Car Loans and Asset Finance for Australian Doctors:
The Complete Guide
As an asset finance broker specialising in medical finance I have helped hundreds of doctors navigate their financing options. This guide covers the credit products available and how to choose the right one for you.
When doctors start earning a higher income many default to paying cash for everything – cars, medical equipment, office furniture. While this seems straightforward it often means missing out on better cash flow management and the strategic use of credit facilities.
Why Asset Finance Matters for Medical Professionals
Doctors have distinct advantages when it comes to asset finance:
Stable, verifiable income streams make you attractive to lenders
Professional status often qualifies you for better interest rates
Career progression patterns are well understood by specialist lenders
Lower perceived risk means better loan terms and higher approval rates
The reality?
Whether you’re financing a luxury car or diagnostic equipment for your practice, understanding your credit options is key to making informed decisions.
The Five Asset Finance Options Every Australian Doctor Should Master
1. Novated Lease: Salary-Packaged Vehicle Finance
A novated lease is a three way agreement between you, your employer and a finance company.
How it works:
Finance company owns the vehicle
Your employer makes lease payments from your salary (pre-tax)
You have full use of the vehicle
At lease end: buy it out, upgrade or return it
Key loan features:
Loan terms: 1-5 years
Interest rates: 6.5-8.5%
Running costs: Often packaged into the lease (fuel, insurance, maintenance, registration)
Residual values: Set by ATO guidelines (e.g. 65.63% for 1 year, 56.25% for 2 years)
Balloon payment: Residual amount due at end of term
Best suited for:
Employees of hospitals, practices or your own medical company
Doctors with stable employment arrangements
Those who drive significant kilometres annually
Vehicles valued over $50,000 where packaging benefits are greater
What to consider:
Your employment contract must allow novation
Kilometre restrictions may apply
Exit costs if you change employers
Residual payment planning required 6.5-8.5%
2. Chattel Mortgage: Business Asset Ownership
A chattel mortgage is a secured business loan where you own the asset from day one.
Loan details:
Deposit: 10-20% (0% deposit options available for good borrowers)
Loan term: 1-7 years
Interest rate: 7-11%
Balloon: 0-50% residual
Security: The asset itself secures the loan
Key features:
Immediate asset ownership
No restrictions on use or modifications
Can sell or upgrade anytime (subject to payout)
Fixed or variable rate options
Ideal for:
Medical equipment (ultrasound, X-ray, surgical instruments)
Practice vehicles used for business
Assets you plan to keep long term
Doctors operating through a company or trust
Repayment considerations:
Higher monthly payments than lease options (no operating costs included)
Balloon payments reduce monthly costs but requires planning for end of term
Early repayment options vary by lender—check for break costs
Ready to Begin?
Book a free 30-minute consultation today and let us show you how we make home loans easier, smarter, and tailored to your medical career.
3. Finance Lease: Lower Payments, Deferred Ownership
Under a finance lease the lender owns the asset during the lease term.
How it works:
Lender owns the asset
You have exclusive use of the asset
Purchase option at fair market value at end of lease
Can’t sell the asset during the lease term
Loan features:
Term: 2-7 years
Interest rate: 7-12%
Monthly payments: Lower than chattel mortgage
Residual: Based on estimated fair market value
No deposit options: Available for good borrowers
Pros:
Lower regular payments preserve cash flow
No large upfront capital required
Flexibility at end of lease (buy, upgrade, return)
May include maintenance packages
Suited for:
Expensive equipment you may upgrade regularly (e.g. diagnostic technology)
When preserving working capital is key
Assets with predictable useful lives
Important considerations:
You don’t own the asset until you exercise purchase option
Fair market value buyout can be uncertain
Early termination fees apply
Lender approval required for any asset modifications
4. Operating Lease: Rental-Style Arrangement
An operating lease is like a long-term rental with a purchase option.
Structure details:
Finance company owns and depreciates the asset
Fixed rental payments over the lease term
Purchase option at predetermined residual value
Often includes service and maintenance
Typical terms:
Lease periods: 2-5 years
Payment structure: Fixed monthly rentals
End options: Purchase, upgrade, or return
Inclusions: May bundle maintenance, insurance, and servicing
Best for:
Office technology with short refresh cycles
Medical equipment that becomes outdated fast
When you want predictable, all-inclusive monthly costs
Vehicles where you prefer the hassle-free approach
Consider:
More expensive over the full term
Limited flexibility during lease period
Excess usage or damage charges may apply
Purchase residual is predetermined (can be good or bad)
5. Business Car Loan: Traditional Secured Lending
A standard commercial loan against the vehicle.
Loan details:
Terms: 1-7 years
Interest rates: 8-12% currently
Deposit: 20-30% commonly required (but exceptions exist)
Security: Vehicle and potentially other business assets
Ownership: Immediate, with lender’s interest registered
Features:
Simple, straightforward ownership structure
Fixed or variable interest rate options
Principal and interest or interest-only periods available
No residual values or lease-end complications
When to consider:
You want clear, simple ownership
Asset used primarily for business purposes
You prefer traditional lending structures
You have solid business cash flow to support higher payments
Comparison points:
Higher payments than leases (includes principal repayment)
More flexibility in usage and modifications
Simpler to understand and manage
More documentation required for approval
READY TO BEGIN?
Not sure which service fits your needs?
Access to exclusive LMI waivers and lending policies
Nationwide support and personalised strategy
End-to-end assistance from consultation to settlement
Comparing Finance Options: Understanding Total Cost
When comparing finance products, look beyond the monthly payment. Here's what to consider:
Interest Rate Comparison
Vehicle Finance (as at October 2025):
Novated lease: 6.5-8.5%
Chattel mortgage: 7-11%
Business car loan: 8-12%
Personal car loan: 9-15%
Equipment Finance:
Medical equipment: 7-12%
IT and computer systems: 8-14%
Practice fit-out: 8-13%
Rate factors:
Your credit score and history
Deposit/equity contribution
Asset type, age, and condition
Loan term length
Your profession (doctors typically receive better rates)
Loan amount
Total Cost Calculation
Always calculate:
Total interest paid over the loan term
Balloon/residual payment if applicable
Account fees and charges (application, monthly, exit fees)
Comparison rate (APR including fees)
Break costs if you exit early
Cash Flow Impact
Consider your business cash flow cycle:
Monthly payment amount and timing
Seasonal variations in your practice income
Emergency reserves needed
Opportunity cost of capital tied up in deposits
The Winner?
It depends on your cash flow, tax position, and how long you'll keep the equipment.
Vehicle Finance: The Luxuary Car Dilemma
Many doctors want to maintain a professional image. Here's how to approach luxury vehicle finance:
The $150,000 Vehicle Scenario
Novated Lease Option:
Monthly cost: ~$1,800 (including running costs)
Interest rate: ~7.5%
Included: Fuel, insurance, maintenance, registration
Term: 3-5 years
Residual: Per ATO guidelines
Chattel Mortgage Option:
Deposit: $30,000 (20%)
Monthly payment: ~$1,900
Interest rate: ~8.5%
Excluded: Must pay running costs separately
Term: 5 years
Optional balloon: $30,000-40,000
Business Car Loan:
Deposit: $45,000 (30%)
Monthly payment: ~$1,850
Interest rate: ~9%
Excluded: All running costs separate
Term: 5 years
No balloon option
Which to choose depends on:
Your employment structure (employee vs. business owner)
Cash flow preferences
How you'll use the vehicle
Your accountant's tax advice
Equipment Finance: Getting The Tools You Need
Equipment Categories and Suitable Products
Medical equipment financing requires different considerations:
Diagnostic Equipment ($50,000-$500,000+)
Ultrasound, X-ray, MRI machines
Recommended: Chattel mortgage or finance lease
Terms: 3-5 years
Considerations: Technology lifecycle, upgrade paths
IT and Computer Systems ($20,000-$100,000)
Servers, workstations, practice management software
Recommended: Operating lease or finance lease
Terms: 2-3 years
Considerations: Rapid obsolescence, upgrade provisions
Practice Fit-out ($100,000-$500,000)
Furniture, fixtures, reception areas
Recommended: Chattel mortgage or business loan
Terms: 5-7 years
Considerations: Long useful life, stable value
Surgical Instruments ($30,000-$200,000)
Specialized tools and equipment
Recommended: Finance lease or chattel mortgage
Terms: 3-5 years
Considerations: Evolving techniques, upgrade needs
Have questions about car loans or equipment finance?
The market changes constantly, and every doctor's situation is unique. Consider speaking with specialists who can provide advice tailored to your specific circumstances and career stage.
Deposit Requirements
Typical deposits by asset type:
Vehicles: 10-30% (luxury cars may require more)
Medical equipment: 10-20% (established practices may get 0%)
IT equipment: 20-30% (due to depreciation)
Practice fit-out: 15-25%
Credit-strong applicants (excellent credit score, strong financials, established practice) may access:
100% finance options
Lower interest rates
Better terms and flexibility
The Tax Implications You Need to Know
GST Considerations
If you're GST registered: May be able to claim GST back on business assets
Equipment purchases: Usually qualify for GST credits
Vehicle purchases: Luxury car tax threshold applies ($89,332 in 2025)
Depreciation Rules
Immediate write-off: Up to $20,000 for small business (check current limits)
Diminishing value method: Higher deductions early
Prime cost method: Steady deductions over asset life
FBT (Fringe Benefits Tax)
Novated leases: Employer pays FBT, but it's built into the package
Company cars: FBT applies if used for personal purposes
Equipment: Usually no FBT implications
Common Mistakes Doctors Make with Asset Finance
Mistake 1: Focusing Only on Monthly Payments
The problem: Lowest payment doesn't mean best deal
What to do instead:
Calculate total cost including all fees and interest
Compare total amount paid over the full term
Factor in balloon/residual payments
Consider the comparison rate, not just the advertised rate
Mistake 2: Ignoring Residual Values
The problem: That balloon payment isn't "future you's problem"
What to do instead:
Plan how you'll handle the residual (refinance, pay cash, trade-in)
Consider if the asset will be worth the residual amount
Build balloon payments into your financial planning
Understand impact on total interest paid
Mistake 3: Not Reading Loan Terms
The problem: Hidden conditions can be costly
What to check:
Early exit/termination fees
Kilometre or usage restrictions
Excess wear and tear charges
Modification limitations
Insurance requirements
Maintenance obligations
Mistake 4: Choosing the Wrong Loan Structure
The problem: Finance type doesn't match your situation
Questions to ask:
Do I need to own the asset immediately?
How long will I keep this asset?
What's my cash flow situation?
Am I an employee or business owner?
What does my accountant recommend for tax purposes?
Mistake 5: Not Shopping Around
The problem: Accepting the first offer
Better approach:
Compare at least 3-4 lenders
Use a broker who has access to multiple lenders
Negotiate rates and terms
Leverage your professional status
Time your application strategically (banks have monthly targets)
Choosing The Right Finance Partner
Questions to Ask Any Lender
What's the comparison rate? (True cost including fees)
What are ALL the fees? (Application, monthly, exit, late payment)
Can I make extra repayments? (Flexibility to pay off faster)
What are the early exit costs? (If circumstances change)
What happens at loan end? (For leases and balloon payments)
Are there usage restrictions? (Kilometres, business use percentage)
What's required for approval? (Documentation, guarantees)
How long is the rate lock? (Protection during application)
Red Flags to Avoid
Pressure tactics: "This rate expires today"
Rates too good to be true: Check for hidden fees or conditions
Vague contract terms: Everything should be clear and in writing
No cooling-off period: You should have time to review
Unclear residual values: Know exactly what you'll owe
Excessive penalty fees: Check early exit costs
No Australian Credit License: Verify the broker/lender is licensed
What Good Brokers Provide
Access to 20+ lenders (not just banks)
Rate negotiation on your behalf
Comparison of total costs, not just rates
Understanding of medical professional lending
Assistance with documentation
Ongoing support through loan term
Technology and Equipment: Special Considerations
Medical Technology Lifecycle
Diagnostic equipment: 7-10 years typically
Computer systems: 3-5 years maximum
Software licensing: Often better as operating expenses
Upgrade Strategies
Technology refresh clauses: Built into some leases
Trade-in provisions: Valuable for rapidly evolving equipment
End-of-lease flexibility: Important for future planning
Building Your Asset Finance Strategy by Career Stage
For New Graduates and Registrars
Credit strategy:
Build credit history: Start with smaller, manageable commitments
Maximize cash flow: Consider leases over ownership initially
Avoid over-commitment: Leave capacity for future opportunities
Focus on essentials: Delay luxury purchases until income stabilizes
First vehicle finance:
Consider novated lease if employed by hospital
Opt for moderate loan amounts
Keep terms shorter (3 years) for flexibility
Avoid large balloon payments
For Established Doctors (5-15 years qualified)
Credit strategy:
Leverage your position: Use professional status for better rates
Strategic structuring: Match loan types to asset purposes
Build business credit: Separate personal and practice borrowing
Maintain flexibility: Don't over-leverage
Equipment financing:
Chattel mortgages for major equipment purchases
Consider 100% finance to preserve working capital
Use finance leases for technology with short lifecycles
Negotiate better rates based on credit strength
For Practice Owners and Senior Consultants
Credit strategy:
Optimize structures: Clear separation of personal vs. business assets
Preserve capital: Use financing for opportunities and growth
Plan succession: Consider loan terms in exit planning
Maximize leverage: You're at peak borrowing power
Advanced approaches:
Portfolio financing (multiple assets under one facility)
Line of credit facilities for opportunistic purchases
Refinancing older loans to current lower rates
Strategic use of guarantees and security
Cash Flow Management Through Finance
Matching Loan Terms to Asset Life
Optimal term selection:
Vehicles: 3-5 years (matches practical ownership period)
Medical equipment: 5-7 years (aligns with useful life)
IT equipment: 2-3 years (follows technology replacement cycle)
Practice fit-out: 5-7 years (long-term use patterns)
Why this matters:
Don’t pay off assets after they’re obsolete
Don’t have loans extending beyond asset usefulness
Match payments to income-earning life of asset
Reduce risk of negative equity
Timing Your Applications
Strategic timing:
End of financial year: Lenders more competitive
Mid-month: Better broker/lender availability
Your cash flow peaks: Show stronger serviceability
Before major purchases: Lock in rates before property/practice purchases
Interest Rate Structures
Fixed rates:
Certainty of payments
Protection against rate rises
Usually slightly higher than variable
Best when rates are low or rising
Variable rates:
Lower starting rate
Flexibility (extra repayments, early exit)
Payment uncertainty
Best when rates are stable or falling
Split loans:
Partial fixed, partial variable
Balance between certainty and flexibility
May have higher fees
Good for larger loans
Emerging Considerations in 2026
Electric Vehicles
Finance considerations:
Higher purchase prices ($80,000-$150,000+)
Specific EV loan products available
Lower running costs affect lease comparisons
Battery warranty affects residual values
Charging infrastructure needs (additional costs)
Loan structures:
Novated leases particularly attractive (ask your accountant)
Longer terms may suit higher prices
Consider total cost of ownership, not just purchase price
Sustainable Equipment
Financing trends:
Green loans with preferential rates
Energy-efficient equipment incentives
Refurbished equipment finance options
Responsible disposal programs in leases
Financial benefits:
Potentially lower interest rates
Operating cost savings
Longer useful lives for quality refurbished equipment
Better residual values for sought-after sustainable options
Your Next Steps
Asset finance is a tool for managing your cash flow and acquiring necessary assets efficiently. The right financing strategy depends on your individual circumstances, career stage and financial goals.
Key Principles for Smart Borrowing
Compare total cost, not just interest rates or monthly payments
Match loan terms to asset life to avoid paying for obsolete equipment
Preserve cash flow rather than tying up capital unnecessarily
Read all terms and conditions before signing anything
Work with specialists who understand medical professionals
Plan for the full commitment including balloons and end-of-lease options
Getting the Best Deal
*Your advantages as a doctor: Stable income
Professional status
Lower risk for lenders
Access to medical professional lending
Better negotiating power
Use these to your advantage:
Don’t accept standard rates—negotiate
Mention you’re comparing multiple lenders
Time applications strategically
Use professional broker services
Leverage long-term lender relationships
When to Get Help
Use a broker when:
You’re time poor and need guidance
You want to access multiple lenders
Your situation is complex (multiple entities, structures)
You need help with documentation
You want someone to negotiate on your behalf
Talk to your accountant about:
Tax implications of different finance structures
Best entity structure for purchases
Depreciation and deduction strategies
FBT considerations
GST registration and claims
Have questions about car loans or equipment finance?
The market changes constantly, and every doctor's situation is unique. Consider speaking with specialists who can provide advice tailored to your specific circumstances and career stage.
Important Notes
Credit Only: This information is about credit products and features only. It’s not personal financial advice or tax advice.
Tax and Accounting: All references to tax benefits, deductions, GST, FBT or accounting treatment should be discussed with your qualified accountant or tax advisor. Tax laws are complex and change regularly, and individual circumstances vary greatly.
Seek Advice: Before making any financing decision:
Talk to your accountant about tax implications
Consider your full financial situation
Read all loan documents carefully
Understand your obligations and rights
Get independent financial advice if needed
Products: Interest rates, products and lending criteria change regularly. Information is current as at October 2025. Always confirm current rates and terms with lenders before applying.
No Guarantees: Loan approval is subject to individual circumstances, credit assessment and lender criteria. This information does not guarantee any outcome or approval.