Truck Finance Australia: Complete Commercial Truck Loans Guide

By the Loan Phone team Reviewed by Anthony Moncada, M.App.Fin, Cert IV Finance & Mortgage Broking

Quick Answer

Truck finance in Australia allows businesses to acquire commercial trucks and heavy vehicles through chattel mortgages, hire purchase, or lease arrangements. Rates typically range from 7-12% p.a. in 2025 (indicative only) depending on truck age, type, and business profile. Loan amounts from $50,000-$500,000+ cover light trucks to prime movers over 5-7 year terms. Most lenders require minimum 12 months trading history, current ABN/GST registration, and vehicles used primarily for business purposes. Modern comparison platforms can provide efficient assessment, with settlements possible within days for straightforward applications (subject to lender and circumstances). Trucks serve as loan security, often allowing 100% financing.

Rates are indicative examples only. Actual rates depend on individual circumstances and lender assessment.

Types of Trucks Financed

Australian truck finance covers the complete range of commercial heavy vehicles across all transport and logistics operations.

Light Trucks (Under 4.5 Tonnes GVM)

Cab chassis, tray trucks, tipper trucks, refrigerated trucks, and delivery vehicles under 4.5 tonnes suit courier businesses, trades, and light transport operations. These $50,000-$150,000 vehicles typically finance over 5-7 years with rates of 7-10% p.a. for established businesses.

Popular models include Isuzu NLR/NPR, Hino 300 Series, Fuso Canter, and Mitsubishi Fuso Canter. Light trucks serve diverse applications from local deliveries to waste collection, food transport to mobile service operations.

Medium Rigid Trucks (4.5-12 Tonnes)

Single rigid trucks for general freight, removalists, construction, and specialized transport offer payload capacity between light trucks and heavy vehicles. These $100,000-$250,000 vehicles typically finance over 5-7 years with rates of 8-11% p.a.

Common models include Isuzu FRR/FSR, Hino 500 Series, UD Condor, and Fuso Fighter. Medium rigids handle furniture removals, construction materials, refrigerated freight, and specialized applications requiring moderate payload capacity.

Heavy Rigid Trucks (Over 12 Tonnes)

Large rigid trucks including tippers, concrete agitators, waste trucks, and heavy delivery vehicles serve construction, waste management, and heavy transport sectors. These $150,000-$400,000+ vehicles typically finance over 5-7 years depending on application, with rates of 9-12% p.a.

Popular models include Isuzu FVZ/FXZ, Hino 700 Series, UD Quon, Volvo FE/FL, and Mercedes-Benz Atego/Axor. Heavy rigids handle bulk materials, concrete delivery, crane operations, and heavy-duty applications.

Prime Movers and Semi-Trailers

Prime movers (truck heads) paired with semi-trailers handle long-haul transport and logistics operations. Prime movers range $150,000-$300,000+ with trailers adding $50,000-$100,000+. Typically financed over 5-7 years with rates of 8-12% p.a. depending on business strength.

Common prime movers include Kenworth T610/T909, Volvo FH/FM, Scania R/S Series, Western Star 4900/5700, and Mack Anthem/Super-Liner. For detailed semi-trailer information, see our truck and semi-trailer finance guide.

Truck Finance Structures

Australian truck finance offers several structures, each suited to different business needs and circumstances.

Chattel Mortgage

Business purchases the truck using borrowed funds, owning it immediately. The truck serves as security for the loan while the business holds legal ownership throughout the finance term.

How it works: Borrow the purchase amount, own the truck, repay over agreed term (typically 5-7 years). Business may claim depreciation deductions and interest expense deductions subject to individual circumstances.

Best for: Established transport businesses (12+ months trading), operators wanting to maximize tax deductions, GST-registered businesses claiming upfront GST credits, long-term ownership intentions.

Typical features: 100% finance often available, balloon payments optional (20-50% residual), terms 2-7 years, rates 7-12% p.a. (indicative only).

For comprehensive chattel mortgage information, see our chattel mortgage Australia guide.

Finance Lease

Lender purchases the truck and leases it to the business for an agreed term. Business pays regular lease payments and may have purchase option at term end.

How it works: Lender owns truck, business uses it and makes lease payments. At term end, business may purchase truck for residual amount, return it, or upgrade to newer model.

Best for: Fleet operators wanting consistent budgeting, businesses preferring to upgrade trucks every 3-5 years, operators not wanting vehicle disposal management, companies with complex tax structures.

Typical features: Lease payments may be tax-deductible subject to circumstances, terms 2-5 years, residual values 10-40%, upgrade flexibility at term end.

Hire Purchase

Business hires the truck from the lender, making regular payments until final payment when ownership transfers. Unlike chattel mortgage, business doesn’t own truck until fully paid.

How it works: Hire truck from lender, make regular payments including interest and principal, own truck after final payment.

Best for: Transport operators wanting eventual ownership, businesses building business credit history, operators with specific accounting requirements, when chattel mortgage terms aren’t suitable.

Typical features: No GST claim upfront (claimed over term), depreciation typically not available until ownership transfers, terms 2-7 years.

For broader commercial vehicle options, see our commercial vehicle finance guide.

Truck Finance Costs

Interest Rates

Truck finance rates in Australia vary significantly based on multiple factors. Rates are not published publicly and require individual quoting from lenders.

Rate influencing factors:

• Truck type, age, and condition
• Loan amount and term length
• Business trading history and financial strength
• Personal and business credit history
• Deposit amount provided
• Current market conditions

Indicative rate ranges (2025):

For new trucks under 5 years old with established businesses: 7-10% p.a. typically available (subject to assessment). Used trucks 5-10 years old: 10-13% p.a. typically available. Older trucks or higher-risk applications: 12-15%+ p.a. may apply.

Actual rates depend entirely on individual circumstances and lender assessment. Strong trading history, good credit, and larger deposits typically result in more competitive rates.

Fees and Charges

• Application/establishment fees: $300-$1,500 typically charged upfront to process application and establish loan.
• Monthly account fees: $10-$30 per month for loan administration and ongoing management.
• Early termination fees: May apply if paying out loan early, typically calculated as percentage of remaining balance or fixed amount.
• Valuation fees: $200-$500 for used trucks or private purchases requiring independent valuations.
• Documentation fees: $150-$400 for preparing and executing loan documents.

Compare total costs including all fees, not just advertised rates. A 7% rate with high fees may cost more than an 8% rate with minimal fees over the loan term.

Qualification Requirements

Most truck finance lenders require businesses to meet general qualification guidelines, though specific requirements vary by lender and individual circumstances.

Business Requirements

• ABN and GST registration: Current Australian Business Number required. GST registration typically required for amounts above GST threshold, though beneficial for all truck purchases to claim input tax credits.
• Trading history: Most traditional lenders require minimum 12 months trading history with current ABN. Specialist lenders may consider businesses trading 6+ months with strong applications.
• Business structure: Sole traders, partnerships, companies, and trusts all eligible. Structure may affect rates and documentation requirements.
• Business viability: Lenders assess business financial health, revenue patterns, and sustainability. Established transport businesses with proven track records receive most competitive terms.

Financial Requirements

• Creditworthiness: Business and personal credit history assessed. Good credit typically required for best rates. Some credit issues may be acceptable with specialist lenders at higher rates.
• Income verification: Recent business activity statements, tax returns, or bank statements demonstrating business revenue and viability.
• Deposit requirements: Many lenders offer 100% finance for new trucks with established businesses. Used trucks may require 10-30% deposits depending on age and condition.

For self-employed operators and contractors, see our ABN loans guide for detailed qualification information.

New vs Used Truck Finance

New Trucks

• Advantages: Lower interest rates (typically 7-10% p.a. for established businesses), 100% finance often available, full manufacturer warranty coverage, latest safety and efficiency features, predictable maintenance costs, better fuel economy.
• Considerations: Higher purchase prices ($150,000-$400,000+), rapid initial depreciation, higher insurance premiums, higher registration costs in some states.
• Finance availability: Excellent - most lenders prefer new trucks with readily available wholesale pricing and established resale values.

Used Trucks

• Advantages: Lower purchase prices, reduced depreciation rates, proven reliability track record, may better suit cash flow for newer operators, established maintenance history available.
• Considerations: Higher interest rates (9-14% p.a. typically), age restrictions apply (most lenders limit to trucks under 12-15 years at loan end), may require deposits (10-30%), higher maintenance costs, may require independent valuations ($300-$800), limited or no warranty coverage.
• Finance availability: Good for trucks under 10 years with established service history. Older trucks or trucks with high kilometers may require specialist lenders.

Balloon Payments

Balloon (residual) payments defer a lump sum to term end, reducing monthly repayments. Typical balloon amounts range from 20-50% of truck value depending on term length and lender policies.

How they work: Instead of paying full loan amount over term, defer agreed percentage to final payment. This reduces monthly repayments but increases total interest paid.

Advantages: Lower monthly cash flow requirements, frees working capital for business operations, may enable financing trucks that wouldn’t otherwise fit budget.

Considerations: Increases total interest paid over loan term, requires refinancing or lump sum payment at term end, balloon amount must not exceed expected truck value at term end, creates obligation at term end that must be planned for.

Typical balloon percentages:

• 5-year terms: 20-40% balloons common
• 3-year terms: 30-50% balloons possible
• 7-year terms: 10-30% balloons typical

See our equipment finance options guide for comprehensive balloon payment analysis.

Tax Considerations

Truck finance offers several tax benefits for Australian businesses, though all tax matters depend on individual circumstances and business structures.

• Depreciation Deductions: Under chattel mortgage and hire purchase (once ownership transfers), businesses may claim depreciation deductions on truck value. Instant asset write-off schemes may allow immediate deduction up to threshold amounts - check current ATO limits.
• Interest Deductions: Interest paid on truck finance may be tax-deductible as a business expense, subject to the truck being used for business purposes.
• Running Cost Deductions: Fuel, maintenance, insurance, registration, and all business-related truck operating costs typically tax-deductible for business use.
• GST Input Tax Credits: GST-registered businesses can claim input tax credits on truck purchases under chattel mortgage, recovering the 10% GST component upfront. Under hire purchase or lease, GST claimed progressively over term.

Important: Tax benefits depend entirely on your specific business structure, truck use, and circumstances. This information does not constitute tax advice. Always consult qualified tax professionals including your accountant before making financing decisions.

Application Process

1. Truck Selection

Identify your operational requirements and locate suitable trucks through dealers, auctions, or private sales. Consider payload needs, route requirements, and operational patterns when selecting truck specifications.

2. Finance Comparison

Compare multiple lenders or engage specialist transport finance brokers with industry knowledge. Brokers often access rates and products not available directly to businesses, particularly from specialist lenders.

Compare truck finance options now to see personalized rates from 100+ lenders.

3. Application Submission

Submit applications with complete documentation including ABN details, trading history, financial information, and truck details. Transport-specific lenders typically process applications faster than mainstream banks.

4. Credit Assessment

Lenders assess business and personal credit, financial viability, and truck suitability. Initial decisions may be provided within 24-48 hours for straightforward applications. Complex applications or older trucks may require 3-5 business days.

5. Settlement

Dealer purchases typically settle fastest with established processes. Private sales require additional verification of ownership and existing finance clearance. Auction purchases may require pre-approval before bidding.

Specialist Truck Finance Lenders

Transport industry requires specialist lenders who understand:

• Seasonal freight patterns and cash flow variations
• Industry-specific risks and operating margins
• Truck values and resale markets
• Maintenance requirements and operating costs
• Contract structures and revenue stability

Specialist lenders often provide:

• Flexible assessment criteria for owner-operators
• Understanding of start-up transport businesses
• Knowledge of regional transport markets
• Faster approval processes
• Industry-specific loan structures

Frequently Asked Questions

Can I finance trucks bought at auction? Yes, most lenders finance auction purchases though settlement times may be longer due to verification requirements. Auctions typically require quick payment, so arrange pre-approval before bidding. Some lenders have specific auction finance programs with streamlined processes.

What about trucks bought privately? Private sales are financeable but require additional documentation including proof of ownership, existing finance clearance (if applicable), and potentially independent valuations. Settlement takes longer than dealer purchases—typically 5-10 business days.

Can I refinance an existing truck loan? Yes, truck refinancing is common for better rates, accessing equity, or managing balloon payments. Exit fees from existing lenders may apply. See our equipment refinancing guide for details.

Do I need truck industry experience? Lenders prefer applicants with transport industry experience and appropriate licenses. New entrants may need to demonstrate relevant experience, training, or mentorship arrangements. Strong business plans and secured contracts help newer operators.

Can I finance multiple trucks? Yes, established transport businesses can finance entire fleets. Multiple trucks may be structured as individual loans or consolidated facilities. Fleet finance often attracts better rates due to larger loan amounts and established business operations.

What if I have bad credit? Specialist transport lenders may consider applications with credit issues, though expect higher rates (12-15%+ p.a.) and potentially larger deposits (20-30%). Recent defaults or bankruptcies are more problematic than older credit issues. Focus on demonstrating current business viability and repayment capacity.

Speak with Specialists

Need expert guidance on your truck finance application? Email: loans@loanphone.com.au Website: www.loanphone.com.au

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Last updated: 2025-11-24