Surveying often means remote work — and specialised vehicles to get there.
If the thought of hitching yourself to a car loan feels daunting, you can gain more from specialist loans designed for mobile businesses — chattel mortgages and hire purchases.
Here are some tips to make the most of buying cars as a self-employed surveyor.
Picking your vehicle
What kind of vehicle does your business need? Do you need to go off-road? Do you need something that will store all of your equipment? You also need to think about the future; will you be hiring consultants or juniors that you need to bring along with you? If you’re using the car for business most of the time, are you also using it for personal use? This should be front of mind when you’re putting your shortlist together.
You also need to set a budget for repayments each month — what can you as a self-employed businessperson afford? You can use a car loan calculator to figure out how much a loan will cost each month (approximately) by getting an interest rate, loan term and loan amount. A chattel mortgage, which is usually a loan with a fixed rate and fixed repayments, makes budgeting easier. Furthermore, you could offset some of these costs by taking advantage of tax breaks.
Chattel mortgages give your business tax advantages, as Savvy Managing Director and business loan expert Bill Tsouvalas explains. “A chattel mortgage is a business-orientated loan, and you can claim the GST paid, the interest and depreciation up to the depreciation limit. You can also claim the $30,000 instant asset tax write-off. Financing this way can save you a lot in tax.”
Cash flow neutral
The biggest advantage to chattel mortgages is that it is a cash flow neutral solution. “You, as a business, can finance more than the value of the vehicle. This can be useful for paying off extras such as insurance or additional modifications you might need for your car,” Tsouvalas says. “You won’t have to fuss around with trade-ins or deposits, so you aren’t tying up your operating capital.”
Some lenders may also extend a repayment plan that ties with your cash flow, if your business is seasonal. You can also shorten or extend loan terms from 12 months to 7 years if you so choose. “You can also opt for a balloon payment, which reduces regular repayments but requires a lump sum at the end of the loan to pay it off — your accountant may advise you on which method is best.”
A comprehensive solution
Getting up and running as a surveyor can cost a lot in equipment, software, and vehicles. A chattel mortgage for your vehicle can get you up and running as a business owner without affecting your immediate cash flow.
Remember to consult a financial professional or your accountant before making a major financial business decision.