Finance the Ride / Business finance
How GST Affects Car Finance for Businesses in Australia
GST changes the real cost of a business vehicle. How GST credits work on a chattel mortgage versus a lease, the car limit cap, and cash flow timing.
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If your business is registered for GST, the GST on a vehicle can be a significant cash flow item. How you finance the vehicle changes when and how much you can claim back.
Chattel mortgage
- You own the vehicle, and GST is included in the purchase price.
- If registered, you can generally claim the GST credit (business-use portion) in the activity statement for the period you buy it.
- For cars, the credit is capped at one-eleventh of the car limit: $6,353 for 2026–27 ($6,334 for 2025–26).
- Some businesses finance the GST and pay it down when the credit comes back. Ask your broker whether that's available.
Finance lease
- GST is charged on each lease payment, and you claim credits as you go (business-use portion).
- According to the ATO, GST credits on lease payments aren't capped by the car limit.
- There's no large upfront GST outlay, so cash flow is smoother.
Utes, vans and trucks
Vehicles designed to carry one tonne or more, or nine or more passengers, generally aren't "cars" for these purposes, so the car limit cap doesn't apply.
Luxury car tax
Cars above the luxury car tax threshold ($80,567 for most vehicles in 2025–26, higher for fuel-efficient vehicles) attract LCT, which isn't claimable as a GST credit. Check current thresholds before buying.
Not registered for GST?
You can't claim GST credits, but you may still claim interest, depreciation and running costs for business use. See do you need GST registration?
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General information only, based on ATO guidance available in September 2026. This isn't tax advice. Speak to a registered tax agent. Finance the Ride is a referral service and doesn't hold an Australian Credit Licence. Last reviewed September 2026.
About this guide. Written by the Finance the Ride team and last updated . It's general information for Australian borrowers, not financial advice, and doesn't take your circumstances into account. Finance the Ride is a referral service: we don't lend money or hold an Australian Credit Licence. About us