Written and reviewed by the Finance Director at Tradie Finance
A truck is often the single biggest tool in a tradie’s kit — and for owner-operators, it’s the asset that earns the income. Whether you’re upgrading to a tipper, buying your first prime mover, or adding a flatbed to the fleet, paying cash isn’t always practical. That’s where truck finance comes in. This guide walks through how to finance a truck the right way: the finance types available, what lenders look for, and the steps to get approved.
Most truck finance in Australia is structured as business or commercial finance, because the truck is used to produce income. That generally means a more straightforward process than a consumer car loan — but it also means lenders want to see that your business stacks up.
How do I finance a truck? The short version
At a high level, financing a truck means a lender pays for the vehicle and you repay the amount over an agreed term, usually with the truck itself acting as security. You choose a finance product, the lender assesses your business and the asset, and once approved, you take delivery and start making repayments. The detail is in choosing the right product and structure for your situation.
Truck finance types available
There’s no one-size-fits-all product. The main options Australian tradies use are:
Chattel mortgage
A chattel mortgage is the most popular choice for businesses buying a truck. You own the truck from day one, the lender holds a mortgage over it as security, and there can be useful tax and GST outcomes when the truck is used for business. Because it’s such a common pick, we’ve built a dedicated resource — read our full chattel mortgage guide for the detail on how it works.
Finance lease
With a finance lease, the lender owns the truck and leases it to you for an agreed term. You make regular lease payments and typically have options at the end of the term, such as paying a residual to take ownership. This can suit businesses that want predictable payments and prefer not to hold the asset on their books in the same way.
Hire purchase / rent-to-own
Under a hire purchase (sometimes described as rent-to-own), you hire the truck and pay it off over the term, taking ownership once the final payment and any residual are made. It’s less common than it once was but still offered in some scenarios.
Low-doc options
If you’re newer to business or don’t have a full set of financials ready, low-doc truck finance may be an option. These are designed for borrowers who can’t easily supply two years of tax returns and BAS, often relying on alternative evidence of income. Terms and criteria differ from full-doc lending, so it’s worth a conversation about what fits.
What do I need to finance a truck?
This is the question most tradies ask first. Lenders generally look at a mix of the following:
- ABN and GST registration — an active ABN is usually expected for commercial truck finance, and many lenders like to see GST registration too.
- Time trading — how long you’ve been operating. Longer trading history with full financials opens up more options, while newer businesses may lean toward low-doc.
- Deposit — some products can be arranged with little or no deposit, while others ask for a contribution. A deposit can strengthen an application and reduce the amount financed.
- The asset itself — the make, model, age and condition of the truck matter, because it’s the security. Older trucks can still be financed, but very old assets may attract shorter terms or different conditions.
- Credit history — your track record of meeting repayments.
- Serviceability — evidence the business can comfortably afford the repayments.
So if you’re wondering what do I need to finance a truck, the short answer is: proof of who you are, proof your business is real and trading, and an asset the lender is comfortable lending against.
Can I finance a truck with a new ABN?
Yes, it’s often possible. Can I finance a truck with a new ABN is one of the most common questions we hear from owner-operators going out on their own. A brand-new ABN doesn’t automatically rule you out — lenders may consider your industry experience, the size of your deposit, the asset, and low-doc pathways. The trade-off can be that newer ABNs face tighter criteria or are asked for a larger contribution. It’s very much case by case.
New vs used truck finance
The used vs new truck finance decision comes down to budget, the work you do and how long you plan to keep the truck.
- New trucks generally come with warranty, the latest safety and emissions tech, and often longer available finance terms because the asset holds value longer.
- Used trucks cost less up front, which can mean smaller repayments and a lower amount financed. The catch is that as a truck ages, lenders may shorten the term or apply different conditions, because the asset depreciates and the resale market narrows.
Both new and used trucks are routinely financed in Australia. The right answer is the one that keeps your cash flow healthy and the truck earning more than it costs.
A quick illustrative example
Consider a hypothetical owner-operator — let’s call him Sam — setting up a small earthmoving business. Sam finds a five-year-old used tipper truck and arranges a chattel mortgage over a five-year term. He puts in a modest deposit and structures the loan with a balloon payment at the end to keep his monthly repayments lower while work ramps up. Because the truck is used 100% for business, Sam plans the GST and tax treatment with his accountant. This example is illustrative only — every business and every truck is different.
Balloon payments explained
A balloon payment (sometimes called a residual) is a lump sum left owing at the end of the loan term. Choosing a balloon lowers your regular repayments because you’re not paying the full amount off over the term — but you’ll need to pay out, refinance or trade in the truck to cover that balloon when it falls due. It’s a cash-flow tool, not free money, so it pays to plan for it.
How long can you finance a truck for?
How long can you finance a truck for depends on the lender, the product and — importantly — the age of the truck. Terms commonly range from around two years up to about seven years. Newer trucks tend to qualify for the longer end of that range, while older used trucks may be capped at shorter terms because lenders consider the asset’s remaining life and resale value.
Tax treatment at a high level
One reason commercial truck finance is popular is the potential tax treatment. Depending on the product and how the truck is used in your business, there can be deductions available — for example, interest, depreciation, or GST claimed through your BAS with a chattel mortgage. The exact outcome depends on your circumstances and the finance structure, so this is general information only. Always confirm the specifics with your accountant or registered tax agent.
How to apply for truck finance: the steps
Here’s how to apply for truck finance without the headache:
- Work out your budget and the truck. Know roughly what you want to spend and the type of truck the job needs.
- Get your paperwork together. ABN details, identification, and — for full-doc — financials, tax returns and BAS. Going low-doc? Ask what alternative evidence is accepted.
- Choose a finance structure. Decide on the product, term, deposit and whether a balloon suits your cash flow.
- Submit your application. A broker can compare options across lenders so you’re not stuck with a single product.
- Assessment and approval. The lender reviews your business and the asset. Approval is always subject to lending criteria.
- Settlement and delivery. Once finance is settled, you take the keys and repayments begin.
Ready to get moving? Start with our main truck finance page to see how we can help structure the right deal for your business.
Frequently Asked Questions
How much deposit do I need to finance a truck?
It varies. Some truck finance can be arranged with little or no deposit, while other situations call for a contribution. A deposit isn’t always required, but it can strengthen your application and reduce the amount financed. Newer businesses or older assets may attract higher deposit expectations. Speak to a broker about what suits your circumstances.
Can I finance a truck with a new ABN?
Often, yes. A new ABN doesn’t automatically disqualify you. Lenders may consider your industry experience, deposit, the asset and low-doc options. The trade-off can be tighter criteria or a larger deposit. Every application is assessed individually and is subject to the lender’s lending criteria, so it’s worth discussing your situation directly.
How long can you finance a truck for in Australia?
Truck finance terms commonly run from around two years up to about seven years. The available term depends on the lender, the product and the age of the truck. Newer trucks generally qualify for longer terms, while older used trucks may be capped at shorter terms due to the asset’s remaining value and life.
Is it better to buy a truck new or used on finance?
Neither is automatically better — it depends on your budget and work. New trucks offer warranty, newer technology and often longer finance terms. Used trucks cost less up front, which can mean lower repayments, though lenders may apply shorter terms as the truck ages. Choose whichever keeps your cash flow healthy while earning its keep.
Can I finance a truck with bad credit?
It may still be possible, but it depends on your full circumstances. Some lenders consider applicants with past credit issues, often factoring in the deposit, the asset and your current business position. There’s no guaranteed outcome, and all applications are subject to assessment and lending criteria. A broker can help identify which lenders might suit your situation.
Are truck finance repayments tax deductible?
Potentially, depending on the finance product and how the truck is used for business. With a chattel mortgage, for example, interest and depreciation may be deductible and GST may be claimable through your BAS. Outcomes differ for leases and hire purchase. This is general information only — confirm the specifics with your accountant or registered tax agent.
What’s the difference between a chattel mortgage and a finance lease?
With a chattel mortgage you own the truck from day one and the lender holds security over it. With a finance lease, the lender owns the truck and leases it to you for the term, with end-of-term options. Each has different ownership, tax and balance-sheet implications, so the right choice depends on your business.
Do I need to be registered for GST to finance a truck?
Not always, but many lenders prefer to see GST registration for commercial truck finance, and it can affect the tax and GST outcomes of products like a chattel mortgage. Requirements vary by lender and product. If you’re unsure whether your registration status affects your options, it’s best to ask before applying.
This article is general information only and does not constitute credit or financial advice. It does not take into account your personal objectives, financial situation or needs. Consider whether the information is appropriate for you and seek professional advice before acting. Tradie Finance operates under Australian Credit Licence 506065 (Five Tees Pty Ltd). Lending is subject to approval, lending criteria, terms, conditions and fees.