• Printer icon
  • Mail icon
  • Small 'A' icon
  • Large 'A' icon

FAQ: What is the definition of a Chattel Mortgage, and how do they work?

What is the definition of a Chattel Mortgage, and how do they work?

A Chattel Mortgage is a commercial car finance product.

Under a Chattel Mortgage a finance company lends money to the customer to purchase a car or other motor vehicle (the "chattel"), and the customer makes regular repayments.

The customer takes ownership of the vehicle at the time of purchase, but the finance company also takes out a "mortgage" over the vehicle by way of an ASIC-registered Fixed and Floating Charge to provide security for the loan.

Once the term of the loan is completed and any residual (balloon) value is paid, the finance company removes the Charge, giving the customer clear title to the car. Alternatively, the customer can "trade in" the vehicle or re-finance the residual value.

Please note that this information is of a general nature only. You should consult an accountant to obtain information specific to your situation.

Further Reading:

Next Question in Chattel Mortgage FAQs:
What are a Chattel Mortgage's features & benefits?

Back To: Chattel Mortgage FAQs , All FAQs

Get a car finance online quote

Vehicle Quote
CAR INSURANCE QUOTE

Competitively priced, full service car insurance for all makes and models.

Get a quote in less than 60 seconds - Australia's fastest car insurance quote.

GET QUOTE NOW

This page was printed from the stratton website.

Original URL: http://www.strattonfinance.com.au/car-finance/learn/faq/chattel-mortgage/what-is.aspx

stratton offers finance and insurance for cars, properties, equipment and more. Visit us online at http://www.strattonfinance.com.au, or call 1300 STRATTON (1300 787 288).

Simply Smarter Finance
Australian Credit Licence #364340 Copyright © stratton. All Rights Reserved.