What is the Instant Asset Write-Off scheme in Australia?

The Instant Asset Write-Off scheme allows eligible Australian businesses to immediately deduct the full cost of eligible depreciating assets, including used equipment, in the year they are first used or installed ready for use. For the 2025-26 financial year, the threshold is $20,000 (ex GST) per asset, as confirmed by the ATO.

What is a Chattel Mortgage for equipment finance?

A Chattel Mortgage is a popular equipment finance option in Australia where the lender provides funds to purchase an asset, and the asset itself is used as security for the loan. The borrower owns the asset from the outset, and repayments are typically fixed over a set term. This structure is often preferred by businesses for GST and tax deduction purposes.

How does asset depreciation affect used equipment finance?

Asset depreciation significantly affects used equipment finance as lenders assess the asset's residual value over the loan term. Higher depreciation on older assets can increase perceived risk, potentially leading to stricter lending criteria or higher interest rates. Lenders want to ensure the asset retains sufficient value to cover the loan in case of default.

Can I get equipment finance for a used vehicle or second-hand machinery in Australia?

Skill level: General guidance
Time: Varies
Trade: Business & Equipment Finance
Updated: 3 November 2026

Can Australian tradies get equipment finance for used vehicles or second-hand machinery?

Many Australian businesses, from sole traders to larger enterprises, often consider purchasing used vehicles or second-hand machinery to manage costs and improve efficiency. The good news is that equipment finance options are generally available for these assets, but there are specific considerations that differ from financing new equipment. Understanding these can help you approach your purchase and finance application with confidence.

What key factors influence equipment finance for used assets in Australia?

Asset Age and Condition: Lenders typically assess the age and condition of used equipment. While there's no strict cut-off, very old or poorly maintained assets might be harder to finance due to perceived higher risk and shorter useful life. Valuation and Depreciation: The market value of used equipment is a key factor. Lenders will want to ensure the asset provides sufficient security for the loan, and they'll consider its depreciation over the loan term. Source of Purchase: Financing can often be arranged whether you're buying from a licensed dealer, an auction, or a private seller. However, the process for verifying the asset and seller might vary. Finance Product Options: Common finance products like Chattel Mortgages, Hire Purchase, and Lease agreements can often be structured for used equipment, each with different tax and accounting implications. Instant Asset Write-Off: For eligible businesses, the ATO's Instant Asset Write-Off scheme (or similar temporary full expensing measures) can apply to qualifying used assets, potentially allowing for an immediate deduction of the asset's cost. Always check current ATO guidelines.

How does a finance specialist assess my eligibility for used equipment finance?
Your Business's Financial Health: A specialist will assess your business's cash flow, profitability, and credit history to determine your borrowing capacity and suitability for different loan products. The Specific Asset Details: They'll look at the make, model, year, hours/kilometres, condition reports, and the proposed purchase price of the used vehicle or machinery to match it with suitable lenders. Lender-Specific Criteria: Different lenders have varying appetites for financing used assets, including age limits, minimum values, and acceptable asset types. A specialist knows which lenders are most likely to approve your specific scenario. Optimal Loan Structure: They'll help you understand the pros and cons of Chattel Mortgages, Hire Purchase, or Lease agreements for your business, considering your tax position and cash flow needs. Documentation Requirements: A specialist will guide you on the necessary paperwork, which might include invoices, proof of ownership, and potentially independent valuations for private sales.

Common Costly Mistakes

Assuming All Lenders Are the Same: Not all lenders finance used equipment, and those that do have different criteria, leading to wasted time and potential credit score impacts from multiple applications. Overlooking Asset Condition: Buying a used asset without a thorough inspection or history check can lead to unexpected repair costs and make finance approval more difficult. Not Understanding Tax Implications: Choosing the wrong finance product for a used asset can mean missing out on potential tax benefits like the Instant Asset Write-Off or incurring unnecessary tax liabilities. Failing to Budget for Associated Costs: Beyond the purchase price, consider stamp duty, insurance, registration, and potential refurbishment costs, which can impact your overall finance needs.

When To Get Professional Help

If you're considering financing a used vehicle or second-hand machinery, especially if the asset is older, from a private seller, or if your business has a unique financial structure, professional advice becomes invaluable. A specialist can navigate the complexities of lender policies and help you structure a deal that aligns with your business goals.

Talk To A Specialist

Navigating the options for financing used equipment can be complex. To understand what's possible for your specific situation and to get matched with a finance specialist who can guide you through the process, consider reaching out today: [/finance/enquire?service=finance]

Frequently Asked Questions

Can I get finance for a used car from a private seller?

Yes, it's often possible to get finance for a used car purchased from a private seller. However, lenders may require additional documentation, such as proof of ownership, a clear title search, and sometimes an independent valuation or inspection of the vehicle, to mitigate risk.

Are interest rates higher for used equipment finance compared to new?

Interest rates for used equipment finance can sometimes be slightly higher than for new equipment. This is because lenders perceive a higher risk due to factors like the asset's age, potential for faster depreciation, and unknown maintenance history. However, competitive rates are still available depending on the asset and your credit profile.

What is the maximum age a used asset can be to qualify for finance?

There isn't a universal maximum age, as it varies significantly between lenders and asset types. Some lenders might finance assets up to 5-7 years old at the end of the loan term, while others might be more flexible for certain heavy machinery with a longer expected lifespan. A finance specialist can advise on specific lender criteria.

Can I include refurbishment costs in my equipment finance for a used asset?

In some cases, it may be possible to include minor refurbishment costs or associated expenses like delivery and installation into your equipment finance package. This depends on the lender's policy and the nature of the costs. It's best to discuss this with your finance specialist upfront.

How does the Instant Asset Write-Off apply to second-hand equipment?

The ATO's Instant Asset Write-Off (or similar temporary full expensing measures) generally applies to eligible second-hand assets purchased and used or installed ready for use by an eligible business. The asset must meet the scheme's criteria, including the cost threshold and the time it was first used or installed. Always consult the current ATO guidelines or a tax professional for the most up-to-date information.

Important — General Information Only

This information is general in nature and for educational purposes only. It does not constitute personal business and equipment finance advice and does not take into account your individual objectives, financial situation, or needs. Before making any financial decisions, you should consider your specific circumstances and seek advice from a licensed or registered professional. Lending is subject to lender criteria and responsible lending obligations. Always refer to authoritative Australian entities like ASIC and the ATO for current regulations and guidelines.

Frequently asked questions

Can I get finance for a used car from a private seller?: Yes, it's often possible to get finance for a used car purchased from a private seller. However, lenders may require additional documentation, such as proof of ownership, a clear title search, and sometimes an independent valuation or inspection of the vehicle, to mitigate risk.
Are interest rates higher for used equipment finance compared to new?: Interest rates for used equipment finance can sometimes be slightly higher than for new equipment. This is because lenders perceive a higher risk due to factors like the asset's age, potential for faster depreciation, and unknown maintenance history. However, competitive rates are still available depending on the asset and your credit profile.
What is the maximum age a used asset can be to qualify for finance?: There isn't a universal maximum age, as it varies significantly between lenders and asset types. Some lenders might finance assets up to 5-7 years old at the end of the loan term, while others might be more flexible for certain heavy machinery with a longer expected lifespan. A finance specialist can advise on specific lender criteria.
Can I include refurbishment costs in my equipment finance for a used asset?: In some cases, it may be possible to include minor refurbishment costs or associated expenses like delivery and installation into your equipment finance package. This depends on the lender's policy and the nature of the costs. It's best to discuss this with your finance specialist upfront.
How does the Instant Asset Write-Off apply to second-hand equipment?: The ATO's Instant Asset Write-Off (or similar temporary full expensing measures) generally applies to eligible second-hand assets purchased and used or installed ready for use by an eligible business. The asset must meet the scheme's criteria, including the cost threshold and the time it was first used or installed. Always consult the current ATO guidelines or a tax professional for the most up-to-date information.
What is the Instant Asset Write-Off scheme in Australia?: The Instant Asset Write-Off scheme allows eligible Australian businesses to immediately deduct the full cost of eligible depreciating assets, including used equipment, in the year they are first used or installed ready for use. For the 2025-26 financial year, the threshold is $20,000 (ex GST) per asset, as confirmed by the ATO.
What is a Chattel Mortgage for equipment finance?: A Chattel Mortgage is a popular equipment finance option in Australia where the lender provides funds to purchase an asset, and the asset itself is used as security for the loan. The borrower owns the asset from the outset, and repayments are typically fixed over a set term. This structure is often preferred by businesses for GST and tax deduction purposes.
How does asset depreciation affect used equipment finance?: Asset depreciation significantly affects used equipment finance as lenders assess the asset's residual value over the loan term. Higher depreciation on older assets can increase perceived risk, potentially leading to stricter lending criteria or higher interest rates. Lenders want to ensure the asset retains sufficient value to cover the loan in case of default.

Written by Capital, the Business & Equipment Finance specialist at QLD.Tools.