What is a Chattel Mortgage?
A Chattel Mortgage is a commercial finance loan used by businesses and individuals for the purpose of purchasing a vehicle predominately for business use. Applicants (if not a company) must have an ABN and be registered for GST.
Chattel Mortgage is essentially a mortgage over the vehicle to be financed. i.e. the finance company advances funds to the customer to purchase a vehicle and the customer takes ownership of the vehicle at the time of purchase. The financier takes a mortgage over the vehicle as security for the loan. At the end of the contract period the security interest is removed and the customer retains full title of the car.