Vehicle finance for tradies

Why tradies think about vehicle finance differently

For most tradies, the vehicle isn’t transport — it’s the workshop, the storeroom and the business card all in one. If it’s off the road, you’re not earning. That changes what matters in the finance: approval as fast as possible, a structure that keeps cash free for materials and wages, and a vehicle that won’t let you down on a Monday morning.

Which vehicles do tradies finance?

Trade	Common vehicles
Electricians	Vans with racking, utes with canopies
Plumbers and gasfitters	Vans, utes with pipe racks, service bodies
Carpenters and builders	Dual-cab utes, tray-backs, tippers
Landscapers	Single-cab trays, tippers, trailers
Painters	Vans, utes with ladder racks
Tilers and plasterers	Vans, utes with trailers
Air-conditioning technicians	Vans, utes with service bodies

See ute finance, van finance and trailer finance for the vehicle-specific detail.

The usual structure: chattel mortgage

Most tradies finance through a chattel mortgage. Your business owns the vehicle from day one, the lender holds security over it, and if you’re registered for GST and buy from a dealer, you can usually claim the GST in the price as a credit for business use. Many utes and vans designed mainly to carry goods sit outside the car limit, so the GST credit and depreciation may not be capped — check your model with your accountant.

Fit-outs: getting them into the finance

A bare ute isn’t ready to work. Canopies, trays, drawers, racks and toolboxes can add a lot to the cost. They’re easiest to finance when they’re:

• supplied by the dealer and on the same invoice as the vehicle; or
• supplied by a fit-out company before settlement, with the lender’s agreement.

Fit-outs added months later usually need separate funding. Plan the fit-out before you buy so it can go into one deal.

Going out on your own

Many tradies buy their first business vehicle the same month they register their ABN. Lenders treat new ABNs carefully, but experience counts. Things that help:

• your trade qualification and licence;
• years working in the trade, even as an employee;
• a subcontract or regular work lined up;
• a clean credit history;
• a deposit or trade-in;
• owning property, even with a home loan.

Our new ABN and start-up page has more detail.

FBT and the work ute

If your business is a company and you or your employees take the ute home, FBT can come up. The ATO says limited private use of a ute, van or other eligible vehicle may be exempt — typically travel between home and work and minor, infrequent private trips. Regular weekend use is different. Sole traders don’t pay FBT on their own use; they just claim the business share of costs.

Keeping cash for the job

Vehicle finance keeps cash in the business for materials, wages and the gap between finishing a job and getting paid. Some tradies use a modest balloon to keep repayments lower while the business grows, and plan to trade in before it falls due. Others prefer no balloon so the ute is theirs outright at the end. Neither is wrong; it depends on your plans.

When the business grows

A second ute for an apprentice, a van for a new service line, a tipper when the ute and trailer can’t keep up — growth often means more vehicles. Aligning finance terms helps when you get to three or four. See fleet finance and, if you’re moving into bigger building work, construction vehicle finance.

Illustrative example: an electrician’s van upgrade

Illustrative only. An electrician with an ABN for five years is running out of space in an ageing small van. She finds a medium van at a dealer with shelving included on the invoice. Using a chattel mortgage with a modest balloon, she keeps repayments manageable, claims the GST credit on her next BAS, and trades in the old van as a deposit. The new van is on the road the following week.

Tradie vehicle checklist before you sign

• Is the vehicle’s payload and towing rating enough for your heaviest regular load?
• Is the fit-out on the same invoice, or approved by the lender?
• Have you checked whether the model sits inside or outside the car limit?
• Do you know the on-road costs, including stamp duty?
• Have you planned what happens at the end of the term?

Working out what you can comfortably repay

Look at your quietest month in the last year, not your best. Subtract materials, wages, insurance, BAS and super obligations, and your living costs. What’s left is the realistic ceiling for vehicle repayments. Lenders do a version of this too — being realistic up front saves time and avoids an over-stretched business.

Downtime is the hidden cost

When your ute or van is in the workshop, you’re either losing jobs or paying for a hire vehicle. Factor reliability into your choice, keep up servicing, and know who you’ll call if the vehicle is off the road for a week.

Ready to upgrade your work vehicle?

Tell us about the vehicle and your trade — it takes about 60 seconds. You can also try the business vehicle finance planner first.

There’s no credit check when you first enquire. We don’t fling your details at a heap of lenders; one specialist handles them and calls you, usually to talk through the vehicle, the fit-out and how long you’ve been on the tools. Accurate answers let us line up the right lender first time. Get started.