Driveaway Finance

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Driveaway finance, also known as instant asset write-off finance, is a type of car loan designed to get businesses on the road quickly. It streamlines the application and approval process, allowing eligible businesses to purchase vehicles and potentially claim immediate tax deductions.

Key Features of Driveaway Finance

  • Speed: The primary advantage is the rapid approval and disbursement of funds. Compared to traditional car loans, driveaway finance aims to minimize paperwork and red tape.
  • Simplified Application: These loans often feature a less stringent application process, focusing on key financial indicators rather than extensive documentation.
  • Potential Tax Benefits: A major draw is the potential to utilize the instant asset write-off scheme (subject to government regulations and eligibility requirements). This allows businesses to deduct the full cost of the vehicle from their taxable income in the year of purchase, up to a certain threshold.
  • Suitable for Business Use: Driveaway finance is typically geared towards businesses needing vehicles for commercial purposes, such as delivery vans, company cars, or equipment transportation.
  • Flexible Repayment Options: Lenders generally offer various repayment structures, including monthly, quarterly, or even balloon payments, to align with the business’s cash flow.

Eligibility Considerations

While driveaway finance offers convenience, eligibility criteria must be met. These often include:

  • Business Structure: The applicant must be a registered business (sole trader, partnership, company, etc.).
  • ABN/ACN: A valid Australian Business Number (ABN) or Australian Company Number (ACN) is usually required.
  • Turnover: Lenders may set a minimum or maximum annual turnover requirement.
  • Creditworthiness: While the application process is streamlined, a good credit history is still important.
  • Vehicle Usage: The vehicle must be used predominantly for business purposes.

Factors to Consider

Before opting for driveaway finance, consider these points:

  • Interest Rates: Compare interest rates from different lenders, as they may be higher than traditional loans due to the accelerated approval process.
  • Fees and Charges: Be aware of any upfront fees, ongoing charges, or early repayment penalties.
  • Loan Terms: Consider the loan term and ensure the repayments are manageable within your business’s budget.
  • Tax Implications: Consult with a tax advisor to understand the specific tax implications of the instant asset write-off scheme and its suitability for your business. Remember that tax laws and eligibility criteria can change.
  • Alternative Financing Options: Explore other financing options, such as chattel mortgages or hire purchase agreements, to determine the most suitable solution for your business’s needs.

In conclusion, driveaway finance can be a valuable tool for businesses needing rapid access to vehicle financing and seeking potential tax advantages. However, careful consideration of the terms, conditions, and eligibility requirements is crucial before making a decision.

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