Can You Get Tax Benefits From Financing a Trailer? 🧾🛻

Financing a trailer for work? You might be able to claim it on your tax — but it depends on how the trailer is used, your business structure, and the type of finance you choose.

Here’s a breakdown of the potential tax benefits available to ABN holders when financing a trailer in Australia.

✅ 1. Instant Asset Write-Off (If Eligible)

The ATO has offered various instant asset write-off programs over recent years, allowing businesses to immediately deduct the full cost of eligible assets — including trailers.

What to know:

  • Applies to business-use trailers (not personal)
  • Eligibility and thresholds can change yearly
  • Only applies to businesses under a certain turnover limit
  • May require the trailer to be used or installed by a certain date

Check with your accountant about whether the instant write-off is currently active and how it applies to trailer finance.

📉 2. Depreciation Deductions

If you finance a trailer and can’t claim the full amount upfront, you may still be able to depreciate the asset over time.

How it works:

  • Claim a portion of the trailer’s cost each financial year
  • Standard depreciation rates apply based on trailer type
  • Applies whether you use full doc or low doc finance

This spreads your tax benefit over multiple years while still reducing your taxable income.

📄 3. Deducting Interest on Trailer Loans

If you take out a chattel mortgage or business loan for your trailer, the interest on repayments is often tax-deductible.

Applies to:

  • Sole traders and companies
  • Loans used for business-only trailers
  • Any documented interest portion of your repayments

Note: The principal (actual loan amount) isn’t deductible — only the interest.

🧾 4. Lease Payments May Be Deductible

If you’re leasing the trailer (instead of financing to own), your monthly lease payments may be fully deductible as a business expense.

This works best for:

  • Operating leases (no ownership)
  • Businesses needing flexible or short-term use
  • Cash-based operators wanting fixed expenses

Again, consult your accountant on how to structure this.

⚠️ Important Tax Conditions

  • The trailer must be used predominantly for business
  • Keep detailed records (invoice, loan agreement, ABN use)
  • Personal-use trailers are not deductible
  • You must apply through a valid business structure (sole trader, company, etc.)

🧠 Why Talk to a Broker & Accountant Together?

  • A broker helps you choose the right finance product
  • An accountant helps you maximise your tax position
  • Together, they help you claim smart and stay compliant

🚀 Get a Tax-Smart Trailer Finance Setup

We’ll connect you with a broker who can structure your trailer loan with tax efficiency in mind — and point you in the right direction for accounting support.

👉 Start My Trailer Finance Application

 

DISCLAIMER

The information provided on this website is general in nature only and has been prepared without considering your financial needs, circumstances and objectives and should NOT be construed as financial, taxation or legal advice. For more information, get in touch with our experienced partner brokers today.

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All Your Questions Answered

What is a car loan and how does it work?

A car loan is a finance product where a lender provides funds for you to purchase a vehicle, which you repay over time with interest.

What’s the difference between secured and unsecured car loans?

Secured loans use the car as collateral, often leading to lower interest rates. Unsecured loans don’t, but usually have higher rates.

What loan terms are available for car finance?

Most car loans offer terms from 3 to 7 years. Find out what term suits you best.

How is interest calculated on a car loan?

Interest is based on the loan amount, term, and rate. Fixed-rate loans have predictable repayments, while variable rates can change.

Can I get a car loan for a private sale?

Yes, many lenders accept private sellers. You’ll need to provide extra documents.

Do government employees get lower interest rates on car loans?

Yes — many lenders offer better rates due to your stable income. Explore finance options for government employees.

Can I apply for a car loan while on probation?

Yes. Many workers are approved during probation.

What credit score do I need as a government employee?

A score of 650+ is ideal, but lower scores may still be considered.

Are corporate professionals eligible for low-rate finance?

Yes, especially if you're full-time with strong income.

Can I get car finance with a novated lease?

Yes, many government departments support novated leasing.

Can I get a car loan with no credit history?

Yes, it's still possible to get a car loan with no credit history.

What if I’ve been declined elsewhere?

A broker can help restructure your application for better results.

How do I check my credit score?

Use Equifax, Experian, or Illion for a free check.

Can I get finance if I have a current personal loan?

Yes, if your income supports both loans. A broker will assess your capacity.

What documents do I need to apply?

Typically: ID, payslips, and bank statements.

Can casual workers get car loans?

Yes, if you’ve worked consistently for 6+ months.

Can I apply if I’m self-employed with an ABN?

Yes. Consider a low-doc loan.

Can Centrelink be used as income?

Yes, when paired with PAYG income.

What’s the minimum income to qualify for car finance?

Most lenders prefer $30,000+ annually, but this varies.

Can I apply on a fixed-term contract?

Yes, especially if it’s government-backed.

Can I finance a used car?

Yes, most lenders allow used cars under 10 years old.

Can I get a loan for an SUV or family car?

Absolutely

Can I finance a caravan or motorbike?

Yes

Can I finance an EV or hybrid car?

Yes. You may even qualify for green car loan discounts.

Can I use my car for both work and personal use?

Yes you can.

What is a balloon payment?

It’s a lump sum due at the end of the loan term.

Can I make extra repayments?

Yes, many lenders allow this without penalty.

Can I pay off the loan early?

Yes — ask if there’s an early payout fee.

Is there a deposit required?

Not always.

What loan terms are available?

1 to 7 years is standard.

How long does approval take?

24–48 hours in most cases

Can I apply online?

Yes — most lenders and brokers accept online applications.

Is a broker better than going direct?

Often, yes. They can compare lenders for you.

Can I get pre-approved?

Yes — and it gives you better negotiating power at the dealership.

What happens after I apply?

Your documents are reviewed, and if approved, the lender issues funds to the seller.

Can I get a loan with a visa?

Yes, in some cases. see finance for visa holders here.

Do I need a driver’s licence to apply?

Yes, but learners may qualify with a co-applicant.

Can I apply with someone else?

Yes, joint applications are allowed.

Can I refinance my current car loan?

Yes — it can lower your repayments or get you a better rate.

Can I trade in my old car as a deposit?

Yes, many lenders accept trade-ins toward the deposit.

Can nurses get car finance?

Yes — see nurse-specific finance tips.

Can teachers apply while on contract?

Yes. Read how to get approved.

Do defence personnel get special car loan rates?

Yes, in some cases. Your job security is a major advantage.

Can FIFO government workers apply?

Yes — consistency in income matters more than job location.

Can I apply if I’m on maternity leave?

Yes, especially if you’re returning to work. Here’s how.

Can I use car finance to buy interstate?

Yes — just make sure the seller provides all required documents.

Can I finance a car from an auction?

Yes, but only through select lenders. Ask your broker first.

Will applying hurt my credit score?

Only if you apply to multiple lenders directly. Brokers help protect your score.

Can I get a car loan if I’ve been bankrupt before?

Yes — see bad credit car loan options.

What if I want to upgrade my car before the loan ends?

You can sell the car, pay off the loan early, or refinance.