The short version
You've had a good year and you want the car. Buying it is easy. How you buy it is what trips people up, because that decides how much tax you pay and what happens to the car if the business ever runs into trouble.
Business owners usually do it one of three ways:
- Buy it in the company that runs the business.
- Buy it in a separate trust that just holds the car.
- Borrow against your home to pay for it.
Hardly anyone leases a car like this. Below is 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 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 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 trading company and the business pays for it.
The problem is fringe benefits tax (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 the tax is worked out on the full price, luxury car tax included.
And the tax office does look. It goes through car registration records to find expensive cars sitting inside businesses, and those owners tend to get a closer look.
You can bring the FBT down with a logbook that shows 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 expensive.
There's the finance side too. Put a car into the company on a chattel mortgage and you have to show it's really for business use. A ute or a van is no trouble. A plumber trying to call a Ferrari a business vehicle will get laughed at by lenders. The car has to make sense for what the business 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 guarantees the loan, so the lender still has 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.
This only works if the trust is set up properly and the paperwork stacks up. It isn't automatic. In a court case in 2026 the owner got hit with FBT anyway, because their trust car was really just a perk under another name. 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 anyway.
The finance is where we come in. We arrange the loan to the trust and back it with a guarantee from your business, so the repayments sit with the company that earns the money. The trust owns the car, your business supports the loan, and we make sure the paperwork lines up.
There's one trade-off. 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 ask 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 draw on that equity 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.
The catch is time. 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. 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. Just don't leave it sitting on the mortgage for 30 years. What matters is whether you actually pay it down.
The tax limits nobody gets around
However you buy, a few hard caps apply to cars. Know them 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. You get nothing back on the luxury car tax part.
- Then there's 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 keeping the car safe. It won't get you around these caps.
How we help
Your accountant handles the tax and sets up the trust. We handle the money side. We get the car financed into whatever structure they've built, find a lender that's happy to fund a nice car, and set 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, not 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.