Powered by MOMENTUM MEDIA
the adviser logo
Lender

Light commercial vehicle financing up 187%: CBA

by Malavika Santhebennur6 minute read
Light commercial vehicle

CBA figures have revealed a spike in business car financing compared with last year, driven by a 187 per cent rise in light commercial vehicle financing since January 2021.

New asset finance data from the Commonwealth Bank of Australia (CBA) has shown that business car financing has risen by 36 per cent since January 2021, compared with the same period last year.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

The rise has been driven by a 187 per cent spike in light commercial vehicles, an 85 per cent rise in utes and vans, and a 50 per cent increase in heavy trucks, the CBA figures showed.

Meanwhile, asset financing for new motor vehicles, including passenger vehicles and sport utility vehicles (SUV) has risen by 36 per cent over the past year, according to the major bank.

Advertisement
Advertisement

It said that its financing data has echoed recently released VFACTS May 2021 industry trends figures from the Federal Chamber of Automotive Industries, which it said showed that vehicle registrations for business use have increased 24 per cent since January 2021, and 48 per cent from April to May 2021.

Commenting on the business car financing figures, CBA’s executive general manager business lending, Clare Morgan, said the positive trends have pointed to signs of business recovery in the automotive industry despite existing challenges around supply.

“This seems to be especially the case when it comes to business registrations of light commercials, utes and vans,” Ms Morgan said.

“There’s a general expectation that we’ll see an uplift in both financing and registrations of business vehicles as we approach the end of financial year.”

Ms Morgan also said that customers have been utilising the federal government’s instant asset write-off scheme in the past year.

“We expect this demand to continue following the recent budget announcement, and we welcome the extension of the scheme until mid-2023 as a major boost for Australian businesses,” she concluded.

One measure that brokers can highlight to their SME clients is the fact that they can make tax deductions on asset they may wish to purchase.

In the 2021-22 federal budget, the government extended the instant asset write-off scheme (or the temporary full expensing measure) until 30 June 2023 to allow eligible businesses with aggregated annual turnover or total income of less than $5 billion to immediately deduct the full cost of eligible depreciable assets such as vehicles of any value acquired in October 2020 and first used or installed ready for use by 30 June 2023.

The extension of the measure was welcomed by SMEs and brokers alike.

Figures from the Australian Bureau of Statistics (ABS) recently showed that an 11.6 per cent rise in machinery and equipment investment had propelled business investment levels in the March quarter, the strongest rise since December quarter 2009.

Meanwhile, ABS’ insights into Australian business conditions and sentiments for May 2021 revealed that 13 per cent of small businesses, 12 per cent of medium businesses, and 13 per cent of all businesses who had sought additional funding reported that they had not been successful in obtaining the funds.

[Related: Strict policy and turnarounds are top finance barriers, say SMEs]

Light commercial vehicle financing up 187%: CBA
commercial vehicle ta
TheAdviser logo
commercial vehicle ta

Malavika Santhebennur

Malavika Santhebennur

AUTHOR

Malavika Santhebennur is a content specialist at Momentum Media, focusing on mortgages and finance writing.

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

sam jolley elders ta iwsfut

Elders welcomes 1st national growth and asset finance manager

Elders Home and Commercial Finance, the independent broking arm aligned with the real estate network of Elders Ltd,...

READ MORE
rael ross butn ta rerexr

Butn achieves record originations in July

Cash flow financier Butn has released a trading update, revealing that its 2023 financial year commenced with a new...

READ MORE
daniel tuttlebee resimac asset fInance ta l27zun

Resimac takes controlling stake in Sonder

Resimac Asset Finance has expanded its acquisition stake in equipment finance business Sonder Equipment Finance...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more