tradies and sole traders buying a ute, van or trailer they'll use mainly for work.
- Businesses financing machinery, farm equipment, commercial kitchen gear, medical equipment or IT.
- Employees whose employer offers a novated lease and who want to understand how it works before signing.
What we help with
Personal versus business use
The first question is whether the vehicle or equipment is mainly for personal or business use. Finance for personal use is generally regulated consumer credit under the National Credit Code, with protections such as hardship variations. Finance used mainly for business is generally outside that Code, has different products and can have different tax consequences. Getting this right shapes everything else.
Understanding the product types
We explain chattel mortgages, hire purchase, finance leases, novated leases and secured car loans in plain English: who owns the asset during the term, what happens at the end and what you're committing to. Our guide to types of business finance in Australia has more background.
Balloon and residual payments
A balloon (or residual) is a lump sum due at the end of the term. It lowers regular repayments but increases total interest, and you need a plan to pay it, whether from savings, by selling the asset or by refinancing. We model scenarios with and without a balloon using the loan calculator.
Dealer finance and add-ons
Finance arranged at the dealership can be convenient, but it pays to compare it with other options and to read carefully any add-on insurance or warranty products bundled in. ASIC has taken action on poor-value add-on products in the past, so it's worth asking what you're paying for and whether you need it.
Insurance and what happens if things go wrong
Lenders usually require comprehensive insurance on a financed vehicle. If it's written off, the insurance payout may be less than the amount still owing. Read what happens to your loan if your car or truck is written off before you choose a term and balloon.
How it works
Tell us about the purchase
Use the contact form to share what you're buying, the approximate price, whether it's for personal or business use, and any quotes you already have. We reply within one business day.
Free guidance conversation
We discuss your budget, deposit or trade-in, how long you plan to keep the asset and whether a balloon makes sense to explore. No credit check, no cost.
Your finance summary
You receive a written summary of the finance types worth considering, illustrative repayment scenarios, questions to ask each provider and a document checklist.
Optional referral
If you'd like to proceed, we disclose any referral fee first and, with your consent, introduce you to a licensed broker or lender.
You stay in control
The licensed provider handles the application and credit decision. You can walk away at any point.
What you'll need
- Photo ID for each applicant or director
- Proof of income: payslips for individuals, or tax returns and financial statements for businesses
- ABN and GST registration details for business purchases
- Recent BAS lodgements if you're GST-registered
- Three to six months of bank statements
- Details of existing loans, leases and credit cards
- Dealer quote, tax invoice or private sale details for the vehicle or equipment
- Vehicle identification number (VIN) and registration details
- A Personal Property Securities Register (PPSR) search result for any used vehicle or equipment bought privately
- Trade-in details and any payout figure on an existing car loan
- An insurance quote for the asset
- Novated leases: your employer's salary packaging information
Options compared
| Product | Typical purpose | Typical term | Security | Things to watch |
|---|---|---|---|---|
| Secured car loan (consumer) | Car mainly for personal use | Commonly 1–7 years | The vehicle | Early payout fees; bundled add-on insurance |
| Chattel mortgage | Vehicle or equipment used mainly in a business | Commonly 1–7 years | Mortgage over the asset, which the business owns | Balloon sizing; GST and tax treatment to confirm with your accountant |
| Hire purchase | Business assets bought over time | Commonly 1–7 years | Financier owns the asset until the final payment | Ownership passes only at the end; residual payment |
| Finance lease | Business use without owning the asset during the term | Commonly 1–5 years | Financier owns the asset | Residual value is your obligation at the end; GST applies to payments |
| Novated lease | Employee car via salary packaging | Commonly 1–5 years | Financier owns the vehicle | What happens if you change jobs; fringe benefits tax; bundled running costs |
| Rental or operating lease | Equipment that dates quickly, such as IT | Commonly 1–4 years | Provider owns the equipment | No ownership at the end; total cost can exceed buying |
Advantages & watch-outs
Advantages
- Clear explanation of who owns the asset and what you owe at the end
- Side-by-side modelling of balloon and no-balloon scenarios
- A checklist for comparing dealer finance with other offers
- Free, no obligation and any referral fee disclosed before a referral
Watch-outs
- We don't provide tax advice; confirm GST and deductions with your accountant or the ATO
- We can't promise approval, a rate or how quickly a lender decides
- A large balloon can leave you owing more than the asset is worth
- Terms longer than the asset's useful life increase that risk
Worked example: a ute with and without a balloon
Example (illustrative only): a Tasmanian sole trader is financing a $45,000 ute over 5 years at an illustrative 8.5% p.a. with monthly repayments. We compare no balloon with a 30% balloon of $13,500 due at the end. Fees, GST and tax effects are excluded.
| Structure | Monthly repayment | Balloon at end | Total paid | Total interest |
|---|---|---|---|---|
| No balloon | $923.24 | $0 | $55,394.63 | $10,394.63 |
| 30% balloon | $741.90 | $13,500.00 | $58,013.74 | $13,013.74 |
The balloon frees up $181.34 a month, which can help cash flow, but adds $2,619.11 in interest and leaves a $13,500 bill in five years. Before choosing it, ask: will the ute realistically be worth more than $13,500 then, and where will that money come from? If the honest answer is "I'll refinance it", you're extending the debt, not finishing it. For more on this trade-off, see Long-Term Loans Explained.
Buying a car, ute or equipment? Get free, no-obligation finance guidance. We reply within one business day.
Request a free reviewFrequently asked questions
Should I take the dealer's finance offer?
It may or may not be competitive. We can't recommend a specific offer, but we can give you a checklist to compare it fairly with others, including the comparison rate, fees, balloon and any add-on products.
What's the difference between a chattel mortgage and a finance lease?
With a chattel mortgage, the business owns the asset from the start and the lender takes security over it. With a finance lease, the financier owns the asset and you lease it, usually with a residual payment at the end. GST and tax treatment differ, so check with your accountant.
Is a balloon payment a bad idea?
Not necessarily. It can suit some cash flow situations, but it increases total interest and you must plan for the lump sum. Avoid setting it higher than the asset's likely value at the end of the term.
Can you help with finance for a used car from a private seller?
Yes. We explain what lenders typically ask for in private sales and why a PPSR search matters: it can show whether money is still owed on the vehicle.
Does the review involve a credit check?
No. We don't access your credit file. A lender will usually make a credit enquiry if you apply.
Do you get paid by lenders?
Our guidance is free. If you choose a referral, we may receive a referral fee from the licensed provider. We disclose whether we do, and how much, before the referral.
Need broader business finance help? See Business Loan Matching, or look up terms in our glossary.
