The short version
You've had a good year and you want the car. Buying it is the easy part. The bit that trips people up is how you buy it, because that decides how much tax you pay, and what happens to the car if the business ever runs into trouble.
There are three ways business owners usually go about it:
1. Buy it in the company that runs the business. 2. Buy it in a separate trust that just holds the car. 3. Borrow against your home to pay for it.
Hardly anyone leases a car like this. Here's how each one works, and where we come in on the finance.
Why leasing doesn't suit these cars
With a lease, you hand the car back at the end. You never own it. That's fine for a work ute you'll run into the ground. It's not much good for a car you actually want to keep.
One lease can be worth a look: a novated lease on an electric car. It can work if your company pays you a wage and the car is under the luxury car tax threshold. You can keep the car at the end by paying the residual. The government plans to change the rules for EVs over $75,000 from 1 April 2027, but it isn't law yet.
So it really comes down to two questions: who owns it, and how you pay for it.
Way one: buy it in your business
This is the easy option. The car goes in the company that trades, and the business pays for it.
The problem is fringe benefits tax, or FBT. If a company car is also there for your private use, the tax office wants a slice, and the rate is 47%. On a pricey car that hurts, because they work the tax out on the full price, luxury car tax included.
And they do look. The tax office goes through car registration records to spot expensive cars sitting inside businesses, and those owners tend to get a closer look.
You can bring the FBT down with a logbook that proves how much you really use the car for work. But a car you also drive on the weekend was never going to be all work. That private use is what makes buying it in the company an expensive way to go.
There's the finance side too. Put a car into the company on a chattel mortgage and you have to show it's genuinely for business use. A ute or a van is no trouble. A plumber trying to claim a Ferrari as a business vehicle is going to get laughed at by the lenders. The car has to make sense for what the business actually does.
Way two: a trust that holds the car, backed by your business
This is the one we set up most often, and for most people it's the better way.
Instead of the trading company owning the car, you set up a separate trust that does nothing but hold it. Your trading company then backs the loan with a guarantee, so the lender still has the strength of your business behind the deal.
You get two things out of it.
First, your car is out of harm's way. It sits in its own trust, separate from the business. If the company ever gets sued or hits trouble, the car isn't caught up in it.
Second, the FBT problem can go away. FBT only applies when a business gives one of its employees a car to use privately. If the car sits in a separate trust, and you use it as a beneficiary of that trust rather than as an employee, that link isn't there, so there may be no FBT to pay.
Be careful here, though. This only works if the trust is set up properly and the paperwork stacks up. It's not automatic. There was a court case in 2026 where the owner got hit with FBT anyway, because their trust car was really just a perk by another name. So get your accountant to set it up. Do it properly and you're fine. Cut corners and the tax office will treat it as a company car regardless.
The finance is where we come in. We arrange the loan to the trust and back it with the guarantee from your business, so the repayments sit with the company that actually earns the money. The trust owns the car, your business supports the loan, and we make sure the paperwork lines up.
There's a trade-off to weigh up, though. Buy the car in the business on a chattel mortgage and, if you're registered for GST, you can usually claim some of the GST back. Hold it in the trust and generally you can't. Whether that's worth giving up depends on your numbers, so that one's a question for your accountant.
Way three: use the equity in your home
The third way is to borrow against your home. If you've paid a fair chunk off your mortgage, you can pull that equity out for a big deposit, or even buy the car outright.
The upside is the rate. Home loan money is cheaper than car finance, and if you buy outright there's no car loan at all.
Here's the catch, though. Your mortgage runs 25 or 30 years, and a car drops in value fast, around 15 to 20% in the first year alone. Put a $150,000 car on a 30-year home loan and forget about it, and you'll still be paying for it long after the car's gone. So that cheap rate can quietly end up costing you more.
It can still be a good move. Use the equity as a deposit to keep the car loan small, or put it on a separate split you pay off quickly, and it works well. Just don't let it sit on the mortgage for 30 years. The difference is whether you actually pay it down.
The tax limits nobody gets around
However you buy, there are a few hard caps on cars. Good to know before you sign anything:
- There's a limit on how much of the price you can claim. Whatever you pay, you can only depreciate up to $69,674 for 2025–26, or $69,883 for 2026–27. Spend $200,000 and you still only claim up to that cap.
- The GST you can claim back is capped too. On a car over the limit, the most you'll get back is $6,353 for 2026–27. And you get nothing back on the luxury car tax part.
- Then there's the luxury car tax itself: 33% on anything above $91,661 for fuel-efficient cars, or $80,809 for the rest, in 2026–27.
These apply no matter who owns the car. The structure helps with FBT and with keeping the car safe. It won't get you around these caps. Nothing does.
How we help
Your accountant handles the tax and sets up the trust. We handle the money side: getting the car financed into whatever structure they've built, finding a lender that's actually happy to fund a nice car, and setting up the guarantee so the repayments sit with the business that earns.
We've done plenty of these. The ones that go smoothly are the ones where the finance is built around the structure from the start, instead of being tacked on at the end.
Thinking about buying one? Send us the details and we'll map out how to fund it before you commit. It takes under a minute.
A quick note: this is general information, based on how we've financed these cars for business owners. It isn't tax or financial advice, and everyone's situation is different. Sort out the right structure with your accountant first, then talk to a broker about the finance.