Dealer or private seller: how the finance changes

Does it matter who you buy the vehicle from?

To a lender, yes — and to your BAS, definitely. The same ute at the same price can cost your business noticeably different amounts depending on whether it comes from a dealership or someone’s driveway. The structures available, the documents needed and the settlement process all shift.

Buying from a dealer: what’s different?

A licensed dealer selling in the course of business charges GST. If your business is registered for GST and the vehicle is for business use, the ATO says you can generally claim that GST as a credit — in full for a vehicle used solely for the business, or in proportion to business use. For passenger cars, the credit is capped at one-eleventh of the car limit.

Dealers also:

• provide a tax invoice the lender can settle against;
• often arrange registration and transfer for you;
• can offer every structure — chattel mortgage, hire purchase or lease;
• may have demonstrator stock that sits between new and used (see new, used or demo).

You don’t have to use the dealer’s own finance. Arranging your own business finance gives you a structure chosen for your business rather than for the dealer’s convenience.

Buying privately: what’s different?

A private seller who isn’t registered for GST doesn’t charge it. The ATO is clear that if you buy second-hand from an unregistered seller, you can’t claim a GST credit (unless you’re buying to resell, which isn’t the situation here). So a private price with no GST attached should be compared with a dealer price after you’ve accounted for the GST credit you’d get from the dealer.

Lenders that finance private sales usually want:

• the seller’s name, contact details and proof of ownership;
• the vehicle’s VIN, registration and odometer reading;
• a clean PPSR search, or a payout letter if money is owing;
• sometimes photos, an inspection or an independent valuation.

Why the PPSR search matters

The Personal Property Securities Register lets anyone search a used vehicle by its VIN. It shows whether a financier has a registered security interest — meaning money may be owing — and whether the vehicle has been reported stolen or written off. If you buy a vehicle with finance still on it, the seller’s lender could have a claim on it.

Run the search close to the day you pay, not a week before. Your lender will usually run its own too.

How does settlement work on a private sale?

On settlement day, the lender pays the money directly — not to you:

1. If the seller has finance owing, the lender pays their financier the payout amount.
2. The remainder goes to the seller.
3. You transfer registration through your state authority and pay any stamp duty.
4. You collect the vehicle with no old security attached.

Side-by-side comparison

	Dealer	Private seller
GST in the price	Yes, usually claimable	Usually none
Paperwork	Dealer provides tax invoice	You and the lender gather details
PPSR risk	Dealer clears it	You must check
Structures available	All	Mostly chattel mortgage
Mechanical protection	Dealer obligations apply	Buyer beware — get an inspection
Price	Often higher	Often lower

Illustrative example: same ute, two prices

Illustrative only. A carpenter is choosing between a three-year-old ute at a dealership and a similar one listed privately for less. Once his accountant factors in the GST credit he could claim on the dealer ute, the gap narrows considerably. He also weighs the dealer’s paperwork and mechanical obligations against the extra checks a private sale needs. Either can be financed — he just needed to compare like with like.

Buying privately soon?

Our guide to checks before buying a used ute privately is a practical checklist for the inspection and paperwork.

Don’t forget the on-road costs

Whichever way you buy, budget for the costs that come after the handshake. With a dealer, many of these are rolled into a drive-away price; with a private sale, you handle them yourself:

• Stamp duty on the transfer, set by your state revenue office.
• Registration transfer fees and, in some states, a roadworthy or safety certificate.
• Insurance from the day you take possession — lenders require it.
• A service and any repairs flagged in your inspection.
• Fit-out — tray, canopy, racks, signage.

Our stamp duty and registration page links to every state and territory authority.

Red flags in a private sale

Walk away, or at least slow down, if you see any of these:

• the seller isn’t the registered owner, or can’t show proof of ownership;
• the VIN on the vehicle doesn’t match the registration papers;
• the PPSR search shows a security interest the seller won’t explain or pay out;
• the vehicle is listed as written off or stolen;
• there’s pressure to pay a cash deposit before you’ve checked anything;
• the odometer reading doesn’t fit the service history.

A genuine seller will be comfortable with your checks, and with the lender paying them directly at settlement.

When a dealer is worth the premium

If you need a vehicle quickly, want warranty protection, are buying a newer model or want a lease rather than a loan, a dealer is often the better path even if the sticker price is higher. Dealers also handle trade-ins, which can make up a deposit and simplify the changeover. If you’re buying a newer vehicle, compare a new, used or demo option at the same dealership before deciding.

Found the vehicle? Let’s check what’s possible

Whether it’s on a dealer’s lot or in a stranger’s driveway, tell us about the vehicle and your business and we’ll explain what finance fits. It takes about 60 seconds.

Your credit file isn’t checked when you first enquire. We don’t fire your details at a dozen lenders; one specialist handles your enquiry and calls you. Let us know accurately who’s selling, the price and the vehicle details, and we’ll tell you exactly what the lender will need. Begin your enquiry.