# Financing your first work van — the honest tradie's guide > Chattel mortgage or hire purchase? Business name or personal? Here's how the finance structure really works for your first work van — in plain English. Source: https://tradiefinance.co.nz/blog/financing-your-first-work-van Published: 2026-04-15T08:00:00.000Z Category: asset-finance Tags: asset-finance, work-vehicle, self-employed, chattel-mortgage Image: https://tradiefinance.co.nz/images/resources/generated/tradie/article/financing-your-first-work-van-primary.jpg Image alt: Work vehicles on a New Zealand build site for Financing your first work van — the honest tradie's guide TL;DR: For most established tradies, a chattel mortgage in the business name beats hire purchase in your personal name on tax, ownership, and resale — but only if your business has clean accounts and 6+ months trading. Otherwise, personal finance is the bridge until you get there. --- 'How do I get a van?' is the question we hear most from tradies going out on their own. It sounds simple. It isn't. The right answer depends on whether you're a sole trader or a limited company, whether you're GST-registered, how long you've been trading, and how you take money out of the business. Get the structure right and you can save thousands in the first year. Get it wrong and you're paying for the van twice. Here's how it actually works. ## First: what kind of vehicle do you actually need? Before you talk to anyone about finance, get honest about the vehicle. This is the bit tradies skip the most. - **What does it carry?** A sparkie's tools fit in a Hiace. A builder's tools and a sheet of ply do not. - **How much will it depreciate?** Some models hold value far better than others, and a well-kept 5-year-old vehicle holds value better than a 2-year-old one bought new at the top of the market. - **Will it be on every job, or weekends only?** Lenders treat a primary work vehicle differently to a second ute. The honest version of 'what should I buy?' almost always sits a notch below 'what would I love to buy?' — and your future self, looking at the loan balance, will thank you for it. ## Two finance structures: which one fits For a tradie buying a work vehicle in NZ, there are really two main paths. We place applications down both every week, so here's the plain-English version of each. ### 1. Chattel mortgage (in the business name) This is what most established tradies use. The business owns the vehicle outright from day one, and the lender registers a [security interest on the PPSR](/glossary/security-interest-ppsr) over it. **What it's good for:** - **GST claim-back at purchase** (if you're registered). You pay GST on the vehicle, then claim it back on your next GST return. That's real cashflow back in your account. (More on the detail of this in [what tradies get wrong about GST and finance](/blog/what-tradies-get-wrong-about-gst-and-finance).) - **Depreciation deduction** against business income on the value of the vehicle. Note: [depreciation](/glossary/depreciation) is a separate tax matter from the loan — your accountant claims it whether you finance the van or pay cash. - **Interest deduction** on the finance against business income. - The asset sits on your business balance sheet — useful when you apply for trade credit or more finance later. **What it needs:** - An established trading entity (limited company or registered sole trader). - Usually 6–12 months of trading, with financials available (in some cases, bank statements are enough). - An income trail that actually matches the work you're winning. ### 2. Hire purchase (personal name) If you're newly self-employed or trading on the side of a PAYE job, [hire purchase](/glossary/hire-purchase) in your personal name is often the path of least resistance. **What it's good for:** - Faster approval — assessed like personal finance against your income. - No business financials required. - A workable option for newer businesses that don't yet have the accounts to qualify for asset finance. **The trade-offs:** - It's less tax-efficient. Finance in your personal name generally can't be claimed against business income the same way, even when the vehicle is used for work. (Business-use apportionment is possible but messier — confirm the detail with your accountant.) - The vehicle doesn't sit on the business balance sheet. If your business has 6+ months of trading, has financials, and is GST-registered, a chattel mortgage is almost always the right answer. If any of those is missing, hire purchase is the bridge until they're not. ## A worked example, because this matters These numbers are illustrative — to show how the structures differ, not an offer. Your actual figures depend on the lender, the vehicle, and your accountant's advice. Say a sparkie buys a $45,000 work van. GST-registered, limited company, 2 years trading. | | Chattel mortgage (business) | Hire purchase (personal) | |---|---|---| | Loan amount | $45,000 incl GST | $45,000 incl GST | | GST claimed back | ~$5,870 on next return | None — not bought as the business | | Depreciation | On the full value, business income | Business-use portion only, with a logbook | | Interest deduction | On the finance, business income | Business-use portion only | | On the balance sheet? | Yes | No | The GST claim-back of roughly $5,870 comes from the 3/23 rule (3/23 of a GST-inclusive price), and it lands back in the business after your next return — genuine cashflow, not a paper saving. Stack the GST and the tax effects together and a well-structured chattel mortgage can be worth several thousand dollars in the first year versus personal-name finance. That's not really a finance decision. It's an accountant decision dressed up as one — so make the call with your accountant before you sign anything. Always confirm the GST treatment, depreciation rate, and any thresholds with your accountant or IRD before you commit — the right structure for you depends on your numbers, not a rule of thumb. ## What lenders actually want to see If you're going for a chattel mortgage in the business name, here's the rough shopping list: - 6+ months of trading (12+ is ideal for newer business owners). - Last full year of financials, or year-to-date management accounts. - 90 days of business bank statements. - GST returns for the last 4 quarters (if registered). - A clear story about what the vehicle is for and how it fits the work you do. If you're going personal-name hire purchase: - 90 days of personal bank statements. - Payslips or schedular-payment summaries. - Your existing finance commitments. - The usual personal credit assessment. Genuine business-purpose finance — a vehicle bought mainly to run your trade — sits largely outside the consumer protections of the CCCFA, which is why a business-purpose declaration is part of the paperwork. Personal-name finance is assessed under the consumer rules. We'll point you to the right path. See [does the CCCFA apply to my business loan?](/blog/does-the-cccfa-apply-to-my-business-loan) ## The thing nobody talks about: resale A work van is a tool. It will be replaced. The question that quietly matters more than the rate is: what's this thing worth in 4 years when you want to upgrade? A few things that pay for themselves many times over: - **Buy something popular.** HiLux, Ranger, Hiace, Transit. They hold value because there's a ready market when you're done. - **Keep the service history.** Good records are the difference between a soft trade-in and a strong one. - **Sign-write smartly.** Magnetic signs or removable vinyl beat paint. You'll thank yourself at resale time. ## The honest order of operations 1. Get clear on the vehicle range. Pick a segment, not a model. 2. Get your accountant on a 15-minute call. The GST and depreciation question matters more than the rate. 3. Get options from a few lenders — but soft enquiries first. Don't let anyone pull your credit until you've decided. 4. Sort your insurance before settlement. The lender won't release funds without it. 5. Settle. Drive. Keep the receipts. A broker pulls steps 3 to 5 together for you. We're a finance broker, not a lender, so we place your application with the lenders most likely to say yes for your structure — and we work backwards from your real numbers to figure out which path fits. If you want a hand mapping that out, [book a call](/book-a-call) or [see how we can help](/help). No pressure, no credit pulled until you're ready — just a straight conversation with someone who does this every day.