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Tim D.
Tim D.
Oatley, NSW

Self-employed and about to buy a new car – is it better to get a lease and finance the car or use the redraw on our home loan?

6 years ago


Hi Tim,

Depending on the finance costs of each, might be more advantageous to finance through the business and claim the interest as a deduction. Redraw on the home loan, while potentially still deductible, means that a proportion of the home loan may be deductible.
Often find that the repayments are lower, therefore that is all you pay, and don't pay off the vehicle finance for an extended time, therefore costing more in interest long term.
If you can get a split loan for the car against your home loan and pay it off over five years, this can be a great way to go.
Please speak to both your finance broker and accountant to get the right advice for your circumstances.

Note the $20k write-off has been extended, so if looking at a cheaper second hand car, might be able to claim 100% this year - this might not be that great an option, but again speak to your accountant.

Good luck!


I guess Tim, my answer would be that it depends how much income the vehicle is going to generate.
If you are rewarding yourself with a toy, then put it on the home loan. If it is an income generating asset in the business then get a chattel mortgage/finance lease in the business
Best of luck

Hi Tim,

To re-iterate some of what has been said, speak to your accountant to see what best suits your situation.

If the vehicle is going to be used for predominently business use, then a chattel mortgage may be the option. Also speak to your accountant about claiming back the GST, running costs, depreciation and interest if you choose that option.



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