Ute Finance - Rates from 6.59%

The ATO treats work utes differently depending on their carrying capacity. This single distinction can save thousands in tax over the life of the loan.

If your ute has a carrying capacity of 1 tonne or more (most 4x4 dual cabs, all single cabs, and all cab chassis models), the ATO classifies it as a vehicle that is not a car. This means:

• No depreciation cap. You depreciate the full purchase price, not the car cost limit of $69,674 (2025-26). On a $75,000 ute, that's $5,326 more in depreciable value.
• No GST credit cap. You claim 1/11th of the full purchase price, not the capped $6,334 that applies to passenger cars. On a $75,000 ute, the GST credit is $6,818 instead of $6,334.
• Logbook method only. You claim actual business-use percentage of all running costs. The cents-per-kilometre method (88 cents/km, capped at 5,000 km) is not available.

If your ute has a carrying capacity under 1 tonne (some 2WD models and lifestyle variants), the ATO treats it as a car, and the car cost limit applies.

Most popular work utes exceed the 1-tonne threshold: the Toyota HiLux 4x4, Ford Ranger, Isuzu D-MAX, Mitsubishi Triton, and Mazda BT-50 all qualify. Check your ute's specifications or GVM (Gross Vehicle Mass) minus kerb weight to confirm.

For detailed tax treatment by method and structure, see our guide to ute tax deductions.

All three structures get you behind the wheel of the same ute. The difference is ownership timing, tax treatment, and what happens at the end of the term.

A chattel mortgage gives you ownership from settlement. The lender registers a mortgage over the ute as security. You claim the full GST credit on your next BAS, depreciate the ute from day one, and deduct interest. This is the most common structure for ABN holders buying a ute they intend to keep.

A hire purchase means you hire the ute and own it after the final payment. You can still depreciate the ute and deduct interest during the term. The practical difference from a chattel mortgage is minimal for most businesses.

A finance lease means you lease the ute for a fixed term. The entire lease payment is tax-deductible as an operating expense. At term end, you can purchase at residual value, return the ute, or refinance. Leases suit businesses that cycle utes every 3 to 4 years.

A novated lease is available for employees who salary-sacrifice a ute through their employer. This is not a business finance product and is not covered on this page.

For a detailed comparison of buy vs lease with worked cost examples, see our guide to ute lease vs buy.

Ute finance rates through our panel start from 6.59%. Utes attract strong lender appetite because they hold resale value well and have an established secondhand market.

Four factors determine your rate:

1. New vs used. New utes from authorised dealers attract the best rates. Used utes under 5 years old are close behind. Older utes (7+ years) attract higher rates because lenders factor in the vehicle's age at term end. Most lenders require the ute to be under 12 to 15 years old at the end of the loan.

2. Dealer vs private sale. Dealer purchases settle faster and attract better pricing. Private sales require independent valuation and may add 0.5-1% to the rate.

3. Your business profile. ABN age (ideally 12+ months), consistent revenue, and clean credit. Newer ABNs (3-12 months) can still access ute finance through specialist lenders at slightly higher rates.

4. Loan-to-value ratio. A deposit of 10-20% can unlock a better rate tier. On a $65,000 ute, a $6,500 deposit might save $1,500+ in total interest over five years.

Here is what a $65,000 ute costs at three different rates over 5 years with no balloon:

• 6.59%: $1,275/month, total interest $11,500
• 8.00%: $1,318/month, total interest $14,080
• 12.00%: $1,446/month, total interest $21,760

The difference between 6.59% and 12% is $10,260 in extra interest. That's why comparing across multiple lenders matters.

Ute finance offers up to four tax benefits. For work utes over 1 tonne carrying capacity, these benefits are uncapped by the car cost limit.

GST credits. Claim 1/11th of the purchase price on your next BAS. On a $65,000 ute, that's $5,909 back within weeks. For utes under 1 tonne carrying capacity, the credit is capped at $6,334 (2025-26 car cost limit). For utes over 1 tonne, no cap applies.

Depreciation. Small businesses with turnover under $10 million can use the instant asset write-off for assets under $20,000 (permanent from 1 July 2026). A ute costing $65,000 goes into the small business depreciation pool at 15% in the first year ($9,136 deduction on the $60,909 cost base) and 30% each year after. At the 25% company tax rate, Year 1 depreciation saves $2,284 in tax.

Interest deductions. Interest on ute finance is fully tax-deductible. On a $65,000 loan at 7% over 5 years, total interest is roughly $12,200. At the 25% tax rate, that saves $3,050 over the term.

Running cost deductions. Fuel, insurance, registration, servicing, and repairs are deductible at your business-use percentage. A logbook showing 80% business use means 80% of all running costs are deductible.

For the full breakdown of what you can claim and common mistakes to avoid, see our guide to ute tax deductions. For how the instant asset write-off applies to vehicles specifically, see our guide to the instant asset write-off for vehicles.

Both new and used utes are financeable through our panel. The choice affects your rate, term options, and total cost.

New utes attract the best finance rates (from 6.59%), the longest available terms (up to 7 years), and the highest balloon payment options (up to 40%). You get full manufacturer warranty, the latest safety features, and the strongest resale value at term end. The downside is the higher purchase price and first-year depreciation hit.

Used utes under 5 years old offer a strong middle ground. Rates are typically 0.5-1% above new-vehicle pricing. You avoid the steepest depreciation (a new ute can lose 20-30% in the first two years) while still accessing competitive finance terms. Most of the manufacturer warranty may still apply.

Used utes 5-10 years old are still financeable but at higher rates (typically 2-4% above new). Maximum terms may be shorter because lenders want the vehicle under 12-15 years old at loan maturity. A 7-year-old ute on a 5-year term (12 years at maturity) is usually fine. A 10-year-old on a 5-year term pushes the boundary.

Used utes over 10 years old have very limited finance options. Some specialist lenders will consider them if the vehicle is in good condition and you have strong credit, but expect rates of 12%+ and shorter maximum terms.

Dealer purchases always settle faster than private sales because lender valuations are automated for dealer stock.

A balloon payment reduces your monthly repayments during the term but leaves a lump sum owing at the end. Utes are well-suited to balloon structures because they retain strong resale value.

On a $65,000 chattel mortgage at 7% over 5 years:

• No balloon: $1,287/month, $0 owing at end
• 20% balloon ($13,000): $1,082/month, $13,000 owing at end
• 30% balloon ($19,500): $979/month, $19,500 owing at end

The 30% balloon saves $308 per month in cash flow. At term end, you can pay the balloon from cash, refinance the remaining amount, trade the ute in (a 5-year-old ute in good condition typically retains $25,000 to $35,000 in resale value), or sell privately and pocket the difference.

Balloon payments make sense when you want lower monthly outgoings to preserve working capital, or when you plan to trade up to a newer ute at term end. They're less suitable if you intend to keep the ute beyond the finance term, as you're effectively deferring cost rather than eliminating it.

The balloon payment doesn't change your depreciation entitlements. You still depreciate the full cost base from day one under a chattel mortgage or hire purchase.

The lease vs buy decision depends on how long you keep utes, your cash flow position, and your tax priorities.

Buy (chattel mortgage or hire purchase) when you plan to keep the ute for its useful life, when you want to build equity in the asset, or when you're GST-registered and want the upfront GST credit. Buying gives you immediate ownership (chattel mortgage) or guaranteed end-of-term ownership (hire purchase), plus depreciation deductions over the ute's effective life.

Lease (finance lease) when you cycle utes every 3 to 4 years, when you want predictable costs with no residual risk, or when you want to keep the ute off your balance sheet. Lease payments are fully tax-deductible as operating expenses, simplifying your tax treatment. At term end, you choose: purchase at residual, return, or refinance.

The fleet leasing industry in Australia is worth $3.6 billion nationally (IBISWorld, 2026). Businesses cycling 3+ vehicles tend toward leasing for operational simplicity. Single-ute businesses almost always benefit from buying.

For a detailed cost comparison with worked examples, see our guide to ute lease vs buy.

Ute finance rates are priced for risk. Here's how to position yourself for the best available rate before applying.

Buy from a dealer. Dealer purchases attract better rates than private sales because lender valuations are automated and the purchase is verified. A formal dealer quote with their ABN speeds up the approval.

Choose a popular model. Lenders offer sharper rates on utes with strong resale demand. The Toyota HiLux, Ford Ranger, Isuzu D-MAX, and Mitsubishi Triton all attract premium pricing because lenders are confident in the residual value.

Clean your bank statements. 3 to 6 months of clean transaction history with no dishonour fees, gambling transactions, or persistent low balances. Consistent monthly deposits signal a well-managed business.

Offer a deposit. Even 10% of the purchase price reduces the loan-to-value ratio and can shift you into a lower rate tier.

Apply through a broker. A single-dealer finance offer gives you one rate from one lender (often tied to the manufacturer's finance arm). Through Emu Money, one application compares your profile against 50+ lenders. The dealer's captive finance is rarely the cheapest option once you compare the full market.